Just for Property Managers, Uncategorized
(this is one in a series of posts describing best practice property management techniques for minimizing eviction through effective tenant screening)
In the rental and property investment business, property managers and property owners nearly always will have a rental eviction at some point. Of course the best method for keeping them at a minimum is by having an effective tenant screening plan. Tenant screening can be tricky since Fair Housing laws come into play. However, carefully developing a written plan and following it every time without exception will go a long way towards keeping the rotten apples out of your housing and the Fair Housing enforcement people from knocking at your door.
Prior to applying the normal screening criteria applicants need to first pass two brief but important litmus tests.
Litmus Test #1: Income needs to be at least 3 times the monthly rent.
An applicant should have a minimum amount of income to be eligible for consideration. Many companies use a minimum of three times the monthly rent. However, in some cases the risk is acceptable with an additional deposit or with a certain high level of credit score so long as the income is at least two times the monthly rent. If an applicant is on the Section 8 program then income should not be a factor since the government will only require the applicant to personally pay an amount which is a reasonable percentage of their income.
Litmus Test #2: Applicant needs to pass a criminal background check.
It is important to specify and document what constitutes an unacceptable criminal background check. It may simply be that the applicant needs to have no returns to a criminal background check or it could be that only felonies or violent crime disqualifies them. In any case criminal background checks are a critical part of the tenant selection plan.