If you are using print, craigslist or signage to advertise your rental you face the same basic dilemma. How do you make sure the applicant fulfills the income and credit requirements to rent from you?
Many landlords simply arrange to meet the tenant at the tenant’s convenience and only after showing the unit and answering the tenant’s questions do they ask for a credit application. This can be a huge hassle and waste of time if the tenant does not qualify.
The solution is to become effective at pre-qualifying your applicant.
When an applicant contacts you about your rental you should move to pre-qualify them as soon as possible as to save both yourself and the applicant time if they do not meet your minimum requirements. Believe it or not, this isn’t as difficult as it sounds because most applicants understand that you have to ask these questions.
It is important to note that you should have your requirements figured out before you market the unit for rent.
There are a few ways to accomplish this task:
Just let them know up front:
”Before we get to details about the property I need to let you know that we have strict guidelines about the credit and income requirements…do you mind sharing with me your current income ?…”
work it into the conversation:
When the tenant asks how much the rent is per month you answer “the rent is $1000 per month so we are looking for a tenant with solid monthly income to comfortably afford that amount…do you mind sharing with me your current income.
You goal is to quickly get through your list of requirements and either pre-qualify your tenant or disqualify them as quickly as possible. At the minimum this list should include: income, stability of income, availability of funds for move in, credit history, foreclosures, evictions, bankruptcy, criminal history, and pets. This can be accomplished over the phone or as an email response depending on how the applicant originally contacted you. Please make sure that your questions and requirements are not in violation of the fair housing laws.
Take notes of everything the tenant says and save this information.
If the applicant does not meet your minimum requirements remain respectful and offer alternatives if they exist (such as having them secure a cosigner or if they could come up with additional security deposit). Ultimately be honest and tell them if they do not qualify rather than dangling them along by saying you will call them later or that you need to talk it over with your partner when neither is true.
If the applicant meets your minimum requirements then you can proceed to schedule a showing or to have them fill out a formal credit application. Following up on a formal credit application is beyond the scope of this article.
Following this basic concept of pre-qualification will save you time and energy in finding the right tenant for your rental.
Eugene Hacker is a real estate broker for RIVER AND LAKE REAL ESTATE in the Kern River Valley serving the communities of Lake Isabella, Kernville, Alta Sierra, Wofford Heights, Bodfish, Mt Mesa, Weldon, and Onyx. You can view his website at http://riverlakere.com