Dean Galasso is the president of Manhatta Properties, a property development and management company he has led for over a decade that now has a portfolio of 10 prime properties. Focused on the South Florida market, Dean Galasso offers management services to property owners, renting out their properties to good tenants who pay their rent on time.
A good tenant is capable of reliably paying rent. When screening prospective tenants, take time to figure out their financial abilities. Ask applicants to provide copies of their pay stubs or bank statements, and make sure that their income is at least a certain multiple above rent, say three times rent.
Next, conduct a credit check. You can ask applicants to accompany their applications with a credit check fee. Ascertain whether they pay bills on time and look for previous bankruptcies or costly civil judgments. You also want to check a prospective tenant’s outstanding debt. If his or her monthly debt payments are high, he or she may find it difficult to pay rent.
Afterward, contact the prospective tenant’s past landlord. Ask whether the tenant paid rent on time, was respectful to neighbors, took reasonably good care of the property, and communicated well to facilitate routine maintenance.
Finally, perform a background check on the tenant. Watch out for past evictions and a history of convictions for serious criminal offenses. Also watch out for tenants who move or change jobs often, as they may rent for short periods of time.
Note, however, that some states prohibit landlords from denying renters with certain convictions on their records. Furthermore, property managers and landlords are prohibited by federal laws from barring renters because of their sex, race, religion, ethnicity, or disability status. Some state laws even prohibit discrimination on the basis of sexual orientation, age, or marital status. Check your state and local laws or consult a lawyer for guidance.
