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Property Management – Choosing Tenant Screening Software – Part One

In the search for the best way for landlords and managers to find the best tenants in the quickest and most reliable manner, companies have devised two basic software models.

If you are managing property and have more than a few units, property management software is the best thing for you. There are packages that are designed for small property owners and not too expensive. The point of software is its ability to keep great records and can even prompt you. The days of ledger books or running your business out of a shoe box are gone – too complicated and too many law suits and besides, once you learn it it will save time.

There are basically two types of software that most managers use. Rules based software in part one of this series. This is the most interactive of the two approaches offering the owner/manager a better way to find good tenants remaining objective and therefore less likely to run into fair hosuing problems.

Rules Based Software: It is an interactive approach requiring the owner/manager to set the criteria they want to use to screen potentials. Each applicant must pass these criteria. The owner chooses certain criteria that are important and sets ovjective business rules. Any applicant that doesn’t fulfill these lines in the sand is automatically declined. No thinking, stressing, no undecided moments. Simple.

Some of the criteria that you should consider for your screen are:

Rent to Income

Many property management companies will use before tax income equal to three times the rent. If that isn’t met only a guarrantor of the tenancy cures the problem. – no excuses and no exceptions will keep your court costs down and your piece of mind intact

Debt to Income

We like to see debt levels no greater than one third of income. This ratio helps you determine whether they have the after expense ability to pay the rent. If not, then maybe you have a less expensive unit for rent or you can ask for a friend or relative with assets and income to guarrantee the lease

Late Payments

We dont like to see any late pays. A few occasional 30 day late pays but never 90 days. If they are tears ago, we may discount it. Sometimes school days or a divorce can be a low point, but they would have to show a few years of good financial history for us to consider

Insufficient funds or bounced checks

None unless they were a few years back and only once or twice

Evictions

Never, not one

Part two of this series will look at another software model for establishing objective criteria to tenant screening

Thanks for Reading

Howard Bell for yourpropertypath.com


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