Placing tenants is one of your most critical responsibilities when you have a Las Vegas rental property. You want to make sure you’re placing a tenant who is responsible, reliable, and likely to pay rent and maintain your property. Tenants who haven’t been screened properly can be risky. They may pay rent late or not at all. They may damage your home or break your lease.
Put together a tenant screening process that allows you to get a good understanding of who you’re welcoming into your investment home. Here are some of our best practices when we’re screening residents for our owners and investors.
Set Qualifying Rental Criteria
Before you can begin screening tenants, you have to know what kind of standards you’re going to hold them to. Put together a document that outlines your standard criteria. This will let tenants know how they’ll be measured and evaluated when they apply for your property. It will save you time and it will save them money because by reviewing your criteria, they’ll know right away whether they have a good chance of being approved. If their credit is too low or their income isn’t high enough, they will likely decide not to apply.
Having a written set of standard criteria is also important for fair housing. You must demonstrate that you treat every applicant fairly and consistently. Your standard qualifying criteria will reflect that.
Collect Completed and Signed Applications
Every adult who is 18 years of age or older must complete an application. If children under 18 will be living in the property, they’ll be listed on the application itself, but they don’t require their own form.
Make sure every application is signed. You’ll need to gain permission to do background and credit checks, and that’s what a signed and completed application will provide.
Review Financials: Tenant Credit and Income
Perhaps the most important part of your screening process is the financial aspect of your prospective tenant’s background. It’s important to know your residents can afford the rent. There are two ways to ensure they can.
First, you’ll check credit. Very few tenants will have perfect credit, and that’s okay. Requiring a 750 credit score is a bit unreasonable; you’ll have a hard time finding a tenant quickly. So, set reasonable standards. But, you don’t want to see a lot of debt, particularly housing-related debt. Utility accounts that are in collections or money owed to former landlords are huge red flags.
You’ll also want to verify income. Most Las Vegas property management companies will require income that’s at least three times the amount of rent. You can document this by asking for pay stubs, bank statements, tax forms, or employment contracts.
Run a National Background and Eviction Check
You want to know you’re not renting to a tenant with a violent history. Check criminal records and leave space on the application for potential renters to explain any legal issues that might come up in their background check.
Look for past evictions as well and decide how you will handle them. A tenant who was evicted 10 years ago and has an otherwise solid rental history since then may be less problematic than an applicant who was evicted twice in the last five years.
Verify Rental History
Verify rental history by asking for landlord references. Call or email these references and ask about their experience with the tenant you’re considering. You’ll want to know if they paid rent on time, took care of your property, and followed the terms of the lease agreement. Ask if they got their security deposit back in full and if proper notice was given before they vacated. Find out if those landlords from the past would rent to your prospective tenant again. This will tell you everything you need to know.