Quick Guide to Effective Tenant Screening in Austin, Texas

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As a landlord in Austin, Tx it’s normal that you face challenges when it comes to managing your property (especially if it’s your very first one).

Nevertheless, with our experience in the industry, we can help you avoid a common source of many problems: selecting the wrong renters.

The solution to avoiding problematic tenants is to have an effective screening process in place. This allows you to safeguard your investment property.

Continue reading to learn the basics of efficient tenant screening. After reading this article, you’ll know exactly how to minimize the tenancy risks in your Austin rental property.

#1: Perform a background check

There’s a good chance that your prospective tenant’s past may tell you something about their future. That’s why it’s important to run a background check that looks for a criminal history, prior evictions, or information from public records.

It’s important to note that criminal records should be looked at thoroughly. The prospective tenant may have an incident on their record that was very minor and happened many years ago. Most property owners avoid renters with serious or extended criminal sentences.

Although a recent eviction is a sign of a problematic tenant, always be sure to ask for more details and gather background information. If the renter proves to be outstanding in other aspects, then you could try to understand what led to the incident.

#2: Check their credit history

A credit check is an important step. You’ll learn about their credit history from the past 7 to 10 years.

When you look at the credit report, there are two main aspects to analyze. First, it’s their credit history.

Did they have any late payments or charged-off credit cards? How about a problem like bankruptcy?

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Do note, however, that a few discrepancies here and there won’t necessarily mean they prove to be problematic. However, showing a clear pattern of poor financial behavior is a red flag.

Another approach is assessing their current financial situation.

Big loans? Maxed out credit cards? Unpaid balances?

All of these signs should raise some concern. You need to keep an eye out for any current financial trouble.

#3: Request relevant information

Prospective tenants should fill out a rental application. This is your first line of defense against problematic tenants. The application should incorporate data about their employment, finances, and lifestyle.

Here’s a brief overview of other things you should ask for:

  • Personal references along with contact information.
  • Previous landlords and their contact information.
  • What’s their income level?
  • Who are their previous employers? Where are they working now? For how long have they been employed now?
  • Bank accounts? Credit cards? Include their balances and minimum monthly payments.

#4: Contact the references

Although contacting the references may take up some time, it’s an important step you should take to increase your chances of selecting a great tenant.

When you contact their previous landlords, inquire about the following aspects that might indicate potential issues:

  • Did they have any problems with the neighbors?
  • Was there any damage to the rental space?
  • Did the landlord notice a pattern of late payments?
  • Any significant debt?
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In the same fashion, you should contact their current and former employers. The current employer is most important because they are able to confirm the potential tenant has a steady income for months or years to come.

Do keep in mind that not all employers give out specific information about their employees. But you can be certain that they’ll let you know whether the person is employed with them or not.

#5: Conduct a structured interview

So far, we’ve focused primarily on people that are connected to the tenants but not the tenants themselves. It’s vital to speak with the applicants as well.

Before making the calls or hosting an open house event, remember to review the landlord-tenant laws and the Fair Housing Act. Here are some questions you could ask the prospective tenants:

  • Why are you moving?
  • What do you like about this particular property?
  • Are you a smoker? If yes, where do you usually smoke?
  • Do you have friends or relative that often stay for a night at your place?
  • Do you have pets? If yes, then ask for further information.
  • How is everything at work?

The bottom line: how to effectively screen tenants in Austin, TX?

It’s important to remember to always screen your tenants for your Austin property. Even though the procedure may take some time, it shouldn’t be something that is skipped over. If you feel that you don’t have enough time or experience in the industry, look to hire a property management company in Austin to do it for you.

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The first step is to create application forms. Have all your prospective tenants fill out the applications. Then contact their previous landlords, current employer, and any personal references.

Run a background and credit check. Analyze the results to make a fair decision regarding their application. Finally, don’t forget to interview the candidate. Ask for any information that might hint at your future relationship with them.