Tenant Screening Tips and Tricks

This week we wanted to continue to look at tenant screening and the entire rental process, for those of you who are property managers or for those of you caught in the downturn and find yourselves new property managers.
The screening process is one of the most important decisions you make when owning a rental property. Its important to understand the law and its important to find the best tenant for you. Following is an article that lives on our real estate web site that you may find helpful. But first a quick look at the markets.

Of the 52 cities tracked by the blog housing tracker all but two had rising inventories for the week. This info is pulled from the MLS and so we tend to accept its accuracy. Inventory is increasing in almost all cities with some of the Pacific Northwest and Bay Area escaping the big hit soo many of us are taking.

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Mortgage Rates Fall fo the Second Consecutive Week

Freddie Mac (NYSE:FRE) today released the results of its Primary Mortgage Market Survey® (PMMS®) in which the 30-year fixed-rate mortgage (FRM) averaged 6.67 percent with an average 0.4 point for the week ending June 28, 2007, down from last week when it averaged 6.69 percent. Last year at this time, the 30-year FRM averaged 6.78 percent.

The 15-year FRM this week averaged 6.34 percent with an average 0.4 point, down from last week when it averaged 6.37 percent. A year ago, the 15-year FRM averaged 6.43 percent.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 6.30 percent this week, with an average 0.5 point, down from last week when it averaged 6.31 percent. A year ago, the 5-year ARM averaged 6.39 percent.

Freddie Mac

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May Existing- Home Sales Show Market is Under Performing

Lawrence Yun, NAR senior economist, said the market softness is understandable. “I think psychological factors are currently the biggest drag on the housing market, in addition to a disruption from tighter credit for subprime borrowers,” he said. “Household formation has slowed dramatically since late 2006, implying that many people are doubling-up – they’re adding roommates or moving in with parents.

“The market is underperforming when you consider positive fundamentals such as the strength in job creation, economic growth, favorable mortgage interest rates and flat home prices. It appears some buyers are simply waiting for more signs of stability before they get serious about getting into the market.”

National Association of Realtor

Tenant Screening Tips and Tricks

Have potential tenant complete and sign a standard rental application to provide personal and employment information and authorize the landlord to obtain a credit report and background checks. Obtain the applicant credit report through a Credit Reporting and Tenant Screening Agency

Do a thorough background check. Do call prior landlords. They are your best, most honest source for information regarding on your prospective tenant. Present landlords, wanting to get rid of bad tenants may not be most objective source for you.

• Don't rush. The credit and background checks take only a few hours to complete.
• Pay special attention to Fair Housing Laws. Many prospective tenants do know the law. The internet is a wonderful source for both tenants and landlords. Know what you can say and be careful to stay within those guidelines
• Never discriminate based on race, color, national origin, religion, gender, family status or handicap or source of a person's income.
• Check with your state and local laws to make sure you are complying with all regulations.
• Tenant Associations and local rent boards are good sources for compliance questions. If dont have the time, you may want to look to professional property management.

You may and should consider the following when setting your criteria. More on this discussion can be found here.

Tenant Screening Insurance & Mortgages