How to Choose The Best Tenant For Your Rentals

How to Choose The Best Tenant For Your Rentals

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A person writing a check list for finding the right tenant.
Many landlords in Salt Lake City struggle to find the right tenants for their properties, but there are a lucky few who have multiple qualified applicants. While most property owners would agree this is a good thing, many of them don’t want to fall foul of the Fair Housing Act (FHA), which stipulates that one can’t give preference to a particular tenant because of race, religion, or other qualities. 

It can be tricky. When you have multiple qualified applicants, which one should you choose? And how do you stay compliant with the FHA (and other renters’ rights) in Utah?

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Choosing the right tenant from multiple qualified applicants

You might find yourself in a situation where you have multiple applicants for your rental property, and you don’t know which one to choose because:

  • More than one applicant has a good, stable income and can afford to live in your property.
  • More than one applicant can afford the security deposit
  • More than one applicant has a good credit score with no recent adverse credit history. 
  • More than one applicant has passed your identification checks and has the correct documentation (as required by law).

Create a qualification criteria

A person writing a check list for finding the right tenant.
So you have multiple applicants interested in your property? Congratulations! Now create a list of criteria and apply it equally to all your potential tenants. Your list of criteria might include:

  • A minimum credit score.
  • A minimum income requirement.
  • Proof of previously paid rent, a positive reference from a previous landlord, or both. 

Whatever you decide to include in your list of criteria, it’s important to apply your standards to all applicants. Equally important, you should keep your list in a safe place in case someone alleges you didn’t comply with the FHA. Penalties for FHA non-compliance are extremely expensive, ranging from a maximum of $16,000 for a first-time violation to a maximum of $65,000 for two or more violations within 7 years. 

“Under the FHA, the Department of Justice may bring lawsuits where there is reason to believe that a person or entity is engaged in a ‘pattern or practice’ of discrimination or where a denial of rights to a group of persons raises an issue of general public importance,” says the Department of Justice.

Delve a little deeper

A Landlord using a laptop to promote their rental properties.
If tenants are still equally qualified, delve a little deeper into their references and payment histories. It can be difficult to gauge references from previous landlords, but there are some definite red flags to look out for. When compiling references, discover the following information:

  • Whether prospective tenants received noise complaints from neighbors. 
  • Whether prospective tenants paid rent late (and how many payments were late). 
  • Whether prospective tenants maintained good relationships with landlords. 
  • Whether prospective tenants caused any property damage. 

You might also want to assess a prospective tenant’s background outside of their previous rental commitments. This might include searching for the prospective tenant on social media or Google. As this information is available to the public, you won’t have to ask the applicant for permission. 

It’s important to note that not every applicant will have a spotless record, so you will need to exercise your best judgment. Ultimately, you need to make sure someone pays rent on time and respects your property.

How to choose between tenants who all qualify for your rental property

Once you apply your list of criteria to all prospective tenants, one or more renters might not meet your pre-determined minimum qualifications. This now lowers the number of tenants you have to choose from. However, you could still have multiple candidates who exceed your qualifications. Again, you will need to steer clear of FHA non-compliance. 

There are several things you can do in this situation. Here are just some of the best deciders when choosing between tenant applicants: 

  • You might want to select the tenant that exceeds your requirements the most. This might be the person with the highest credit score, highest income, or best reference from a previous landlord. 
  • You might want to choose the first qualified tenant interested in your property. 
  • You might want to choose the qualified tenant who can move into your property the quickest. 
  • You might want to choose the first qualified tenant who contacted you about your property. Many landlords use the “first come, first served” basis when deciding between multiple qualified tenants. 

Whichever method you choose, you need to stay consistent. It’s a good idea to keep a written account of your reasoning for choosing a qualified tenant in case someone makes a complaint with the relevant housing authority in Utah. Finding the right tenant is tough, but you will want to document the process properly.

Tell all applicants about your qualification criteria and decisions

A blank piece of paper to make a list for choosing the right tenant.
Honesty is the best policy here, and you can stay on the right side of the law by informing all applicants about your qualification criteria. Send written notices to the applicants you didn’t select, and explain your reasons not choosing them. As long as you didn’t base the decision on the applicant’s race, religion, or another quality, you will comply with FHA legislation. 

If you didn’t choose a qualified applicant because of information contained in their credit report, you will need to inform the applicant about this as per the Fair Credit Reporting Act.

Final Word

The Fair Housing Act can be a complicated beast, and making a simple mistake could cost you thousands of dollars in non-compliance penalties. This is why it’s such a good idea to enlist the services of a qualified, reliable Utah property management company that takes care of all the legalities associated with tenant screening. As a result, you can find the best-qualified tenants without breaking the law.

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How COVID-19 Has Influenced Multi-Family Housing Trends in 2020

How COVID-19 Has Influenced Multi-Family Housing Trends in 2020

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The top multifamily housing trends in 2020 may surprise you. With the economy going the way it is, mortgage rates heading toward a record low, and millennials ready to buy, there is sure to be a change.

It’s no surprise that the COVID-19 pandemic has greatly influenced emerging trends in the housing market. Overall, we can say the virus has had a serious impact on the market as a whole. Many state governments are implementing laws meant to help tenants remain at home. The multifamily housing market has encountered many significant challenges due to the pandemic. Nevertheless, multifamily properties that are filled or vacant during this time can still be benefited by property managers to help seek tenant placement, perform everyday maintenance, and ensure tenant satisfaction. Here are some of the top multifamily housing trends in 2020.

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Reduced Demand

Until 2020, the multi-family housing market was experiencing a very large increase in demand. This was particularly from millennials who were beginning to settle down. But the outbreak of the COVID-19 has elicited mixed reactions from various actors in the housing market. Many multi-family firms have experienced challenges in getting construction supplies as more and more countries close their borders.

This decrease has made it hard to construct the estimated 328,000 houses needed to meet the housing demand. But this demand will decrease as more people file for unemployment. Lower incomes mean less demand as people will devote much of the resources to meeting essential needs. The multifamily outlook 2020 will be negatively affected by the coronavirus.

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Growing Investor Interest in Smaller Markets

Multifamily market analysis shows that the present challenges have increased investor interests in smaller markets. Particularly those not as severely affected by the pandemic. The reduced demand in major markets has forced investors to explore the available options in smaller markets. 

Housing markets in states without many rent regulations are also gaining more investor interest. This is because one of the multifamily housing trends is rising rents. But many states have instituted rent control regulations to protect tenants. For this reason, many investors are moving into markets that have fewer regulations. Such markets have a better multifamily outlook in 2020.

More Rent Control Legislation

The growing demand in the multi-family housing market has in the past led to rising housing prices. But this is set to change in 2020 as many states legislate rent control regulations. The regulations have also gained more traction due to the coronavirus pandemic. 

States such as Washington, Illinois, and New York all have rent control legislation that will come into force this year. Rent control regulations in New York caused a 9.2% drop in multi-family investment. This was from a multifamily market analysis. Los Angeles also experienced a 9.8% drop in investment year-over-year.

Multi-Family Will Continue to Perform Better in the Suburbs

The market performance of multi-family housing will continue to do better in the suburbs. This is because more and more families are relocating to the suburbs. Thus, investors will continue to build more houses in these areas, where they can attract more tenants and achieve better rental growth. Suburban areas especially those in smaller markets not severely affected by the coronavirus and will also continue to experience growth.

Entering Age of Digitalization

The role of technology will continue to feature more prominently in the multi-family housing market. Landlords are making their multi-family homes smart by installing Wi-Fi and even video conferencing equipment. This has become a necessity as many workers have to work from home due to the stay-at-home orders. 

Realtors are also adopting technology such as virtual reality. For instance, realtors are now using automated apartment tours through cell phones. One of the emerging multifamily housing trends is self-guided tours. These tours are convenient and help tenants have a better view of the house without interference from the realtor.

Multifamily Housing Trends Outlook

The multifamily housing trends in 2020 are being affected by the ongoing coronavirus pandemic. But the housing market is holding steady. There are still high occupancy levels and growing demand for multifamily houses in smaller markets. This demand is also shifting to states which have less rent control regulations. It is uncertain when things will return to normal. But the multifamily market analysis shows that the housing market is doing quite well giving the circumstances of the economy.

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