When you’re preparing to rent out your Champaign-Urbana investment property, you’re likely thinking about the tenants who will occupy it. You want a tenant who will pay the rent on time every month. You also want someone who respects the lease agreement and meets expectations. Other qualities in a great potential tenant include open communication and a willingness to help you maintain and take care of the home.
To find this tenant, you need a good screening process. Effective tenant screening is fair, rigorous, and compliant with all federal, state, and local fair housing laws. As local property managers, we have some expertise to share on this topic.
Champaign-Urbana Rental Criteria
A solid screening process begins with the application. Have all adults 18 years of age or older who will live in the property fill out an application so you can screen each potential tenant. Before a tenant fills out an application, provide your standard rental criteria so they’ll have a good idea of whether or not they’ll qualify. This will save all parties some time and money. If you require a certain income level, for example, and they don’t meet it, they should know that before taking the time to apply.
Your application should be complete and signed before you begin the screening process. Make sure to include the correct language that allows you to run credit reports, conduct a criminal background check, and talk to former and current landlords.
Checking Credit and Criminal History
Look for potential evictions and felonies. Start with a nationwide eviction check. It’s risky to rent to tenants who have been evicted previously, especially in the last 10 years. Check if they have existing criminal backgrounds as well. Drug-related convictions may also raise a red flag.
Credit checks are useful in knowing how much debt your applicant has and whether they are responsible with housing-related obligations. You might find a low credit score because of a period of unemployment or medical debt. That doesn’t necessarily indicate the applicant will be an unreliable tenant. What’s more important is whether they continued to pay their rent. Look for any outstanding debts owed to former landlords, property managers, or apartment communities.
Verify Income and Employment
Part of your screening process needs to be making sure the potential tenant can pay rent every month. The industry standard is that you look for tenants who earn at least three times the monthly rent. If your property rents for $1,500 per month, you’ll need to see at least $4,500 in monthly income. Ask for verification and documentation. You can talk to employers, collect pay stubs, or look at tax returns and bank statements.
Talk to Former Landlords in Champaign-Urbana
One of the best ways to understand how a tenant has performed in the past is by talking to their previous landlords. Ask how often rent was late and if the tenant received a full security deposit refund. Talk about pets and whether the appropriate amount of time was given before the tenant vacated. You want to know your prospective tenant followed the lease terms and acted responsibly.
Professional property managers are able to access data that’s needed to perform complete and concise tenant screenings. It tends to be more difficult for individual landlords in Champaign-Urbana to access the resources and tools they need. If you’re managing on your own and you’re not sure where to start, contact us at Ramshaw Real Estate.