Vacancies are an unavoidable part of rental property management in Atlanta. Smart investors put aside a portion of their rental income each month to cover turnover costs like rekeying, cleaning, and advertising their vacancy. However, even with careful planning and budgeting your rental could start losing money if you have an extended vacancy, which is why it makes sense to try and fill a vacancy as quickly as possible. But, before you fill your vacancy, it is important to know the ins and outs of tenant selection. Poor tenant selection can actually lead to more serious issues down the road including rent delays, property damage, high turnover, evictions, and legal problems. How do you balance finding the right tenants with filling your vacancy quickly? With over 35 years of experience, Specialized Property Management Atlanta is here to help. Read our seven tips for finding more reliable tenants below.
Step 1: Gather Applications
After a prospective tenant decides they want to rent your property they must fill out a rental application. A standard rental application includes important information that helps rental property management in Atlanta decide whether or not the tenant is a good fit for your property. We recommend every tenant over 18 fill out an application, regardless of whether or not the lease will be in their name. As you will see below we take into consideration a wide variety of factors beyond income when approving applications. By gathering applications from every individual over 18, you reduce risks such as high turnover and legal issues.
Step 2: Verify Income and Employment
It goes without saying that your new tenant should be employed and that their salary should cover their rent. However, there are different opinions on how much rent an individual can afford. We recommend prospective tenants have a combined income of at least 3x the rent rate. That means if you charge $1,500 per month, your tenants should make at least $4,500 after taxes. Why do we recommend this? Your tenant should not feel burdened by their rent payments or forced to decide between paying their rent and paying other bills. A combined income of at least 3x the rent rate gives your tenant a needed cushion in their finances and lowers your risk as well.
Thorough rental property management in Atlanta also means verifying income and employment, not just taking your tenant’s word for it. Before moving your tenant to the next step of the application process call their employer to verify employment dates and current income.
Step 3: Credit Check
A good credit score is an indicator that a prospective tenant pays their bills on time and doesn’t have an overwhelming amount of debt. However, a tenant with poor credit isn’t always a bad choice. Oftentimes individuals with poor credit who want to buy their own home decide to rent while building their credit and saving for a down payment. For these individuals, it is crucial to make payments on time and never miss a payment. Other prospective tenants may be young and do not have enough credit history for a high score. Property owners should not discount a prospective tenant with a low credit score without first looking into why that number is low.
How does professional rental property management in Atlanta sift through applicants with low credit scores? The first step is to verify employment and income. After that, take a look at the reasons your applicant’s credit score is low. Did they miss a rent or utility payment? Do they have a high debt to income ratio? Do they have a recent bankruptcy, foreclosure, or eviction? For past late payments request a written explanation from your prospective tenant. We recommend avoiding applicants with prior evictions and judgments as these situations represent a higher risk.
Step 4: Verify Rental History
Where did your prospective tenant live before applying for your rental? On the rental application, each tenant must include their past two years of rental history. Addresses, phone numbers, and landlord or property manager’s names should be included. As part of your due diligence, you must contact each residence to confirm the tenant lived there. When speaking with the landlord or rental property management in Atlanta about their previous tenant, ask questions like: did they pay their rent on time? Did they leave the property in good condition? Were they easy to communicate with? Did they break any of the terms of the lease?
If the tenant did break the lease, pay rent late, or leave the rental a disaster try to get more information about the situation. Most of the time these situations mean the tenant wasn’t great, but there could be more to the story that the landlord can fill you in on. Verifying a tenant’s rental history will oftentimes give you a better picture of whether or not they were a good tenant than a credit check can do alone.
Step 5: Background Check
We recommend submitting every applicant over 18 to a background check and screening out any applicants that may bring additional liability. Consider denying applicants with the following history:
- Drug-related charges
- Violent offenses
- Sexual offenders
These behaviors can bring about extra risk and liability. For more information about background checks talk to your rental property management in Atlanta.
Step 6: Reference Check
Your applicant should be able to provide several character references on their application. Oftentimes we see applicants list close friends or family members in this section. However, in order to get a better picture of the applicant, we recommend asking them to provide alternate references such as colleagues and employers. Taking this extra step is one more way you can reduce risk when choosing a new tenant.
Step 7: Comply With All Housing Laws
Federal, state, and local housing laws ensure both tenants and landlords are protected from unethical practices. However, with so many laws that pertain to housing, it can be difficult to keep them all straight. If you don’t devote significant time and energy to learning about all the laws that pertain to your specific area you could face steep fines that put your investment at risk. If you own multiple properties across the Atlanta metro area each property may have different HOA bylaws and local ordinances that apply to them. Staying on top of these laws while you move through the various steps listed above is challenging.
In addition, COVID-19 has placed new and rapidly changing restrictions on local businesses. For both compliance and safety rental property management in Atlanta must be up to date with these restrictions. Fortunately for our clients, Specialized Property Management Atlanta is dedicated to staying on top of COVID-19 restrictions, while maintaining our unparalleled customer service.
Google reviewer Glory T. recently reported their experience working with our team during COVID-19,
“It was a great experience working with Arleth, Jarrod and Stephanie. During COVID-19 restrictions, they were responsive and answered my questions timely. Moving has its own level of stress so it’s great when working with a team that recognizes in advance what is needed and are proactive. AWESOME team!!”
Staying in compliance with the law at every level will protect your investment and ensure that you maintain a good reputation in the property management industry. Our team of experts is dedicated to staying up to date with the ever-changing landscape of housing regulations. For a more in-depth look at housing laws that affect Atlanta rental property owners visit our blog.
Why You Need Expert Rental Property Management In Atlanta
As you can see, property management is complicated. Making the wrong decision puts your investment at risk and opens you up to liability. Though it may be tempting to choose the first tenant who submits an application, that isn’t always the best choice. When you’re looking for the right tenant to occupy your property you cannot rush the process.
Specialized Property Management Atlanta has the experts you need to find the right applicants, comply with housing laws, and protect your investment. With over 35 years of experience, we know how to move your applicants through the pre-leasing process efficiently, reducing vacancy days and ensuring you have a high-quality tenant in place.
In a recent Google review of our rental property management in Atlanta property, owner Silis J. said,
“Our rental property stayed on the market for only three days before we had a signed lease. SPM of Atlanta did a magnificent job. We are very pleased with the service we’re getting. I believe that our property is in good hands, and would not hesitate recommending them.”
Finding reliable tenants is just one of the many factors in running a successful rental property. Throughout the rental cycle you must work quickly and efficiently to communicate with your tenants, keep your property well maintained, and stay on top of housing regulations. That’s why smart homeowners choose to work with the experienced property managers at Specialized Property Management Atlanta. When you’re ready to leave the hassle of self-management behind, contact our office for a professional rental management quote. Simply call 404-596-8429 to get started.