Finding a well-qualified tenant for your Omaha rental property can be a daunting task, especially because it requires you not only to thoroughly dig into the backgrounds of your applicants, but also to do it while complying with all state and federal fair housing laws.
The goal is to find a tenant who is responsible, reliable, and in possession of a good rental history. To ensure you are placing a tenant who is the best fit for your Omaha rental property, you need a rigorous, fair, and consistent screening process.
You’ll need to collect all the necessary documents and run background checks and pull credit reports. You’ll want to talk to former landlords and make sure that all the information you gather matches the information that the applicant has provided.
Tenant screening can be tricky, and as Omaha property managers, we’ve been doing it for years. We’ve mastered the process of effectively screening tenant applications, and this has led to a low eviction rate and a high tenant retention rate. We’re satisfied that we have a good process in place, and we’re also continually improving upon it.
Here are some tips to screening tenants, and how you’ll know you’ve found the right one.
Establish Qualifying Rental Criteria for Omaha Applicants
Before you begin searching the backgrounds of potential tenants, you want to have your process in place and well-documented. This starts with a legally compliant application.
A comprehensive rental application is essential when it comes to successful tenant screening. By explicitly collecting detailed information about prospective tenants such as past rental history, employment and financial qualifications, you will be well-positioned to make an impartial and objective decision between multiple potential candidates.
The rental application provides the first part of a formal evaluation structure, which helps you to determine whether or not an applicant fits your requirements.
The second part of that structure is your qualifying rental criteria.
Create some rental criteria that reflect what you’re looking for in a tenant. Then, put that rental criterion in writing. Not only do you need it for your own process, you also want to share it with any potential applicants who visit your home and express an interest in applying.
The criteria you’ve created tell everyone what you’re looking for and what will be required in order to be approved for the property. Written rental criteria are your best defense against any claims of discrimination or fair housing violations. It also holds you accountable for the way you screen your applicants.
Criminal Background and Eviction Checks
Conduct a nationwide criminal background check. You’re looking for violent crimes and convicted felonies that may potentially disqualify a tenant from renting your property.
Do a national eviction search as well. Those records don’t always show up on a credit report.
Income Verifications
You are seeking tenants who can afford to pay rent on time every month. That will require looking at income and deciding whether you believe they earn enough to pay what you’re asking.
Omaha property management best practices say that you should look for income that’s at least three times the monthly rent. If there are roommates moving in or two adults who earn incomes, you will combine what’s earned to meet the necessary requirements you set.
You can verify income by asking for proof. Typically, that means collecting pay stubs, tax forms, or bank statements.
Omaha Tenants and Credit Reports
Running a basic credit check is a requirement, but you want to think beyond the credit score. It makes sense to establish a minimum credit score for your qualifying rental criteria, but make sure you’re looking at the entire credit profile.
When you’re evaluating credit, remember that the type of debt an applicant has is often more important than the amount of debt. People have historically fallen behind on student loans and medical debt payments without being financially irresponsible otherwise.
As you evaluate the credit report, look at how financially responsible the applicants are overall. If there are debts owed to former landlords, management companies, or apartment buildings, you’ll want to think twice. Utility bills should not be in collections because it likely means that tenant does not take their housing responsibilities seriously. Multiple credit card balances may seem like bad debt management, but it does not necessarily make your applicant a huge risk.
Evaluate an Applicant’s Rental History
Once you have worked through the data you’ve collected on a tenant’s credit, income, and criminal history, you’ll need to think about their rental history. Talk to current and former landlords.
Your application should request contact information for at least two landlords the tenant has rented from previously. These references can tell you a lot about what it was like to rent to the tenant you’re considering. Send them an email or make a phone call. It won’t take more than a few minutes, and it will give you some very valuable information.
Always make sure you’re actually talking to the landlord or the property owner or the property manager. Sometimes, tenants who have had a bad experience in a property will try to fool you by providing the contact information for a friend or family member. Do some light digging to ensure you’re talking to the right person.
Some of the things you should ask a current or former landlord include:
- Was rent paid on time every month? How quickly was the rent paid in the event that it was late?
- Was there any property damage during the lease term?
- Was proper notice given before they moved?
- Did the tenant have pets?
- Did the tenant receive a full security deposit refund?
- Would you rent to this tenant again?
This is your guide to Tenant Screening 101. It will get you started as you consider who you want to place in your rental property. If you’re still nervous about managing all of this personal and financial information and you’re wondering how you’ll choose a tenant, don’t be afraid to ask for help. Contact us at Kouri Management when you’re looking for Omaha property management. We provide expert leasing, management, and maintenance services in Omaha and Council Bluffs, Iowa.
