All Forum Posts by: Tom Ott

Hello Alexander!

Great question! This is something I see a lot with my company. 

To answer your first questions I would say, YES, always run a background check on a cosigner! You want to make sure they too fit your criteria for leasing. They must meet the same requirements you have for your tenants. If you have any doubt in your mind be sure to check. Also, yes you should run a background check on the tenant as well. Both of them are equally important and you want to make sure they have clean backgrounds.

To answer your second questions, yes, the cosigner must sign the lease. Treat the cosigner as if they were a tenant. Explain to them all of the rules and polices within your lease. They need to be just as aware of everything as your tenant is. They are also responsible for the unit so they need to follow all of the rules as well.

Some things I like to consider when doing a background check are:

Have them sign an authorization form, which allows you to look up their credit report and do a background check. Never simply look at a credit SCORE, but make sure you look at the whole REPORT. Someone could have a good score, but owe a lot of money on collections. (I know, but it happens)

Analyze their credit report and if you feel comfortable, do a background check and make sure their criminal history checks out.

Another key factor is employment history. Make sure they have a job of course! You also want to make sure they have had the job for more than a few days. Remember their ability to keep their job (or have a steady income) will directly effect their ability to pay the rent.

We always have them submit pay-stubs. 2 - 3 most recently ones give us the information we need. You want to use that information to check to make sure they have enough money to pay their bills, including the rent. We don't normally ask for a license until they are signing documents, but that might be different depending on your state.

Please let me know if you have any questions!

 Yes, doing a rental verification should help. Of course always be aware it could be a friend, you are right. 

Well it sounds like this person should be able to check out as a decent tenant. Just make sure you feel okay about it!

 Hello Kimberly,

This seems like a hard situation! On one hand the applicant is below your limit, and on another they may turn out to be a good tenant. Just because they have a lower score doesn't mean they can't make the bills. You have to remember to take EVERYTHING in account.

Some guidelines I like to follow are:

have them sign an authorization form, which allows you to look up their credit report and do a background check. Never simply look at a credit SCORE, but make sure you look at the whole REPORT. Someone could have a good score, but owe a lot of money on collections. (I know, but it happens)

Analyze their credit report and if you feel comfortable, do a background check and make sure their criminal history checks out.

Another key factor is employment history. Make sure they have a job of course! You also want to make sure they have had the job for more than a few days. Remember their ability to keep their job (or have a steady income) will directly effect their ability to pay the rent.

We always have them submit pay-stubs. 2 - 3 most recently ones give us the information we need. You want to use that information to check to make sure they have enough money to pay their bills, including the rent. We don't normally ask for a license until they are signing documents, but that might be different depending on your state.

Please let me know if you have any questions!

 Hello Kevin,

Welcome to the world of REI! It is a very exciting one.

My advice on tenant screening is:

First thing you need to do is have them sign an authorization form, which allows you to look up their credit report and do a background check. Never simply look at a credit SCORE, but make sure you look at the whole REPORT. Someone could have a good score, but owe a lot of money on collections. (I know, but it happens)

Analyze their credit report and if you feel comfortable, do a background check and make sure their criminal history checks out.

Another key factor is employment history. Make sure they have a job of course! You also want to make sure they have had the job for more than a few days. Remember their ability to keep their job (or have a steady income) will directly effect their ability to pay the rent.

Always fill out a hard copy of the application. We let people apply online or in person. If they apply in person we simply input the data ourselves. It is always handy to have he hard copy when needed.

We always have them submit pay-stubs. 2 - 3 most recently ones give us the information we need. You want to use that information to check to make sure they have enough money to pay their bills, including the rent. We don't normally ask for a license until they are signing documents, but that might be different depending on your state.

Please let me know if you have any questions!

Hello Johann,

This is an excellent question! When determining if applicants are a good fit for your unit, you want to make sure you look at the picture as a whole. Does the good outweigh the bad? 

Always have all adults on the lease. If that guy causes any problems you will not be able to take legal action against him. He will be free of your regulations.

If all of them make enough money to cover their bills and pay the rent then I don't see why you should not go with them. Assuming their background has checked out, you might want to consider a double security deposit. 

Also, do some research into that eviction. Was there any judgment against him? If so, did he pay it?

Make sure to look at the whole picture. If you still have a good feeling about it go ahead with them.

I get applicants like this all of the time. You want to make sure to review EVERYTHING. Your unit is important to you and the last thing you want to do is rent to someone who will cause problems.

Please let me know if you have any questions.

 I would recommend calling yourself. It is always a good practice to gather that part of the information yourself. This way you can ask what you want and get the answers you are looking for. You can even ask some follow up questions to some answers you might not like.

I wish you the best of luck! It seems like that will be a perfect place for REI! I hope it all goes well.

Let me know if you have any other questions.

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** The performance information shown are projections. These are not actual results. These projections are based upon various assumptions and representative properties. No representation is being made that a performance record similar to the projected returns will or is likely to be achieved**

 Nicole makes excellent points! I have found that having an online software where the tenants can send in a request works well. Even they want to send the email at 3:00am that is fine, but you do not have to look at it until the morning. Of course, not everyone likes using online requests so people will still end up calling anyways.

 Hello Luke,

I would have to agree with @John Dirgo Deweese. AppFolio is an excellent application that manages your properties and tenants in the same. You can also use it for your accounting needs.

It can be very detailed and help you manage everything about your properties. It seems to be a very user friendly system and I have had no complaints in my experience with it.

There are a lot of applications out there and I understand it can be overwhelming. Please let me know if you have any questions.