So you want to rent out your investment property? Don’t tell anyone, or you may be bombarded with bad tenant horror stories. Other property owners will be happy to tell you all about their tenant selection mistakes. Unfortunately, these stories are common because property owners are more worried about avoiding vacancies in the beginning than they are about maintaining the value of their financial investment. Careless property owners can lead to careless tenants who cause property damage, legal issues, and even eviction which results in out of pocket spending on home improvements, legal fees, and maintenance repairs. High tenant turnover also means longer and more frequent vacancy periods with no rent coming in while you clean up the messes from old tenants. Rather than assuming that you’ll be the exception to the rule, it’s best to prepare yourself and learn how to increase your cash flow by making careful tenant selection a priority and enlisting the help of professionals like Specialized Fort Worth property management services.
Finding the Best Qualified Applicant
At Specialized Fort Worth, our proven process for tenant screening ensures well-qualified tenants exclusively occupy your property. We have no qualms about performing thorough checks that analyze credit, background, employment, and rental history of every tenant who is 18 years old or older. Finding reliable tenants can impact the value of your investment, save you money, help you avoid the stress of vacancies, and even renew your faith in the tenant-landlord relationship that carries such a negative stigma. Part of Specialized Fort Worth’s property management services includes helping you prepare a thorough screening application that complies with your local and state laws, helping you find a great tenant while protecting you from making any discriminatory remarks unknowingly. Amazing tenants do exist, but to find the diamonds in the rough, you’ve got to put in the work, or hire Fort Worth property management services to do the work for you. Make sure that your application process follows the checklist below:
- Tenant applicants must be at least 18 years old and if there is more than one adult, each needs to fill out a comprehensive application.
- Be clear about the amount of rent and security deposit due and the due date each month. Tenant’s income must equal at least 3 times the rent rate. This decreases the risk of late rent payments.
- Make sure the security deposit required is significantly more than the monthly rent so potential tenants know that you are serious.
- Check credit, past employment, and income. Ask for a written explanation of poor credit scores.
- Ask about the last 2 years of rental history, if the rent was paid punctually and if damage was caused to the apartment.
- Require a criminal background check. Be on the lookout for those with a history of drugs, theft, violence, or sexual offenders.
- Call references like former employers, previous landlords, and colleagues and ask about the tenants’ behaviors, habits, and ability to pay rent on time.
- Stay current on federal and local laws and be sure to be in compliance with them. Fort Worth property management services can protect you against accidentally discriminating against prospective tenants based on race, color, gender, sex, religion, or service animals.
- Be clear about expectations and your role vs. the tenant’s role. Determine if they will be able to handle any situation with clear communication and a mature attitude.
- Always meet potential renters in person before signing any documents. You can tell a lot from a first impression and much miscommunication can be avoided when speaking face to face.
Choose the Right Property Location
If you want the best tenants, you’ll want to make sure that the property you are investing in is located in a good area. This will attract tenants who are responsible and want to stay for an extended amount of time. Consider the quality of the school district, nearby shopping centers, the cleanliness of surrounding neighborhoods, and the safety of the area as well. Once you have great tenants, it will be easier to practice tenant retention.
The Fair Housing Act
Most non-compliance happens because property owners aren’t aware of all the laws and regulations that exist at the federal, state, and local levels. Violating the Fair Housing Act comes at a cost, whether in the form of hefty fines or losing one’s real estate license in Fort Worth. Property management services can save you hundreds of dollars, if you allow the professionals to be the authorities on what laws are out there and how you can avoid breaking them. Specialized Property Management is required to stay up to date on past, current, and changing Fair Housing laws, protecting you from making mistakes that could result in hefty penalties and fines. Partnering with a professional property management company like Specialized Property Management will give you access to correct legal counsel, providing you with peace of mind knowing that you are always complying with the laws and not discriminating against anyone. As the leader of Texas property management companies, Specialized Property Management keeps you compliant with all federal and local laws and regulations.
The Importance of Background Checks
An independent research firm, Liminality, Inc, conducted a survey recently on behalf of a nationwide property management firm. A survey of 150 rental owners who were self-managing their property revealed that some don’t conduct background checks at all, and those who do are not strict or thorough about it. Implementing Fort Worth property management services will ensure that a thorough background check is performed for each potential tenant. Not performing background checks increases your chances of renting to criminals, posing a threat to neighbors, the value of your investment, and your steady stream of income. The Bureau of Justice reported in 2014 that 76.6% of prisoners released in 2005 were rearrested within five years. In fact, 21% of the property owners surveyed said that they “sometimes or never” conduct background checks on potential tenants. They also reported these frightening statistics:
- Only 44% check for a previous sex offender
- Only 51% perform a criminal background check
- 23% “sometimes or never” require credit checks
- Only 51% call previous rental references
Red Flags to Watch Out For
Fort Worth property management services can guide you on exactly what to look for in a potential tenant-responsible, trustworthy, law-abiding, etc. but being on the lookout for red flags is equally important. Many people can seem great at first, but over time reveal their true character. If you keep your eyes peeled for the following signs, you’ll protect yourself from future headaches and out-of-pocket expenses:
- Late to Meetings – If you set up an appointment with a potential tenant to show them a property and they are more than 5-10 minutes late without a good reason, you may have a problem. If they can’t respect your schedule and be on time, they are likely to be late paying rent as well.
- Disheveled Appearance – We aren’t talking about discrimination based on looks, because that would not be in compliance with the Fair Housing Act. We are talking about taking notice of how someone chooses to present themselves. When they meet you for the first time, they should look at it almost as a job interview because they’re trying to make a good first impression. If they look like they don’t take care of themselves, how can you trust them to take care of your property?
- Wrong Information – If a tenant is being dishonest and reporting untrue information on their application, it’s a clear sign that they can’t be trusted. Faulty information is defined as either false or unable to be verified. It’s normal for some applicants to accidentally miss a section or misunderstand something, but when you call them about it, they should be able to provide that information or correct it right away.
- Inability to Pay – Specialized Fort Worth property management services require a fee before prospective tenants can fill out an application. The fee is usually $25-30 and pays for the background/criminal check. This is normal, but if a tenant can’t pay the amount right away, they probably also don’t have the funds to pay for rent.
Fort Worth Property Management Services
Take advantage of Specialized Fort Worth’s property management services that include inspections, marketing, showing, collecting rent, maintenance, monthly reporting, and possibly most importantly, tenant screening and selection. Our team of professionals will not only find the best tenants for you, they will also interact with them and address any tenant concerns during their stay at your property. Our goal is to reduce your risk while minimizing costs and maximizing cash flow on your rental property. With over 30 years of experience and a 98% customer satisfaction rate, you can be sure that your investment is safe with us. Contact us today to learn more about tenant selection and our property management services.