Qualifying a prospective tenant in today's market

Tim Francis Realty has been leasing properties for over eight years for our clients. I am very proud to report that we've never had to evict anyone. While I can't rule that out for the future, I am certainly working to keep it at zero!

First steps to deciding on a rental applicant is to ask for a rental application that allows us to run their credit report, criminal report, employment verification as well as check references. I typically start with the credit report. The first thing I like to see is a stronger credit rating. Ratings vary from 350 to 850. I've only seen from the 500's to the low 800's. The average credit rating in America is approximately 638. So, ideally, I like to see that or higher. Surprisingly, I have seen a lot of 700's since I work exclusively in the executive leasing market in Sandy Springs and the Buckhead area. What I love about this, is I've yet to get a home back from a person in the 700's that wasn't returned in the same or BETTER shape than we gave the house to them.

We have unfortunately had to turn folks down because of a low score alone. It's not as simple as a score, one of the other factors, is where is the credit heading? I had a recent applicant that was the lowest score I had seen, and they were about to be foreclosed, that seems like a bad risk to me. Other times, applicants got in trouble earlier in life with their credit, but were now responsible and almost every account was a ONE, meaning the bills are paid on time. This is not always easy to tell, but at least gives a snapshot of the responsibility level the applicant has demonstrated so far.

The next aspect we review is criminal history. What I don't want to see is anything past a speeding ticket or college DUI. The newest GAR (Georgia Association of Realtor) Rental Applications come out and ask if you are registered or require registering as a Sex Offender. That would obviously be a deal breaker.

Next, do they have a way to pay for the property with their income? In some cases, it's not just income, but alimony or other payouts that provide an appropriate income level to sustain living and paying for the rental property.

Lastly, we check references, previous landlords or personal references to make sure the candidate is a good match for us. To us it is more important to have a good tenant or no tenant. As one client recently told his wife, you know Michelle doesn't make any money if we don't get a tenant, but she is still advising us to turn this applicant down! To me an empty house is better than a home with a bad tenant. It makes for much happier owners and property managers!