Five questions you must ask before you rent your home
ATLANTA - It’s important to stay consistent and treat all potential renters the same so that you’re not violating any federal or state fair housing laws, but at the very least, you’ll want to make sure you have every tenant submit a rental application and authorize a credit report and criminal background check.
There are 5 questions that you must ask your prospective tenants before you decide to rent to them, and here to explain them is real estate expert John Adams:
Question: What specific questions are we talking about?
Adams: Question one is: Why are you moving?
At first, this may seem like it’s none of your business. But you MUST know the answer.
Listen to the answers, however, as these can surface some scary red flags. You want to watch out for tenants who are moving because of an eviction or a bad relationship with their prior landlord.
Be wary of tenants who complain about their current living situation as bad tenants often bring their problems with them. Instead, you want to look for legitimate reasons like needing a larger place for a family or changing jobs.
Question Two: When do you plan on moving in?
If a tenant says something like “tomorrow” or “next week”, it likely means they aren’t good planners. A responsible tenant starts her search well in advance and plans accordingly. In fact, most landlords require 30-60 days notice from their tenants if they plan on moving out.
You don’t want to be their next landlord who only gets last minute notice and has to scramble to find a new tenant.
A tenant who is looking 90+ days in advance is equally bad, however. It just won’t work out if your property will be available sooner. Don’t waste your time to show your property if you know the timing won’t work.
Question Three: What is your monthly income?
The standard here is to make sure that your tenant has income that is 2 to 3 times the asking rent amount. This is just basic math for you – you’re trying to make sure the tenant can afford the rent for your place. Although any monthly debt payments may affect the affordability as well, you’ll be able to validate this later with a credit report. For now, you can assume they’re telling the truth. You can follow this up by asking them if they’ll have the security deposit and first month’s rent available upon lease signing.
Question Four: Can I ask for references from your former landlords and employer?
With the exception of someone moving straight out of their parent’s house for the first time, if the tenant can’t provide references or makes excuses, you should move on.
Always require references.
Here’s a quick tip: Ask for a former landlord as a reference rather than their current landlord. If the current landlord has issues with the tenant or is going through an eviction, he’ll be thrilled at the opportunity to get this tenant off his hands and say anything to do so.
A former landlord, however, will likely remember a bad tenant and be happy to give you an honest answer. You should ask former landlords simple things like “Did they pay rent on time”, “Did they respect the property and neighbors” and “Why did they move out?”
Question Five: Will you submit a rental application and consent to a credit and background check?
I use MySmartMove.com to check my applicants. I have a link for you at Money99.com.
Disqualify anyone that refuses an application and credit check immediately. If they don’t say YES, it means they have something to hide or they know their credit isn’t good enough. Let them know this is a requirement of all applicants and that you treat all applicants equally. You can’t make exceptions.
Also, tell them it’s NOT YOUR FAULT because you’re just following fair housing laws by holding all applicants to the same set of standards.
You should also consider asking them directly at this point if they’ve had any evictions. If you have to go through an eviction yourself, it’s an unpleasant experience. Their credit report will show whether they have credit issues and whether those were in the past or more recent.
Bonus Question: How many people will be living in the apartment?
More people simply means more wear-and-tear. You’ll either want to adjust the rent, security deposit or restrict the number of people. In fact, in many states the law dictates that a residence cannot have a lease with more than 2 people per bedroom. Now is also a good time to find out if they have any pets that will be living in the apartment. If you have a “no pet” policy, you may mutually disqualify each other and won’t have to do a showing that was never going anywhere anyway.
ALWAYS SAY:
“You’ll need to submit a rental application and authorize a credit and background check. The application fee is $35. I’ll also need references from your prior landlords. You should also know that I will need to verify income and verify whoever is paying or living in the property. EACH ONE OF THEM will also need to be on the application and lease.”
Q: Where can we learn more about this process?
A: Money99.com for a free special report on how to screen rental applicants in Georgia.