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Tenant screening is an important cornerstone in real estate investing. After all, you want to be sure that your investment properties are properly cared for and earning you a reliable amount of passive income.
So, before allowing anyone to sign a lease agreement you need to be sure that they are a qualified tenant who is responsible, reliable, and respectful with your property. This is why, as an investor, you need to make sure you are asking the correct screening questions to ensure you are only accepting the best tenants for your properties.
To help you determine the qualifications of a tenant, here are eight screening questions you should be asking prospective tenants.
However, before we get started with the screening questions, if you are looking to expand your skills as an investor, we invite you too sign up for a free strategy call with us at LendCity at the link below.
8 Screening Questions for Prospective Tenants
One of the most important steps you can take to protect your investments is to write and ask proper screening questions. After all, if you are light on the screening questions it is far more likely that you will accidentally invite an unwanted tenant into your unit.
So, in order to help you ask better screening questions, here are eight screening questions we recommend asking potential tenants.
Why Are You Moving?
Moving is rarely something people take lightly. After all, packing up your life and relocating to another place is exhausting and takes a lot of time and effort. So, you want to make sure each tenant is moving for a good reason.
Perhaps your tenant is pursuing a new job opportunity. Or maybe they were looking to upsize their living arrangements to accommodate a growing family? There are plenty of great reasons they could be moving that you can be given.
What you are looking for with screening questions like this is whether they are moving for a negative reason such as an outstanding conflict with their previous landlord or an eviction.
Have You Ever Been Evicted?
While the previous question may give you the answer to this question, some prospective tenants have evictions further back in their rental history that you may wish to know about.
If the prospective tenant has been evicted in the past, do not immediately disqualify them from your considerations. Instead, you should follow up by asking why they were evicted in the past. Sometimes, people get evicted due to reasons outside their control such as sudden unforeseen job loss forcing them to miss rent payments.
What you are looking for with screening questions like this is whether a potential renter who has experienced an eviction can be open and honest about the reasons why. If they can hold themselves accountable and be honest with you, it will be easier to trust them in the long run.
How Long Were You at Your Current Address?
Some people hop from rental to rental without staying in one place for very long. So, you want to know if a tenant has stayed in their last home for an extended period, or if they are moving after a brief period. If the tenant was not in their previous rental for long, ask them why. It may not be their fault that they are moving again so soon. Once again with screening questions like this, you are looking for honesty and accountability.
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How Long Do You Plan on Living Here?
Some investors want to find tenants who are willing to sign long-term leases and continue renting for years to come, while others are looking for shorter-term tenants or people who are looking to rent month-to-month. Regardless of your plans or investment strategy, you want to be sure that your wants align with the tenant’s plans. If you want a long-term tenant but the tenant plans to move in 6 months, it may be best to go with another candidate.
When Do You Plan to Move In?
Another important question you should be asking every tenant you interview is when they would intend to move into the property. Sometimes, tenants have time remaining on their current leases and are simply looking to secure a new rental ahead of time. If your unit is currently move-in-ready this candidate may not be a good fit because you will be leaving your unit empty until their lease is up.
However, if your property is currently inhabited and your tenant has time remaining, or if the unit needs some work done before it is move-in ready, a tenant with time left on their previous lease may be right for you.
How Many People Will Be Living with You?
As a landlord you should want to know how many people will be living in a unit for a few reasons. First, you need to be sure that the unit is not over-occupied. As well, this will give you a clearer picture of how many people will need keys and access to the unit. Finally using screening questions like this will give you a clearer picture of how many people may be splitting the rent.
How Much Do You Currently Make? (How Much Do the Other Tenants Make?)
Another key factor you should know when renting a property is how much the tenant(s) make each month. While it is important not to discriminate based on financial status, you also need to be sure that your tenant can afford the rent each month without missing payments. Often investors ensure tenants can afford to pay by running a credit check to ensure they are not living beyond their means.
In the event of multiple tenants, you will want to get this information for each tenant who will be contributing to the cost of rent. As well, you will need to determine with the tenants how the rent split will go. Some people opt to have individual tenants pay a specified amount of the rent, while others will determine a single tenant who will make the payment and leave it to the tenants to work out the split amongst themselves.
Do You Have Any References?
Finally, you should ask for any previous landlord references that they may have. This will allow you to confirm any stories they have told you with previous landlords and assess any information they may have left out. However, be careful to make sure the landlords you speak to are not letting any negative personal opinions they may have impact how they convey the tenant’s actual qualifications.
Screening questions like this are usually geared towards older renters as younger renters may not have references to provide.
If You Are Ready to Invest
If you are ready to begin investing in the world of real estate, or are looking to expand your portfolio, let us help you. Our expert team at LendCity is ready and equipped to get you started on the path to true financial freedom. For more information visit us online at LendCity.ca or give us a call at 519-960-0370. Alternatively, you can click the link below to book a free strategy call.