With property prices dropping to new lows, many more people are beginning to invest in real estate. Novice investors firmly believe that the key to success in real estate investment is to strike a ‘great deal’ after which the money will roll in. Many property managers are plagued by first-time investors who just want their property tenanted as soon as possible because the rent money is needed to meet the mortgage. But as any seasoned property manager will confirm this is not quite how it works, and being in a hurry to tenant a property often results in bad decisions which return to haunt the owner.
Who is this person?
To minimize the risk of making a bad tenant selection, tenant screening is an absolute must. It is only through tenant screening that a clear picture of the tenant’s background will emerge. You’ll be able to learn his/her rental history, credit report, employment record, and whether the prospective applicant has a criminal record. Based on this information, you as the owner or property manager can make an informed decision as to whether the tenant will be a proper fit for the property. This is something which shouldn’t be taken lightly because making a bad decision and signing a lease agreement with a bad prospect could well have avoidable and serious consequences.
Going No Where Fast
To cite an example, if an applicant has a track record of not paying bills on time then chances are that he will have the same attitude toward his rental obligations. A renter of this nature could easily turn a profitable real estate investment into a millstone within months.
Then there are tenants who neglect their rental homes resulting in big repair bills. A situation like this can be avoided with a quick call to their earlier landlords.
But a seasoned property manager will tell you that today’s tenant screening process is far more complex than ever before.
Talley Properties of Charlotte NC, which has been in the property management business for the last three decades, has developed a scoring system or its own to decide if an applicant comes up to the standard they set for occupying a property they manage. When the applicant provides details of all information required, points are awarded under the various heads, and based on the total the prospective tenant is advised whether or not he or she is acceptable.
Designing a Scoring System
A well-thought scoring system ensures consistency of tenant screening. This also protects the property manager from any Fair Housing claims a denied applicant could bring. Since the current economic situation is not improving and the specter of another recession looming and with high unemployment rates, you have to protect yourself because you do not want to have a lot of people living in your property who cannot or refuse to find work. This is another significant factor to bear in mind.
In the final analysis, an investor or owner should not allow the pressures of a mortgage payment cloud their judgment. As always, it’s better to be safe than sorry.
Keep Your Hands Clean and Look to Talley
Talley Properties is the preferred choice of a property management company for many homeowners and investors with rental properties in and around the Charlotte region. It has achieved this status through experience, being ultra-careful, and developing a sixth sense for making the right choice.