Residential Property Management Services in Northern Colorado
Especially if you’re a new landlord for a residential property, it can be challenging to become proficient at vetting potential renters. Thankfully, Mountain-n-Plains Real Estate Services in Northern Colorado has developed several protocols for finding the right tenants. The most important thing to remember before any vetting process begins is to be aware of what is legal and illegal to base your vetting process on. The Federal Fair Housing Act prohibits any discrimination based on race, skin color, ethnicity, religion, gender, familial or marital status, sexual orientation, or disability. That being said, here are some helpful tips for vetting renters!
Pull Applicant Credit History
With the consent of the potential tenant, you have the ability to check their credit report. Going over a renter’s credit report is a generally good indicator of their financial wellbeing, as it indicates the number of credit cards being used, outstanding loans, bankruptcies, repossessions, and other indicators of financial trouble. While a high credit score doesn’t necessarily automatically translate to “good renter,” it does help provide a general indicator of financial status.
Pay Attention to the Applicant’s Rental History
Examining a potential tenant’s rental history can shed light on their renting habits. If a renter has a history that includes multiple evictions, that can be a major sign of trouble and reason enough to pass on an applicant. Unless you are having a difficult time maintaining occupancy rates in your residential property, it’s recommended to avoid tenants with a history of multiple evictions. Of course, there are two sides to every story, and sometimes past evictions have more to them than meets the eye, but in general, it’s best to avoid renters that have been evicted again and again.
Perform a Background Check
It’s common for landlords to perform background checks on potential renters in an effort to avoid renting to individuals with criminal convictions — however, not all crimes are equal in their severity or how they should affect your decision. For example, there’s a difference between a DUI and an armed robbery charge. In 2019, Colorado also passed the Rental Application Fairness Act which states that landlords “shall not consider an arrest record of a prospective tenant from any time or any conviction of a prospective tenant that occurred more than five years before the date of the application.” The only exceptions to this ruling are related to methamphetamine crimes, sexual offenses, homicide, and stalking crimes.
Ask for Pay Stubs
As a landlord, you’ll want to ensure that a potential renter has the ability to pay their rent on time every month. In order to do so, you can request pay stubs or another proof of income for verification. While the accepted income-to-rent ratio varies wildly in different parts of the country, the generally accepted ideal ratio is that an applicant’s annual income should be about 40 times their monthly rent. Knowing this information will help you avoid situations with renters living in a space that is too expensive for their income.
Are you in need of property management services in Northern Colorado? Contact the team at Mountain-n-Plains Real Estate Services today to learn more about how we can help you in your role as a landlord.