The Experts on the Real Estate Investor Show
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Jeff Smith, mentor and single-family investor joins the program along with Mike from National Tenant Network. Mike is a vendor who is an expert in tenant screening criteria.
“Tenant screening is the most important part of the property management process. Very much like property evaluation is the most important part of the real estate investor’s job, the same reasoning can be applied to tenant screening…” -Jeff Smith
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{ 10 comments… read them below or add one }
Over 2/3 of all landlords do not screen – can you see why the word on the street is that property management is all about HASSLES? What did you expect??!!??!!
For the rest of us, what are you looking for in a tenant? Does credit matter? Criminal history? Is all criminal history the same? Rental History? Rent/income ratio?
jeff.smith
You are so right! I learned the hard way how important tenant screening really is. After our first tenants, who we did not screen, we made it a specific rule to screen all future tenants. Since then, we have had no problems!
I’ve found it funny how the people who seem great in person are typically the ones with the most experience selling themselves as great people yet have the worst credit history. The ones you want to rent to don’t sell themselves nearly as well. Tenant screening levels the playing field for all potential tenants!
Trent, you come across warm and friendly too. Hmmmm . . .
What makes good screening criteria? Whats the most important factor? Least important factor? Or does good criteria even matter?
1. 3 or 4 x rent = income (provable)
2. 0 violent criminal history
3. 0 evictions last 5 years
4. 0 judgments for damages to property
5. 75% current credit lines / 25% max 30 days late / 0 60
6. positive references from current and past landlord
Jeff, Thank you very much for this invaluable information. Do you have any opinion regarding the credit score (a minimun?)
Thanks,
John
I don’t really use the score – I look at the content of the report. At least 3/4 of their accts must be in good standing. The remaining 1/4 can be late but no more than 60 days. This flexibility is only for those with perfect rental history and no criminal record. To me that is the perfect scenario, because they’ve proven that they will consistently and promptly pay for a place to live, but are just out of reach to buy – so they’ll probably stay longer, and if I want to sell, they aren’t a lost case that I can’t help them buy the house they’re already in (mine!).
For a new Landlord to do tenant screening on their own, especially a new one, how feasible is that? Would it be a good choice to go for a professional service? I tried it on my own the first time and it did seem hard especially if your working away from home.
Absolutely correct. In fact there are a couple of referrals in for this in the Lifestyles Vendor Directory. The featured guest of this episode of The Real Estate Experts Show is one of those preferred vendors (National Tenant Network) and the provider of the service that I use in my own business. You can download the entire directory by clicking the Free Listener Kit in the left column of this web page. Thanks for tuning in!