The Austin rental market is slowly starting to cool, but increased demand doesn't mean landlords should snap up the first tenants they can find for their rental properties. You must still conduct stringent tenant screening to ensure you rent your property to good tenants.
Bad tenants skip rent payments and may damage your property during their stay. Read on to discover the vital steps you must carry out during a tenant background check.
Income Verification
Strong employment growth in Texas makes it easier to find employed tenants with a stable income. That doesn't mean you can relax when verifying applicants' employment and income information.
Landlords should set income criteria on their tenant application forms. A good way to calculate this is by multiplying the rent amount by three to come up with a lower income limit.
You can ask your tenants to provide pay stubs, a letter from their employer, or tax returns as proof of their earnings.
Credit Checks
Regardless of how much they earn, tenants must manage their money responsibly to afford their rent payments. A credit check will determine whether they pay their bills on time.
Credit checks involve consumer reports. As such, all information you glean from these sources must comply with the Fair Credit Reporting Act and meet secure tenant screening criteria.
Most landlords prefer a credit score above 600 when selecting tenants, but you can set a limit that suits you.
Rental History
Most tenants will happily provide references from previous landlords. These property owners can be a good source of information about tenants.
You can ask them whether the applicant paid their rent on time or violated the lease in any other way. If the tenant was evicted for any reason, you can find out more information about this, too.
Tenant evictions are a red flag for landlords, but you should view them in light of the tenant's current circumstances.
Criminal Background Checks
Renting your property to law-abiding citizens is vital to the integrity of your property rental business. Those convicted of violent acts or serious crimes pose a danger to other tenants and place your property at risk.
You must get expert guidance when conducting criminal checks, as each state has different rules when it comes to how these offenses affect tenant screening. In Texas, it's best to carry out these checks as a last resort after everything else, as there are gray areas about rejecting rental applications based on crime.
Alleviate Your Tenant Background Check Worries
Carrying out a tenant background check is vital to ensuring you get good tenants on your property, but this can prove to be a legal minefield without expert guidance. Hiring a professional property manager is the best way to limit your risks when it comes to placing tenants in your rental unit.
Property Management Services of Austin offers a host of property management tools to help streamline your landlord experience. We can assist you with tenant screening tips, legal guidance, and tenant verification services.
Our team is committed to placing our clients first and has a strong background in accounting and taxes to ensure your financial success as a property investor. Sign up for success as a landlord today.
