As a property owner, you want to protect your rental unit. You hope the time, money, and energy you put into the upkeep of the home pays off. You also hope to increase your cash flow, as you work hard to avoid potential costly situations. While there are many ways to maintain the value of your financial investment, one of the most promising methods is by selecting well-qualified tenants to live in your house. At Specialized Property Management Dallas, we provide rental owners with comprehensive Dallas property management services , including a rigorous tenant screening process. Here are a few tips for rental property owners on how to go about selecting excellent tenants.
Choosing the Right Property Location
Location really can mean something when looking at investment rental property. Before buying a certain property consider the location. Is the home near good schools and adequate shopping? Are the surrounding neighborhoods clean and quiet? A safe and attractive location can attract a certain type of rental profile. So the old adage of location, location, location holds true for a better Dallas property management experience.
Have a Thorough Application
When potential tenants apply to live in your rental home, a one page application may not be extensive enough to help you determine if an applicant is qualified. A detailed application will save you money in the long run. How? Careless tenants tend to lead to property damage, legal issues, and even eviction. That means more money out of your pocket in home improvements, legal fees, and maintenance repairs. It also means you will experience longer vacancy periods with no rent income while you work to recover from the damage of previous tenants. As a rental property owner, you should require all tenants above 18 years old to fill out an application.
Comprehensive Tenant Screening
At Specialized Property Management Dallas, we conduct Dallas property management services in a professional and experienced manner. We’ll ask for the following information on a rental application and complete the following checks:
- Verify the tenant income equals at least three times the rent rate. This step greatly reduces the risk of late rent payments. Be firm and clear about the rate of the monthly rent.
- Check credit background, along with past employment and income. Poor credit scores are common, so ask for a written explanation when possible.
- Verify the past two years of rental history. Ask if rent was paid on time and if there was any damage to the apartment. Ask if the tenant tended to be loud in the evening hours and if other tenants had any problems with them. Find out if the residence was well maintained while they were living there. Rental property owners should look for tenants who were clean and left their former housing in great condition.
- Require a criminal background check for all applicants. Property managers in Dallas should beware of those with a history of drugs, theft, terrorism, violent behavior, and any person on a sex offender list.
- Completing a reference check is something we always do in Dallas property management services. Calling former employers and colleagues minimize the risk of selecting non-paying or destructive tenants.
- Have a security deposit. With a security deposit that is substantially more than the monthly rent, a potential tenant will understand that you mean business. Talk with your applicant about your expectations, and what warrants that security deposit not being returned.
- Stay up-to-date on federal and local laws. Make sure to be in compliance with all housing, discrimination, contract and fair credit laws and regulations throughout the screening process. Follow all Fair Housing guidelines, taking care not to discriminate against potential renters based on things like race, gender, familial status, or religion.
Dallas Property Management Services: A Recent Study About Background Checks
A survey was conducted by Liminality, Inc., an independent research firm, on behalf of the Specialized Property Management National office to find out how often DIY landlords conduct background checks. Based on a survey of 150 DIY landlords, it revealed that typically self-managing landlords tend to be more lax with background checks—if they conduct them at all. This increases the chances of criminals—including those who may pose a threat to neighbors—being placed in a rental home.
In fact, 21% of those surveyed said that they “sometimes or never” conduct background checks on a prospective tenant. These DIY landlords also reported these troubling patterns:
- Only 44% check for a previous sex offender
- Only 51% pull a criminal background check
- 23% “sometimes or never” require credit checks
- Only 51% call previous rental references
Those with a criminal background have a higher risk of committing future crimes, which puts neighbors at risk. The Bureau of Justice reported in 2014 that 76.6% of prisoners released in 2005 were arrested again within five years. A criminal background check helps reduce risk for both the landlord and the surrounding neighborhood.
At Specialized Property Management Dallas, extensive background checks are just one part of the comprehensive Dallas property management services that we provide. Click on this link to watch a video on our 7 tips to finding more reliable tenants.
Meet Your Tenants in Person Before Leasing
Always meet potential tenants in person before agreeing to a lease. First impressions can sometimes be your trusted impression when it comes to the character of a person. Personal meetings can help with clear communication and rental expectations on both the tenant’s and management’s side. Having a face to face meeting is important to both the tenant and Dallas property management company. If you can’t meet the interested tenant in person, enlist one of our qualified real estate professionals to meet them and walk them through the property.
Sometimes potentially awful tenants can fool you and come off as responsible and reliable, so it’s in your best interest to learn the warning signs of bad tenants. Below are a few of the tale-tell signs.
- Late to First Appointment – If you schedule a time to meet a prospective tenant to show a property and they show up significantly late (more than 5-10 minutes), you may have problems in the future. Dallas property managers can expect that if a tenant shows up late without good reasons they’ll probably be even more lax on paying their rent.
- Lousy Appearance – This is not referring to how pretty or handsome a person is, as that is discrimination. It is more about how the potential tenant presents themselves to you when first meeting in person. They don’t necessarily have to be dressed as they would for a formal job interview, but if don’t take pride in their appearance or care about making a good first impression on you, then how much pride and care will they take in their rental home?
- Faulty Information – Another red flag to watch out for is an application that contains faulty information. Faulty information consists of information that is either false OR unable to be verified. Sometimes an applicant will accidentally miss something, but when you call him/her about it he/she should be willing to give you the missing information on the spot. If this isn’t the case, beware.
- Inability to Pay Application Fee – As part of our professional Dallas property management services at SPM Dallas, we will charge tenants a small application fee (usually $25-$30) to cover the cost of a background/criminal check. This isn’t anything out of the ordinary, but you will probably run into applicants who ask for a few extra days to get you the money. Consider this a red flag because if they haven’t saved up to pay for this small of a fee, or don’t have the funds for it currently, how are they supposed to pay for rent?
Your Specialized Team Can Help You Find Reliable Tenants
We know that long vacancies can be stressful for even the most patient of property managers in Dallas. Landlords are always eager to fill their rental units, but finding the right tenant can be tricky. A hasty decision can lead to big problems down the road. Rent delays, property damage, legal risks, high turnover, and even eviction risk are all preventable if you choose a reliable tenant in the first place. At Specialized Property Management Dallas, our strict tenant screening methods have been proven to be effective and efficient.
“. . . I am VERY happy with my decision. They went above and beyond to find quality tenants for my property a week before I moved out so I did not lose any money on a vacancy! I love that all of the bills, expenses, income etc. are neatly recorded and available to me through my online portal. The process was much easier than I imagined it would be. . .” – Google Review from Andrea Betts
Put our professional Dallas property management services to work for you today and you’ll save both time and money. Call 214-233-7572 to get started!