If you just bought a luxury apartment that you want to use as a rental investment property, you need to make sure that you find tenants who will respect the apartment that you purchased and who will pay their rent on time. Here are a few things you need to make sure you look at and for when screening potential tenants for your rental.
No Previous Evictions & Good Landlord Recommendation
The first thing you should do is make sure that the potential tenant did not list any previous evictions. Next, you need to follow up and make sure that information is correct by calling up their previous landlords. Don't stop at the first landlord, make sure you go through the entire list and get a full picture of their rental history.
Clean Background Check
The first thing you should do with any potential tenant is run a criminal background check. You don't want to rent your property out to someone who has a long criminal record and has demonstrated that they don't like to follow the rules of society.
Clean Credit Check
Next, you should run a credit check on any potential tenants. A fair credit scores starts around 650 and an excellent credit score starts around 750.
However, you shouldn't dismiss a low credit score. Many young individuals who have not had a lot of time to build up a credit history may have a low credit score. That is why you should also look and see if they pay their bills on time; if they do and just have a short credit history, they could still make a viable tenant.
Employment & Income Check
Finally, make sure that you verify their income and their employment. You need to check and make sure that their income is at least two to three times the amount that you will be charging them in rent. If their income is not larger than their rent by at least two or three times, you may run into issues with collecting payment in the future.
Make sure that the provide you more than one pay stub to verify their income as well; you don't want to rent to someone who just happened to have one big paycheck, but generally makes a lot less money.
You should also call up their employer and verify that they do in fact work their and they the length of time they wrote that they have been employed is correct.
If you follow all the steps listed above, you should be able to find a tenant for your luxury rental apartments that will respect the property and pay their rent on time. If you need assistance with this process, you can hire a firm that assists with screening prospective tenants for landlords and assists with property management.