Forging through the uncertainty of commercial real estate is a rigorous task, especially when it comes to tenant screening. Ensuring that your property is well-occupied with quality tenants requires more than just good luck. So, how can you secure your investment and maximize returns?
Well, expertise and discernment are helpful, but an understanding of effective tenant screening practices is crucial. To help you, we'll unpack the concept of tenant screening, delve into the different types of tenants, and provide actionable insights into tenant screening best practices.
This article will be your guide to creating a thriving commercial property. It's a must-read for every commercial real estate enthusiast!
Why Tenant Screening Matters
Tenant screening is the process of evaluating potential tenants to determine their suitability and reliability as renters. By conducting a thorough screening, you can minimize the risks associated with leasing your commercial property to individuals who may not meet your requirements. Here are some of the best practices to use:
Start by crafting a compelling rental advertisement that attracts serious prospects. Be specific about your requirements and highlight the key features of your commercial property. This will help potential tenants to self-screen themselves based on your criteria before they even contact you.
Contact Previous Landlords
Reach out to past landlords to obtain references about the applicant's behavior, payment history, and overall rental experience. This will give you a glimpse into how they may behave in your property.
Request a Detailed Rental Application
Require prospective tenants to complete a detailed rental application. The application should gather important information such as employment history, rental history, references, and financial details. Ensure that the application form includes consent for credit and background checks.
Run Credit and Background Checks
Credit and background checks provide valuable insights into a potential tenant's financial stability and rental history. A good credit score and a clean rental history are positive indicators of a responsible tenant. When screening potential tenants, look for red flags.
Verify Employment and Income
Verify the employment and income details provided by the applicant. Confirm their job status and income level. Knowing their financial situation will give you an idea of whether they have a stable source of income to afford the rent.
Interview Potential Tenants
Before finalizing the selection process, consider conducting an in-person or virtual interview with potential renters. Doing so will allow you to assess their communication skills, professionalism, and compatibility with your property.
Get the Most Out of Your Commercial Property
Implementing effective tenant screening practices is imperative for finding quality tenants for your commercial property. If you need help along the way, we'll be there. At PMI Los Angeles, our goal is to help you take your investment to the next level. Our team will handle tenant management, financial accounting, and more.
We are part of a large franchise that has over 20 years of experience, so we have what it takes to help you see a return on your money. To inquire more, call 323-342-5479, or reach out to us on our website.