First time landlord. My first screening, where to begin ?

Question

Ok. So here it is. This is my first so to speak rental. I bought a duplex last year and had a tenant in place. This tenant has been good so far, paying rent on 1st of the month (Haven't done final exit inspection yet), no complaints and so far so good. She will be vacating her unit end of September, and now I need to find a replacement. I already have lease from BP. I have sevreal enquires so far (word of mouth) for the place. Question is How do I proceed from here on ? Do I just go to cozy, sign up and it walks me through tenant screening and rest of the stuff. All these enquires have asked me for an application and I do not have one in hand. Do I just direct them to cozy ? I also need to advertise this rental on Facebook.

I could also hand this over to management but I would like to do it myself for few months before I turn it over to mgt company. Any input is appreciated.

I could also hand this over to management but I would like to do it myself for few months before I turn it over to mgt company. Any input is  appreciated.

Kenny Dahill · Answer

@Manmath D., congrats on the deal!  Good call coming to BP to learn more because tenant screening is one of, if not, THE most important elements for success.

There are a lot of sites that will provide screening reports; Burbz, Cozy, TenantCloud, RentPrep, etc.  However, they're just reports.  You must still do your own due diligence to make sure they meet your criteria for renting.

Here are items to review:

• Job Security:  How long have they been at their job?
• Income:Rent:  Typically landlords want a 3:1 ratio, but this is the summed tenant(s) income.  If it rents for $1,000, they must earn $3,000 per month.  This allows them money to pay for other expenses: auto, food, taxes, etc.
• Evictions:  Have they ever been evicted before?  Big red flag.  Perhaps they have a valid reason; if so, you can negotiate higher security deposits.
• Bankruptcy:  If any, have them explain.  A lot of people have had bankruptcies in the past but now they're trying to rebuild their credit.  It's not the same as evictions, I'd call it a yellow flag.
• Application:  Have them fill out an application so you can learn more about them: jobs, previous landlords, pets, roommates, etc.
• Referrals:  They're a joke.  Has anybody ever given a bad review of a referral?  It's always their neighbor or aunt it seems.  Still have them provide it if you want and feel free to call if you it makes you more comfortable.
• Proof of Income:  They need to provide their previous 2 months of income statements to verify what they list on their application.
• Proof of Funds:  They need to provide their previous 2 months of bank statements.  This allows you to A) confirm they have enough money and B) learn their spending habits.  You'll want to see any big ticket expenses like car payments or student debt.

I hope this helps you out!  Please feel free to reach out if you have any other questions.  Everybody has to start somewhere.

Rob B. · Answer

@Manmath D. - there are definitely a lot of helpful tools out there. Definitely consider an option which allows you to collect rent much quicker than those others but still provides other rental management tools you might find valuable (again, not to knock Cozy or these other tools like Tellus), but you can easily keep track of who paid what and on which date with a tool that is reliable and fast. Definitely can help to make the process as painless as possible and more efficient for both parties (landlord + tenant), and also offers digital leases. Again, you may run into transfer limits with some of those other apps which aren't necessarily designed for the purpose of rent collection but the right landlord software can make this seamless for you. Would love to learn about any additional needs; definitely helps to keep landlord solution providers on their toes!

Timothy VanWingerden · Answer

I recommend Brandon Turner's book on Rental Property Management. It was a good primer when I started last year and I used his forms as a template to make my own. A good screening criteria is key like the others have been saying. Try to think systematically through the process and put it on paper so that you are consistent when you communicate to prospective tenants.

SmartMove is great for the credit and background check.

I use Cozy for payments.

Thomas Dougherty · Answer

Personally, I use Tellus App for my rental management. As for screening reports, they partner with naborly and offer us free screening reports. Their reports are thorough and comprehensive including all the information I needed, like credit score, rental history, criminal record and income verification. You can also use their app for rent collection, financial tracking, maintenance and repair tickets. Check it out!

Jon A. · Answer

I use cozy for payment and screening. I just text or email the link to those that pass my pre screening. I pre screen over the phone and ask basic questions so that I am not wasting my time or theirs. I ask about pets and size of family and if they have roommates or not. I also ask what date they want to move in and why they are moving and where they are moving from. I do not rent to people that aren't in my area to show it to. I don't do any facetime or video tours. They have to be here to see it so they know the location and the property itself. If they have roommates or spouses, they have to be there also. You will get a lot of people that just want to see the place and have no intention of applying, but they want to know how much they can get for their money. I don't blame them for trying but I am not going tie up my day showing a rental to people that don't qualify. It can seriously take up a lot of time if you don't weed them out to begin with.

I also advertise on fb marketplace and some of my local fb groups. For some of those groups I have to create a separate listing and cannot link directly to cozy per their group rules. I don't advertise on craigslist anymore due to scammers copying and pasting my ads for a lower price. I delete the same ad from scammers daily it seems on my local craigslist.

I advertise my rental on zillow also, but I don't accept applications through zillow so I turn that option off. Zillow allows a tenant to apply one time and then shop for other rentals with that application.

Chris R. · Answer

Congrats on the duplex! We use Cozy for rent collection and I think their screening tools are good but TransUnion’s SmartMove is rock solid.

Screening for the right tenants is so key. On our prospective tenant showings, I hand them a 2 page FAQ doc that lays out the basics about the rental and in that document, it talks about paying rent and the schedule. We’re very structured around defining what is on time and when late fees are assessed. I tell them Cozy is our management company and they assess a stiff penalty if rent isn’t paid by the 4th ($50) so we just look like the messenger and pretend like it’s out of our control. Their reaction to this news will tell you a lot. When we get to the point of checking background and financials, we ask the tenants to pay the full $40 each for a SmartMove screening. It leaves no Stone unturned and gives you reports on everything with a final cumulative risk score. Takes out a lot of the guess work! Good luck!

First time landlord. My first screening, where to begin ?

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