One of the things we’re most proud of as Kansas City property managers is our ability to attract, identify, place, and retain high quality tenants for the properties we manage. We can avoid problematic renters because we have a rigorous and consistent screening process in place. We also invest in good relationships with our tenants, which cuts down dramatically on late payments, lease violations, and property damage.
Let’s talk about the importance of tenant screening for your Kansas City rental property, and how we can help you enjoy a profitable and pleasant rental experience with a good tenant.
Qualifying Rental Criteria and Fair Housing Compliance
We invest in a careful and strict screening process, and we also understand our legal obligations and the importance of being fair to all applicants. We want to spend time screening applications that are likely to be approved. Otherwise, we’re wasting our time and the application fees that tenants are paying by going through the motions for a tenant who is not qualified to rent the homes we manage.
That’s why qualifying rental criteria is so important. It allows us to share what we’re looking for with prospective tenants, and it allows those future applicants to decide whether or not they have a good chance of having their application approved.
The qualifying criteria also keeps everything fair and objective, protecting you from potential fair housing violations.
We document and share our list of rental criteria before anyone applies. Even our listings include some of our requirements, and that’s to attract only those who are qualified. When we state whether pets are allowed, what type of income and credit standards we have, when tenants will be able to move in, and the length of the lease term we are looking for, our pool of applicants shrinks a bit, but it saves us from allowing an unqualified tenant to move in. When we include as much information as possible in your listing and then we provide our qualifying criteria, we know that only qualified tenants will apply.
We are open and transparent about what we are looking for during the screening process. This criteria will reduce eviction rates and cut down the amount of time that’s spent managing bad tenants.
Qualifying criteria does not violate fair housing laws. Instead, it sets forth our minimum requirements for income, credit, and background information.
Complete Rental Applications
Screening starts with a thorough rental application, which you will want to have completed in full. Don’t let tenants leave questions unanswered or spaces blank. Screen every adult 18 years of age or older who will be living in the property.
Always make sure the application is signed. The signature is what gives you permission to conduct the background check, pull the credit report, and talk to references.
Children may move into the home as well, and while you don’t have to screen those individuals who are under 18 years of age, you still want to identify them. Ask for their names and ages so that information can be included in the lease agreement. You need to have a record of who is living at the property.
Most tenants will expect an online application. At Rent Robin LLC, we can easily provide this thanks to our property management software. We’re using an application that is legally compliant in the state of Missouri. We have the technology that allows applicants to submit the application online as well as any of the supporting documentation they might need to submit, such as a photo of their driver’s license or copies of pay stubs.
Avoiding Problematic Tenants with These Screening Steps
Once the rental criteria has been shared, the application has been completed, and the fee has been paid, it’s time to gather the information that will tell us whether the tenant is well-qualified or a potential problem.
Here’s what we’re looking at:
Income
A problematic tenant has no income or income that cannot be verified.
Always verify income.
Problematic tenants will often claim to earn a lot of money and insist they have a great job, but that information often cannot be proven. The information that a tenant shares on the application needs to match what you can document in pay stubs, bank statements, or tax records.
The income standards have to be non-negotiable and aligned with your rental criteria. The most important part of your screening process may be checking income against the amount of rent you’re collecting. You want to be sure your tenants can afford the rent, otherwise you’re setting them up for failure.
Typical best practices in Missouri property management say that a tenant should earn at least three times the monthly rent to safely cover that expense and meet their other obligations. What does this mean for you? It means that if your rental property is $1,500 per month, you need to see a total of at least $4,500 a month in earnings.
This income requirement can extend to all of the tenants who are moving into the property. So, adult partners who earn their salaries can combine that income to meet your requirements, as can people who are moving in with roommates.
Avoid problematic tenants by denying any application where income cannot be verified.
Credit and Evictions
A problematic tenant has a rich history of evictions. The problem, of course, is that most tenants with evictions on their record will not be so forthcoming during the application process. That’s why it’s so important to run a credit check and a nationwide eviction check.
A lot of rental property owners will have a credit score cut-off as part of their criteria, and that can be valuable in determining who will be considered and who will not. At Rent Robin LLC, however, we look beyond the score and check into the details. Our tenants don’t need to have perfect credit, but we do want to see acceptable credit. We want evidence that this tenant pays their bills.
Recent evictions are especially problematic, and we will not approve a tenant who has been evicted more than once. Evictions are a problem because they are evidence a tenant did not pay rent or violated the lease agreement in a major way.
Seeking a Positive Rental History
A great way to avoid problematic tenants is to check their references. On the rental application, we ask for at least two landlord references. Verify the contact information so you aren’t calling the applicant’s friends or family members. If someone had a bad experience with landlords in the past, they won’t want you talking with them.
We always encourage landlords to talk to current and former landlords, and this is one of the reasons our screening process is so effective. We will make a phone call or send an email asking for a reference. A current or former landlord can give us a clear understanding of how your prospective tenant behaves in the property they rent. This should be part of every screening process, especially when you want to avoid problematic tenants.
Questions to ask a landlord reference might include:
What were the dates of residency?
How much rent did the tenant pay?
Was the entire security deposit refunded?
How much notice was given before the tenant moved?
Was any property damage left behind?
Were there pets? Did the pets behave or cause problems?
If rent was late once or twice, ask how long it took for the tenant to catch up. You can also ask if the pets were well-behaved and if the tenant followed the terms of the lease agreement.
Would this landlord rent to that tenant again? That’s a pretty important question that can tell you everything you need to know.
The tenant screening process provides us with a lot of data that we can use to make an objective decision. We know that an investment of time and resources into proper tenant screening is worth it because problematic tenants can have a very negative impact on your rental experience and your earnings. They pay rent late or not at all. They damage property. They violate the lease.
Our goal is to avoid all of that.
Once a decision is made, we will issue an approval or a denial to our applicants. When we deny a tenant based on credit issues, there’s some specific wording that needs to be included in the letter that we send them, following the Fair Credit Reporting Act. If you’re screening on your own, make sure you have access to this and you know what to do with all the information you’ve collected on this tenant, even if you are denying their application.
One of the ways in which we earn your trust is by placing good tenants. There’s a lot more we can do to help you have an exceptional experience as a landlord or an investor. Please contact us at Rent Robin LLC. We manage rental homes in Kansas City and throughout Cass County.
