Real estate investment is one of the most important decisions you make in your lifetime. Owning and managing a rental property is not a one-time effort but rather demands constant care and attention, in order to reap the most benefits in the long run.
The first and the most important aspect of taking care of your rental property is to find a suitable tenant.
Especially in a state like New Jersey, you want to be assured that the applicant or a prospective candidate is authentic in every way, including legal, financial, and personal capacities. Any discrepancy or compromise in this regard will reduce the value of your asset, and cause significant damage to your investment. It is, therefore, critical to conduct a thorough tenant screening process to find and qualify a good tenant.
Here are a few essential processes that you need to follow during the screening process. Note that for all background checks, you need written consent from the applicant, so ensure that you have a section on your application form for getting the same.
Credit screening allows you to collect data from the credit agencies and records available for public viewing. This helps you in determining whether the information provided by the candidate is accurate. You can also check the non-payment history, if any, and the existing debt status of the applicant. This enables you to gauge their financial credibility, which makes it easier for you to make a decision.
Assessing Criminal Records
For obvious reasons, you do not want to rent your property to a convicted felon. As a landlord, you can request access to data acquired from county courthouses, federal court records, and drug dealing case history, among other sources, to run a criminal background check for potential renters. The focus of the report is determined by the type of report you have requested (subject to state laws).
Checking Eviction History
Eviction history is another significant component of the screening process. Scrutinizing the eviction history of the applicant eliminates the trouble of dealing with an individual who has been previously evicted by other landlords for unpleasant reasons. This will also save your property from housing tenants who are not dependable enough to pay regular rent.
Validating Renter Employment
While a prospective tenant may initially agree to the rental amount and promise to pay the rent on time, there is no guarantee that he/she will not default on it later. As a landlord, you need to be assured that the applicant is fully financially capable of making timely rental payments.
Validating a renter’s employment and income is a great way to gain confidence that you’ll receive the rent on time. It gives you a sense of security. Confirming the specifics of the renter’s employment, including salary, with their employer is an effective way to ensure that you’ll be paid on time.
Identity theft is a significant problem in the country and sometimes, there may be a probability of the candidate presenting incomplete or fake personal information to live at the property.
To verify an applicant’s identity, you can request a copy of the identification document that is officially issued by the government can serve as a key source of verification, such as a valid driving license, a valid (and not expired) passport, or a travel visa.
It is also important to examine the finer points of these documents, such as the government emblem, stamps, signatures, color, and the format, among other things. This eliminates the possibility of qualifying an applicant based on fraudulent documents.
Creating a screening checklist
One of the best practices is to create a comprehensive list of screening criteria and follow the same process for every applicant. This prevents you from indulging or practicing any discriminatory behavior towards prospective tenants.
It is also significant to keep your process absolutely legal, and in compliance with the landlord-tenant laws and the tenant screening laws. Having a checklist ensures that you do not treat anybody unfairly, even by accident.
A legal solutions provider for your real estate investment, such as Robert A. Gleaner, P.C, New Jersey, can help you navigate the legalities of the screening process with ease and confidence. RAGPC’s expert legal services offer you the best legal solutions for all your property-related concerns.