Homeownership is on the decline and renting is on the rise in the United States. Current U.S. Census data shows that nearly 35 percent of Americans rent their homes. Savvy real estate investors know that now is the time to get in on the ground floor as more and more Americans choose to rent.
Finding a rental property is easy enough, but finding prospective tenants is another thing. Do you want to know all about the best practices in tenant screening? Read on to learn everything you need to know!
Establish Set Tenant Screening Standards
Long before you accept your first rental application, it's important to set firm tenant screening standards. Think about what you would like in an ideal tenant in terms of the ideal rent-to-income ratio, credit score, and rental history. You can even decide if you want to interview tenants and ask for personal and professional references before approving their application.
Setting these standards and sticking to them is one of the best ways to stay out of hot water when it comes to things like housing discrimination. You'll also want to determine whether you want to allow pets. Take the time to brush up on laws surrounding emotional support animals and service animals.
Know Your Fair Housing Act
Nearly every landlord in the United States is subject to the Fair Housing Act. The Fair Housing Act prohibits discrimination based on defined classes of people in the sale and rental of housing. These classes include:
- Race
- Color
- Religion
- National Origin
- Sex
- Familial Status
- Disability
This means you cannot deny housing to any applicant because of these classes. You can only take adverse action on an application on the basis of things like credit history or income requirements.
Navigating the FHA is thorny at times. For this reason, many landlords refrain from discussing other tenants or mentioning anything related to the protected classes. Staying neutral about existing and desired tenants is truly a best practice.
Hire a Property Management Company
Many landlords, especially those with multiple rental properties, hire property management companies for tenant background checks and screening. Property management companies have staff that are thoroughly trained in federal and local housing laws, helping you avoid any potential legal liability when finding tenants.
Property management companies also have access to the best background screening technology and can help you find the best tenants for the least amount of money. You won't have to second-guess your decisions when you put them in the hands of the pros.
Finding Tenants Doesn't Have to Be Tough!
Investing in rental properties is no small thing. It makes sense that you'd want to find the best prospective tenants to live in and care for your property. If you follow the tips in this article, you'll be well on your way to finding tenants that you love!
Managing rental property can be stressful. Thankfully, PMI Mountain Gateway can help you with everything from tenant screening to collections accounts. Contact us today to learn how we can help you maximize your rental property!
