We’re continuing our series on Renting Your Home Like Pro without using a Real Estate Agent. In this series, I’m walking landlords with investment properties in Northern Virginia through the entire process of marketing their rental property to securing a tenant like a professional.
There are four criteria we consider when reviewing an applicant’s application.
Credit Check
Review their credit score and history. A FICO® score is a three-digit number ranging from 300 to 850 that is used to determine someone’s creditworthiness. In addition to their credit score, you also want to take a look at what’s included in their credit history. Late or timely payments matter. How much debt do they have? Are their credit cards maxed out or close to the limits.
If the applicant has little to no credit history, you may want to dig deeper. How do they plan to pay the rent? What else can you look at to determine if they are a risky applicant?
Background Check
We always do a criminal background check in addition to the credit check. This will give you an idea of their character. A criminal background check will screen for everything from traffic and moving violations to more serious crimes and convictions. Once again, this will allow you to assess the risk of the applicant. Finding information on their criminal background check doesn’t have to be disqualifying for you, but it will paint a broader picture of who the applicant is.
Employment Verification
Many times investors will take pay stubs at face value. We always recommend verifying the authenticity of the pay stub by speaking with their employer directly. That means calling the supervisor listed on the application and speaking with that person. Then you can find out how long the person has been with the company. How long have they been in their current position or at their current paid rate?
Many employers will not release this information without written authorization from the employee. That’s why we always include an employee verification form with our applications. You may not need it for all applicants, but it’s a time saver and much more efficient to already have it in hand and ready to go should you need it.
On the risk meter, a person that has been with their current employer for several years may be less risky than someone that has recently been hired.
Residential History
The last thing we recommend confirming is residential history or eviction history. If your applicant has leased or is currently leasing a property, you’ll want to confirm their rental history. There are two things you’ll want to verify before approving or rejecting this applicant.
- Does the tenant have any evictions on their record? It takes seven years for an eviction to be removed from a person’s record.
- Check with the tenant’s current or most recent landlord or property manager to confirm payment history. If the landlord didn’t report late payments, they wouldn’t show up on their credit report. By having a conversation with their previous landlord, you may be able to get more information than what’s undercovered with the background/credit check.
Final Thoughts
Don’t forget to check out our Ultimate Guide to Renting Your Home Without an Agent. If you’re thinking about renting your investment property and want to enlist the help of a professional give, me, Abraham Walker, a call at 703-539-2053 or email me.
About the Author
The above article was written by Abraham Walker, Your Northern Virginia Real Estate Agent, helping clients market their homes to achieve high sales with a quick closing time is my main priority. He’s the co-founder of Ask A Walker and can be found on YouTube, Facebook, and HERE on this blog.
