The Property Managers Guide to How to Screen Tenants

how to screen tenants

Investment properties turn sour with the wrong tenants. Those who seemed trustworthy and responsible at first could end up doing a 180 after a couple of months.

You need to know how to screen tenants using methods that’ll provide good decision-making information.

It’s your responsibility to vet tenants but what if finding the info is difficult? In this article, we share four helpful tenant screening tips.

Property Management 101: How to Screen Tenants like a Pro

You lose money the longer a property sits on the market. This puts you in a bind because you need someone in, but you don’t want to rush your judgment. A person can seem wonderful, then become a hellion once you give them keys.

Clients come to property managers to avoid the mess of troubling tenants. If you show a consistent record of picking good tenants, you’ll do great in this industry.

Here are a few ways worth applying:

1. Create a Screening “System”

Using a different process when screening each tenant wastes time. Variable screening could omit important info, too. The screening process is repetitive, so creating a “system” streamlines your efforts.

Your process may include:

  • Screening checklist
  • Tenant criteria
  • Background checks
  • Tenant questions
  • Meetups and tours

The systemization of your process creates renter standards. You’ll use this system for each applicant, offering better organization throughout the process.

2. Adhere to the Law

No good will come from rental bias as it could land you in legal troubles. It’s best to approach every application methodically while understanding current rental laws.

  • Learn and respect the Fair Housing Act
  • Know what makes the lease binding
  • Be mindful of your language
  • Document everything

Use standard applications and documentation to avoid legal omissions. This best practice can protect you from discrimination claims.

3. Get What You Need from the Application

You’re looking for a few items:

  • Contacts
  • Financials
  • Lifestyle

The app should include job and landlord references letting you see if they’re quick to bail. Financials often include a credit check or banking balances ensuring renters cover expenses. Plus, pets and job title could reveal a little more about their lifestyle choices.

These items don’t fully define an applicant but will offer decision-making insights. The information can influence your security deposit pricing, too.

4. Get a Credit and Background Check

Order a credit report through one of the main credit agencies. Review the applicant’s credit history and debt.

Red flags could include:

  • Repeat late payments
  • Too many credit inquiries
  • Defaults or bankruptcy

You may use this time to run background checks with Intelius or Instant Checkmate. These reports aren’t cheap but save money forgoing troubling tenants and potential damages.

Look for:

  • Evictions
  • Criminal records
  • Driving records
  • Licenses

Using social media isn’t uncommon in today’s rental environment, either. A glance at social profiles can reveal a person’s lifestyle rather bluntly.

Know Your Boundaries – But Do Your Due Diligence

Renters have legal rights, making screening difficult if you want to know everything. That’s why knowing how to screen tenants is so important. Use what’s available as noted in this guide, staying within reason.

Also, know you’re not right 100% of the time but research is better than blind trust.

Want more? Get in the head of realty agents and learn what they know to become a better property manager. Browse our real estate blog section for tips and tricks.

Looking for a Property Manager? 7 Property Manager Interview Questions

property manager interview questions

Owning and renting out a property is more than a handful. This is especially true when you begin to manage multiple properties. It’s often easier to just give the responsibilities to a property manager and let them handle it.

It’s a great idea, but you’re giving that person a lot of responsibility. You’ll have to interview heavily and make the decision carefully. We’ve compiled a list of property manager interview questions to ask when the interview comes around.

Of course, you’ll need to suit your questions to your own needs, but these ones should serve as a good template for you to start with.

Property Manager Interview Questions

Hopefully, these questions will give you a good place to start. We’re going to cover the essentials, but remember that you should tailor your interview to your needs.

1. “Are You a Licensed Property Manager?”

This is a biggie. Well, it’s important if your state requires landlords to be licensed. If not, though, it is still better to go with those applicants who have the certification.

This simply shows that the person is dedicated to their work and has put an investment into their profession. They’re not just going to show up and have no idea what they’re doing.

2. “Have You Managed Properties Before?”

You’ll want someone that has managed properties similar to your own. For example, you wouldn’t want a motel manager to oversee your multimillion dollar resort. In the same way, someone who hasn’t managed many properties at once might not be able to balance the requirements of managing your property.

3. “How Do You Engage With Tenants?”

This is also an essential aspect of your interview. You don’t want to hire someone who will take the responsibility and use it to take out anger on tenants. This is, unfortunately, a reality in many places.

You want someone who will care about the well-being of your tenants. If they have questions, your property manager should be happy to answer them. You want to hire someone that will make your tenants feel comfortable and reasonable.

4. “What Kind of Fee Structure Are You Used to?”

Landlords are paid in salary, by the hour, or at a percentage of the properties being managed. Make sure to make this clear when you start working with your property manager.

They might be used to a method that is more reasonable than your own, or vice versa. Keep an open mind and see what works.

5. “How is Your Written Communication?”

Much modern communication is done via email and text. Written letters are also used by landlords. Make sure that your property manager knows how to write in the proper tone.

The same message can be written in many different tones, totally changing the way it’s perceived. You tenants will respect your property more if communication is going well.

6. “How Do You Screen Tenants?”

Make sure that applicants understand the state’s laws and regulations regarding background checks and screenings. Try to find someone who has a clean-cut approach to screening tenants.

In other words, everything must go by the books.

7. Do You Like This Person?

This is more of a question for you. You’ll be dealing with this person every day for a number of years. It’s essential that the personal connection is there.

At the very least, ask yourself if this person is someone you’d trust to handle your properties. If not, move on to the next applicant.

Learn More About Property Management

Whether you’re looking to do more research for your property manager interview questions or you’re trying to become a manager yourself, there’s no harm in doing a little research.

If you’re interested in learning more, visit our site to find the information you need.

5 Property Management Responsibilities That Can’t Be Ignored

property management responsibilities

More than a third of U.S. households were renters in 2016. Even up to now, 77 of the 100 biggest cities in the country still see a rise in rents, both in rates and number of tenants.

No wonder then that renters shelled out a whopping $485.6 billion in 2017!

As a property owner, this should be enough to make you want to rent out your property. But what if the property you want to rent is too far from you? Or you have a lot of properties and can’t deal with them all by yourself?

This is where property management responsibilities come into play.

You may have heard of property managers as rent collectors or tenant managers. But their duties go beyond that.

So, before you hire a rental property manager, it’s best you know what these are. We’ve rounded up five of the most important.

1. Setting the Right Rental Rate

Collecting rent, check. Determining the right rental rate – that’s a given.

That’s right. The duties of a property manager extend to setting and adjusting rental rates.

Remember, cities across the nation have a varying cost of living. That includes housing, which includes rental rates.

As such, you can’t charge the average $3,000 they do for a one-bedroom unit in NYC for a similar one in Kansas City. If you do, you’ll scare away most, if not all potential tenants.

That’s why the duties of a property manager include setting the right rental rate. They know the market of your property’s location inside out. They know how much comparable properties nearby cost.

They then use this to come up with an attractive rental price that will still make you profits.

2. Making Appropriate Rental Rate Adjustments

If rent went up in 77 large cities, the opposite happened to seven of the 25 biggest ones. Baltimore, Chicago, and Pittsburgh are to name a few.

Your property needs to stay competitive, so you need to adjust according to these changes. A property manager takes responsibility for this.

Don’t worry though. If rental rates go up, then your manager can also make the appropriate increase to your rental rate.

Always keep in mind that there are laws surrounding these changes. Unless you’re an experienced property manager yourself, you may not know what these are. As such, it’s best you let the pros handle these adjustments.

3. Dealing with Move Outs

Let’s face it. Not all renters stay renters throughout their lifetime. That means your tenant may also move out in the future.

So, who’s responsible for handling such instances? Your property manager.

Your manager will first inspect the unit to make sure no tenant-caused damages exist. He/she will also determine how much of the security deposit to give back the tenant. After the move-out, he/she will clean the unit, have existing damages repaired, and look for a new renter.

4. Maintain Your Property

Maintaining your property is important whether it’s still in the market or already has occupants.

Your manager will either do this on his/her own or hire another professional. Such tasks include pest extermination, trash removal, and checking for plumbing or roof leaks among many others.

5. Have Repairs Done ASAP

All those potential calls at 3 AM from tenants with leaking roofs or plumbing pipes? These will go to your property manager. It’s their responsibility to address property damages and problems, after all.

They can either do the repairs on their own or hire a professional to do it. This is a cinch for the most reliable property managers since they have connections to other service providers. These include plumbers, electricians, as well as HVAC and roof contractors.

Outsource these Property Management Responsibilities to a Pro

Keep in mind that in the U.S., tenancy turnover rate averages at 50%. Although it’s not always due to tenant-landlord disputes, you still want to bring that rate down as much as possible. That’s why you should consider letting an expert carry out all these property management responsibilities.

With a dependable and experienced property manager, you can rest assured your tenants will remain happy. Because they’re happy, they’ll have fewer, even no reason to move out.

Ready to make your property even more attractive to renters? If so, then let us help! Connect with us now and we’ll be more than happy to address your landlord concerns.

How to Estimate Your Rental Property Expenses

rental property expenses

Are you thinking about getting into the rental business? Do you see people you know making money just by renting out a few properties?

Go into property management with the intention of making a profit. It is important to keep your emotions out of the decision-making regarding the purchase of an investment property.

Sometimes it looks like a really easy way to make money. And it can be if it is done right.

If you are considering buying rental properties, the first thing you need to consider is the expenses beyond the mortgage. Let’s take a look at how to estimate your rental property expenses.

How to Estimate Your Rental Property Expenses

Before purchasing any rental property, you have to estimate your expenses. Even if you own several properties, you can’t expect the costs to be the same across the board.

Differing locations incur different costs with regard to taxes, insurance, repair costs, etc., especially when looking at vacation rentals vs. straight year leases.

Expected Expenses Beyond the Mortgage

  • Maintenance Costs
  • Home Owners’ Association Fees
  • Insurance
  • Property Taxes
  • Property Management Fees
  • Other Expenses

Let’s take a look at each one of these.

Maintenance Costs

Maintenance costs include necessary repairs, cleaning, and yard maintenance. Repair costs are difficult to calculate because they are unpredictable.

One month you may have to replace a refrigerator. The next month you may have no repairs.

Your estimated repair budget will be around 1-5% of the property’s value.

Home Owners’ Association Fees

HOA fees will be disclosed in the property listing. What’s important to remember though, is these are likely to increase over time.

You would be wise to look at the pattern and frequency of changes in HOA fees in the past so you can plan for that.

Insurance

Your insurance agent can give you an idea of what the homeowners’ insurance will be on a particular property.

Depending on the location of the property, additional insurance may be necessary. Flood and earthquake coverage are two such examples.

Property Taxes

A property listing will usually include the property taxes that the current homeowner is paying.

That doesn’t always mean that is what you will pay. Check with the county assessor’s office to get the exact amount.

Property Management Fees

Whether you hire a management company or decide to manage it yourself, there are costs associated with managing a rental property.

Typically management companies will charge a percentage of the monthly rent payment and a fee every time they rent each unit.

You can be safe in calculating the annual fees to be 1-2% more than what they take from the monthly rent cost.

Other Expenses

These expenses include garbage, electricity, special assessments (typical with condos or other planned HOA communities), and vacancy.

Quick Calculation of Rental Property Expenses

One general rule rental property owners use is that rental property expenses will be half of what you collect in rent each month. That 50% does NOT include your mortgage payment.

If you want to be successful in investing in rental properties, you need to accurately calculate these expenses. Contact us to help.

Basics of Property Management Law Every Manager Needs to Know

property management law

Being a landlord seems like a pretty straightforward job. While there are a lot of perks to being a property manager, there are some things that you need to know if you don’t want to lose your position.

It’s essential that you understand property management law and all that goes with it. Make legal mistakes and you could be out of a job. We’ve compiled a list of some of the basic things that all property managers need to know about property management law.

Follow the crash course below to get yourself prepared to be a great landlord.

Understanding Property Management Law

Each state has a different set of rules and obligations for property managers to follow. Research your state’s laws before you do anything else.

Find out if you need to have a license. Most states require that property managers have a license. Obtaining a property management license requires that you pass a course and examination.

The course will also involve a background check. States will vary on how they approach different criminal records, but felonies that could reflect a poor future relationship to tenants might disqualify you from passing. Beyond the class, most states require that you continue to take courses as they come up.

This is a measure that ensures your understanding of modern property management laws. Finally, becoming a licensed property manager implies that you owe a duty to your communities and tenants. You are under a sort of oath not to act dishonestly or do anything that will put your tenants at a disadvantage.

Association and Condo Laws

On top of the state laws, your homeowners’ associations and condominiums will have laws of their own. These organizations, should you join them, will require fees and financial statements.

The benefits of the associations typically outweigh the restrictions that they put on property managers.

The Importance of Property Management Law

You may think that the laws around property management aren’t applicable in all cases. Many landlords in college and low-income areas treat their properties like their own domains. While you may not get caught every time, the moral and legal consequences of disregarding the law are significant.

Take eviction notices, for example. Your tenant has not paid in three months and you need them to move out. While it may seem alright to send an eviction notice with an immediate move out time, this might actually put you in legal trouble.

It’s always recommended that you take a look at your state’s laws before making any contact of this kind. Any measure that changes your tenant’s comfortability and expectations about the home should be taken carefully. The laws are in place to keep tenants happy and safe, rights intact, in their own homes.

Want to Learn More?

Are you interested in becoming a property manager? Have questions about property management law? In either case, we’ve got you covered.

If you’re looking to get more information on property management or anything that goes with it, contact us for more information.