As a landlord, you’re not going to let just anyone move into your property. However, do you know how to find the right tenant? Getting the right tenants takes a little work, but it’s not hard if you have a process in place. Hopefully, bad tenants are the exception, but you can’t avoid them if you’re not screening for them. Here are some tips to help you select the best tenants for your Las Vegas rental(s), no matter how many units you have or what kind of properties they are.
Understanding the Law
There are certain things that you can and can’t do when it comes to renting properties in and around Las Vegas. For starters, you must follow the Federal Fair Housing Act, which says that you cannot discriminate when you are screening tenants. Although the law specifically names certain circumstances, it’s basically a blanket rule that means everyone gets an equal chance.
The most common factors on Fair Housing Rules include race/ethnicity, religion, national origin, gender, and disability. When you’re screening tenants, you should only look at their financial history and prove that they are responsible enough to rent the unit. Judging a tenant based on any demographic features is not permitted, and also in bad taste as a professional.
Credit Check and Income Verification
There is often a point of contention around the topic of credit checks, but as a landlord, it ensures that people are a reliable source for paying their bills. To find the best tenants for your property, you’ll need to make sure you perform a credit check to check their financial responsibility. Those who have good credit or a good history of paying other bills on time will be more likely to pay their rent on time, after all.
There may be the occasional exception where someone has poor credit but can explain the situation or prove that they are still worthy and reliable, but for the most part, you’ll want to just rule out those with a bad history because it probably means they struggle with paying their bills on time. There’s a fee associated with this, and you can choose to charge it to the applicants if you’d like.
First, you’ll want to check their income. Ask for copies of pay stubs or bank statements showing direct deposits from an employer. Then, call the employer to verify their employment. Some employers will only tell you whether someone is employed. Others may be more willing to answer additional questions, such as how long they’ve worked there, what they earn, and what their attendance is like (another sign of responsibility).
Then, you’ll want to check their credit for a few things:
- Collection accounts, judgments, bankruptcies, and other public records
- Past due accounts
- Debt-to-income ratio (the less debt, the better)
- Income-to-rent ratio (tenants should earn about three times your rental fee)
Background Checks
The great thing about criminal information is that it is a part of public record. While this might not be ideal for tenants, it’s great for landlords, employers, and others who need to check up on people and make sure that they are indeed responsible, who they say, and that they aren’t a convicted criminal or someone that isn’t a good idea to rent to. All you need is the person’s name and date of birth, and you can get access to records from the following sources:
- Federal
- State
- County
- Department of Corrections
- Sexual Offender Database
This can be time-consuming to do on your own. Consider outsourcing to a screening company or hiring a Las Vegas property management team to take care of this. There’s no nationwide database so it takes a lot of time to sift through all the records. Some states also prohibit discrimination based on criminal records in select cases, so be sure you know the law.
Rental History
This is a big one. After all, there’s no better educator than experience. When you are looking at their rental history, you should get a reference from at least two previous landlords, if they have them. This helps avoid “problem tenants” because you’ll have more than one reference. If there is no rental history, you can always require a co-signer or additional deposit, but that will be at your discretion.
When checking rental history, ask things like:
- How long did they live at the property?
- Did they pay their rent on time? If it was late, how frequent were late payments?
- Did the tenant complain a lot or cause problems?
- Did they keep a clean/neat unit?
- Did they give proper notice when vacating the property?
- Did the tenant keep up with necessary maintenance and repairs or notifying of them?
- Why did they move?
A Quick Note on Space Considerations
There may be limitations on how many people can occupy a property. However, even if there aren’t, you should limit your tenants to two people per bedroom so that it’s not overcrowded. There may be variables here, such as the size of the property that could allow for more people even without an additional bedroom, or for example if you are renting a one-bedroom unit to a couple with a baby. This is sometimes tricky because familial status can’t be used to discriminate on housing, but if there functionally isn’t enough space, it isn’t safe or smart.
Trust Your Gut
There is no amount of technology, screening, or reference-checking that can make up for that gut feeling. Sometimes, you just have to let your instincts lead the way and help you decide who’s going to be the best fit. You are probably a decent judge of character on your own, so even if someone doesn’t measure up, you might feel like you want to give them a chance. Conversely, if someone seems to check out and it doesn’t feel right, don’t hesitate to question it.
The best property managers know how to trust the process and still keep their “gut instinct” in mind to get the best tenants every time.
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