When you partner with Xepco Properties for leasing and property management services in Palm Desert, we work very hard to keep you out of the tenant screening and placement process.
It’s for your own protection.
The screening process in California presents a lot of opportunities for error. Fair housing laws are strict and they must be followed. Remaining objective can be difficult, especially when you’re filling a tenancy in the property that you own.
Allowing us to do it for you not only protects you from liability, it also ensures you get the best, most qualified tenants renting your home.
Here are the best practices we follow when we’re screening for high quality tenants.
Establish Qualifying Criteria for Palm Desert Rentals
First, we create a set of qualifying rental criteria for all applicants. These are the standards against which every application is screened. It kicks off a fair, consistent, and well-documented screening process.
Qualifying rental criteria reflects what we are looking for in a tenant. We provide it to all of our potential applicants so they can decide for themselves whether they’re likely to pass our screening process. All applicants know what’s required in order to be approved for your property.
Written rental criteria is the best defense against any claims of discrimination or fair housing violations. It holds us accountable to our own process and keeps the way we screen applicants fair and consistent. There’s no room for unintentional discrimination or favoritism.
Palm Desert Tenants and Eviction History
We run a nationwide eviction check on any potential applicants. Past behavior can be a pretty good indicator of future behavior, and it’s important to be careful with prior evictions.
Not all evictions are created equal, of course. If you’re looking at an applicant who had an eviction 25 years ago but has spent the last two decades re-establishing a solid rental history, that tenant will probably work out fine. But, a tenant who has been evicted three times in the last seven years is a bit of a risk.
Check Credit Scores and Reports
Just about every landlord will run a basic credit check, and credit can be a touchy subject for people. Anyone who has struggled with debt or bill payments understands that credit suffers from time to time.
We understand it too, and we’re not looking for perfect credit, necessarily. But, we do know what credit red flags look like, and we’re eager to avoid tenants who have too many of those.
While evaluating an applicant’s credit, we understand that the type of debt is often more important than the amount of debt. People have historically struggled with student loans and medical debt payments, and that doesn’t mean they’re bad tenants. A $20,000 hospital bill that’s still outstanding does not need to disqualify an otherwise good tenant.
We’re really looking for financial responsibility. If there are debts owed to former landlords, management companies, or apartment buildings, we wonder why. We don’t like to see utility bills that are overdue or in collections. That often means that the tenant does not take their housing responsibilities seriously.
Some best practices will tell you to establish a minimum credit score for approval. That’s a good idea, but often it makes more sense to really dig into the credit report and get an idea of how the applicant handles their money.
Employment and Income Verifications
We are always screening for tenants who can afford to pay rent on time every month. Because this is the most important attribute we want in a tenant, we’ll have some pretty strict standards for income. We have to determine whether the applicants earn enough to pay what we are asking in rent.
Generally, property management best practices say to look for income that’s at least three times the monthly rent. That’s a comfortable place for income to fall.
With rental rates climbing, this is getting more and more difficult for tenants. It’s not always an easy benchmark to meet. If there are roommates moving in or two adults who earn income, we are more than happy to combine what’s earned to meet the necessary requirements that we’ve set. We consider the income earned by every adult in the household, and we ask for proof of that income by collecting pay stubs, tax forms, or bank statements.
A word about Section 8 tenants.
Recent California law requires that all landlords and property managers consider qualified Section 8 tenants for their rental properties. These tenants can use their housing vouchers and other state benefits to count towards income.
Previously, you could say no to Section 8 tenants. Fair housing laws don’t allow for that anymore. Make sure you’re not breaking the law by denying Section 8 tenants without cause.
Rental History Verifications
Verifying rental history is an important part of the screening process, and we talk to current and former landlords.
The application our prospective tenants complete will request contact information for at least two landlords the tenant has rented from previously. These references can tell us a lot about what it was like to rent to the tenant we may be considering. Typically, our reference check includes sending them an email or making a phone call.
Here’s a look at what we tend to ask:
- Was rent paid on time every month? How quickly was the rent paid in the event that it was late?
- Was there any property damage during the lease term?
- Was proper notice given before they moved?
- Did the tenant have pets?
- Did the tenant receive a full security deposit refund?
- Would you rent to this tenant again?
Tenants who have not had good experiences in rental properties will not be very forthcoming when it comes to landlord references. They may try to give us the phone number of a friend or family member. Luckily, we have the resources to conduct a little research and ensure we’re actually talking to former landlords or property managers.
These are just some of the best practices we employ while screening tenants. If you’d like to talk about finding a great resident for your Palm Desert rental property, please contact us at Xepco Properties. We’d love to help.