While owning an income-generating property can be a profitable venture, it is not without its own set of challenges. If you are a first-time landlord or investor, you may find yourself overwhelmed with the routine management and maintenance issues that must be dealt with on a frequent, and recurring basis.
In hiring a property manager, not only can they deal with these issues, but they can help you find, keep, and screen in good tenants that won’t cause you any trouble. Let’s take a look at how.
An Overview of the Rental Application Process & Its Importance
The rental application process or tenant screening process is a vital tool that property managers use to help minimize vacant periods. If and when a tenant moves out, they can secure new renters quickly and find applicants that are responsible and reliable. This protects your property from tenants that would otherwise cause damage, engage in conflict, or have an erratic payment history.
How Do Property Managers Screen Tenants?
1. Inform the Tenant of the Screening Process
When a potential renter shows interest in a property, the property manager will inform them of the screening process and what it involves. This is as simple as just letting them know what type of information they will need to gather and bring with them to fill out a screening application.
By informing the potential tenant of what is needed, those who know they won’t qualify will walk away before screening.
2. Use an Application to Gather Information
A rental application will then be used to gather pertinent information such as:
- Name, age, and birthdate.
- Phone number, email address, emergency contact(s), and current address.
- Information about the household such as other family members or pets.
- Estimated move-in date.
- Employment information such as: job title, employment duration, monthly gross income, average monthly expenses, and additional sources of revenue.
- Residential history, such as previous landlord contact information, reason for moving, and rental period dates.
- References to vouch for your history and character.
- Written permission for the property manager to run credit and background checks, as well as contact previous landlords and employers.
3. Run a Credit Check
A property manager will then run a credit check to assess the applicants financial situation and history. The credit check will reveal the applicant’s credit score, the amount of debt they have, and if they pay bills on time. It may also reveal if the tenant has ever filed for bankruptcy.
4. Run a Background Check
A background check will be used to see if the applicant has a criminal history. This will reveal criminal records, any previous evictions, or previous legal issues that are on public record.
5. Verify Their Employment, Income, and Provided Information
During this step, a property manager will verify the information provided on the rental application form. This will include verifying the employment, income, and residential history.
6. Complete a Tenant Interview
This is the last step, where either a face-to-face or phone interview will be conducted to clear up or ask further questions as needed.
Once the above steps have been taken, the property manager will respond to the applicants, either letting them know that they’ve been denied and why or letting them know that they’ve been approved and what their next steps are with regard to signing the lease and putting down any fees, such as an application fee or deposit.
How a Property Manager Helps With Finding & Keeping Good Tenants?
Beyond using a strict screening process to eliminate applications from unfit tenants, routing the entire renting process through a property manager attracts tenants who are serious and want a long-term and professional relationship. A reputable property management company will also draw in good tenants and keep them by:
- Giving an initial in-depth showcase of the rental property where tenants can ask questions.
- Talking with the tenant about the terms of the lease and negotiating as needed.
- Responding to and making maintenance repairs in a timely manner.
- Ensuring that tenants have easy access to making payments.
- Work with tenants during emergencies.
- Coordinate certain services as needed for the tenant such as appliance repair.
A property management company provides a certain feeling of safety for tenants as they are dealing with another business for all of their rental needs rather than directly with a person they do not know.
How a Property Manager Can Help You Avoid Bad Tenants?
In using a property manager, their strict screening process will weed out potentially bad tenants from the get-go as references can be tracked, backgrounds checked, and information is verified.
Often, bad tenants will choose owner-managed rentals as individual landlords may have too much on their hands to do a thorough job of vetting an applicant.
In a lot of cases, the very presence of a property management company will prevent bad tenants from applying.