Keith has a knack for effective screening of potential tenants. He has given recommendations for reasonably priced contractors when we need them. He is good at keeping our tenant and us calm and working together when issues arise. Thank you Keith!
–Amy & Robert (Property Management Clients)
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Effective Tenant Screening
When engaged in a job role that required repetitive actions, it’s easy to think that some things are obvious, and forget that others have no understanding or bearing, in this case, when it comes to screening tenants. I’ve had clients initially tell me that this is what they are most afraid of. When I ask why… here are a list of reasons given to me:
- Don’t we have to accept anyone who applies, due to non-discrimination laws?
- How do we know if they qualify? What if they can’t pay their rent?
- What if they are partiers? And the neighbors complain and then everyone will be mad at us!
- What if no one applies?
- How does the process work?
Many times people inherit a property, or make their old residence a rental and then fall into property management or become landlords (this is what happened to me). When this is the case, it becomes extra scary for the new landlord. This makes more sense, versus a savvy landlord who already owns or intends to buy a property with renting it out solely in mind. Either way, to a property manager and someone seasoned in rental properties, these are easy questions to address. Hopefully I can take some of the fear out of the process for people reading this.
#1 – You DO NOT have to accept any applicant that applies. However, you CANNOT base your reasoning on any discriminatory factors, such as, race, religious, familial status, sexuality, age, etc. A good property manager follows set practices and procedures that eliminate much of this concern and fear. One practice that is helpful is to have a minimum requirements to rent sheet available to all applicants. This then helps potential applicant figure out whether they meet the criteria or not, and takes it out of the category of subjective choosing.
#2 – All property management should use a filter, as stated above… a systematic approach to qualify an applicant. Primary requirements: Income; credit score; rental history (evictions and what past landlords report). There are other factors I’d be happy to share with you as a client, and which I develop for each client individually based on their preferences and the situation.
But what if they cannot pay rent? The employment/income check gives way to the prospect’s capacity to pay rent, however, without the ability to forecast the future and fully predict human behavior, there is always this risk of not getting rent from tenants. However, the best predictor of the future is past behavior, yet there are still unseen variables and life events that are never foreseen.
#3 – This answer is similar to the last, regarding predicting the future. I like to try to have a conversation with the last landlord or property manager, oppose to just emailing a questionnaire. By taking a relational approach to all of property management (tenants, landlords, vendors, etc.), you can build a bridge with a fellow property manager and, you’d be surprised how much information I can glean from a conversation by just appealing to one’s humanity. Yet, sometimes it’s very difficult to know if a potential tenant like to play music late night, or work odd hours, or rev their motorcycle at midnight. I say this because I had a great tenant once, whose adult son moved back in with him mid-lease. The original, single guy was quiet, helpful, and always paid on time. Once his son moved in, the entire neighborhood was up in arms about the smoking, rude behavior, revving of motorcycles late night, etc. You never know what will transpire. This is the risk an owner/landlord takes when owning income property. This is another reason why many owners opt to have a property manager, even if they live two doors down. Good tenant screening and selection will always make the management aspect easier. If things go sideways, a good property manager can objectively take the next procedural steps, communicating with the owner along the way, a many times sooth a tumultuous situation better than an owner.
#4 – If no one applies, then most of the time (if the property has been marketed correctly) the rent is too high. Most of the time it’s better to ratchet the rent down a little rather than hold out for a unicorn tenant. The loss of the lower rent is usually less than the monthly vacancy expenses. If these does not make sense to you , I can elaborate on this more if you want to message me directly.
#5 – How does the process of finding and renting a property out work? I’m happy to sit down with you or have a conference call to lead you through each step. Feel free to email or text.
Keep your tenants happy!
Keith Klassen, Real Estate Broker – 916.595.7900
Specializing in Residential Sales & Property Management
a Japanese Maple. Others are in love with having a fire pit, or an outdoor eating area. Recently I sold a home where an appraiser called and was curious as to why it sold for $11,000 over asking, relative to other similar homes? I believe it was due to the high-end landscaping, custom lighting, a water feature, perfected irrigation and watering system, etc. This stuff is also very expensive and sometimes costly to maintain, but definitely added value to this homes selling price. What I’m getting at, many times an addition of this or that it’s not a value add to others (or a buyer), but it adds tremendously to your life and perhaps family. And, if done with some forethought, you may be able to accomplish both.
window, which can be costly.
Sacramento Real Estate Reflections 