Tenant turnover can cost anywhere from $1000 to $5000. These costs cover everything from cleaning a vacant apartment to marketing the property to secure a new tenant.
What can you do to lower tenant turnover and lower expenses? It's time to start leasing to more reliable tenants, a process that should begin as soon as you receive an application.
We're talking about tenant screening. Tenant screening involves running credit and background checks, and can include additional steps like contacting the applicant's previous landlord.
Why is tenant screening so important and how can it decrease tenant turnover? Read on to find out.
Reducing Liabilities
Tenant screenings allow you to get a look at an applicant's criminal background, if any. You can also investigate a tenant's rental history, determining how long they've stayed in a single place and whether or not they've broken leases early. More importantly, you can discover if an applicant has any history of evictions, which is all the more important now that California has tightened its eviction laws.
Knowing about an applicant's history can help to reduce liabilities. You can find tenants that are less likely to vandalize your property or commit criminal activity on your property. You can also find tenants that don't have a history of breaking their lease or getting evicted.
Eliminating Lost Income
Credit checks are a central part of the tenant screening process. The best tenants will have good to great credit, limited debt, and no bankruptcies or tax liens.
You can also ask to verify income in the form of pay stubs, bank statements, and more. The purpose of this is to find tenants that have enough disposable income to cover your rental fees. One of the biggest sources of lost income for landlords is late or unpaid rent.
How to Start the Tenant Screening Process
New landlords and real estate investors may not know how to implement the tenant screening process. It is important to ensure that you are compliant with all tenant rights and relevant laws in the process. You will also want to access the best tenant screening tools.
The easiest and most effective way to start screening tenants is to partner with an experienced property management company. This will allow for a seamless transition to a new and better rental application process. Plus, property management companies can turn your real estate investments into a form of passive income.
Advantage Property Management Services Can Help
Tenant screening is one of the key ways to secure the best tenants and reduce tenant turnover rates. If you don't already run credit and background checks or verify employment, it's time to start. Advantage Property Management can help.
At Advantage Property Management, we do far more than screen tenants for our Pleasanton property owners. We can improve your property marketing, handle tenant relations and maintenance, collect rent, and manage all finances. To find out more about how we can turn your investment into passive income, contact us today.
