Did you know that the latest data shows that rents in the Denver metro area are still rising, with a 1-bedroom apartment being rented for an average of $1775? A 2-bedroom apartment rents on average for $2,350.
If you are a real estate investor in the Denver metro area, you will want to ensure that you pick tenants that are capable of paying such high rents, so you don’t have any cash flow issues. Keep reading to find out 5 mistakes folks make when performing tenant screening.
1. Ignoring Their References and Employment History
There’s a reason why tenant screening involves checking each tenant’s references and employment history. Even briefly glancing through this information, can give you a lot of information about the tenant.
It can help you gauge whether they would be a good fit for your property by being able to pay their rent on time. Ignore this information at your own peril.
2. Not Being Aware of Local Housing Laws
To protect tenants and landlords, there are many local housing laws in place. You can’t make up your own rules when performing tenant screenings. Make sure you check with other local real estate investors or tenant screening services to find out what the best practices are.
3. Not Checking Their Credit Score Properly
A credit score is the single number that gives you an easy view of the tenants’ financial history. Make sure you spend the time to check their credit score properly. It’s easy nowadays since a lot of credit score companies are online and have made it easy to check on credit reports.
Don’t forget to ask your tenant for permission before doing this, though. Even though it’s common practice, you still need to get their consent.
4. Not Using a Proper Tenant Screening Service
There are many tenant screening services out there now, but that doesn’t mean that all of them are built the same. Some of them are just going to waste your time and money, so choose the right tenant screening service.
5. Not Trusting Their Gut When a Tenant Screening Feels off
Too many real estate investors will sense that there’s something off about a client, but won’t know exactly what it is. If your intuition is telling you something feels strange about a tenant, listen to it, and don’t go forward with the tenant. If you do, it will come and bite you in the behind later on.
A Property Management Company Can Help
If you are sick and tired of doing tenant screening for all your properties, then why not hire a property management service. We can help you with not only tenant screening but with everything else related to managing your properties.
If you are in the Denver Metro area, we are more than happy to have a chat with you to discuss how we can help. Contact us today and relieve yourself of the various burdens associated with investment real estate ownership.
