How to pick a good tenant and verify their application information?
Written by Yan Zhou
Reading time: 2 minutes
As a landlord, we are not necessary looking for the highest rent possible. In fact, paying the rent on time and taking good care of the property are the key items most landlords are looking for nowadays. If you did not select the tenant carefully, you may run into lawsuit and loss of rent income.
There are few best practices I would like to share when I help my landlord client to pick their tenant.
- Tenant job verification – other than asking the applicant to provide you their employment letter and calling their supervisor or HR department to verify, you can also ask the applicant to send you an email from their work email. Also check if their workplace is a real company and they are in actual business instead of just a website and a shared office.
- The income to rent ratio should be higher than 3.5 in my opinion
- Make sure the credit report is not fake or being photoshop – you need to count if the total number of credit lines adds up and the fonts are the same.
- Credit card balance should be within a reasonable level. Normally I look for tenant’s credit utilization rate less than 25% and total credit card balance should be reasonable compared with their family disposable income.
- Interview the tenant in person or on zoom(of course with video on). Of course, you don’t need every applicant. You only need to meet the applicant you think they meet your expectation on paper first.
- When you meet the tenant applicant in person, there are few places you may need to pay attention to: Is he/she arrived on time? what is the cleanliness of the car? Does he/she remove shoes? How does he/she comment on the cleanliness of your property?
- Google the applicant’s name and phone number. Sometimes you will be surprised on what you find. Especially on Facebook, Instagram, and LinkedIn.
- Did the applicant actually see the property or the applicant simply ask a random real estate agent to draft an offer without seeing the property in person?
- Always find out why they are moving out from their current residence.
- Find out if they check out other rental properties in the neighborhood and why they are interested in this neighborhood.
The above are all I can think of right now. if you have any good best practice or tricks, please let me know so I can add it to the list.