YourPropertyPath.com

Your Property Path	Home \| About \| Contact


	Resource Center


	Article Marketing


	Landlord Services


	Rental Specialist


	Managing The Property


	Financial Planning for Owners


	Current Market Conditions


	Real Estate Buyers and Sellers


	Home Improvement

Managing The Property : Issues and Insights

Email this article
Printer friendly page

Tenant Screening Software: Rules Based Model

If you are managing a larger rental property you can use tenant screening software and the huge data bases of other companies to create a set of business rules that will simply accept or reject in an objective manner.. Its even possible to use statistics and probabilities to compare two qualified renters and choose the set of patterns least likely to give you a rental problem.

There are basically two kinds of software that property managers are using to help lighten the load and keep the number of bad choices to an absolute minimum.

In the search for the best way for landlords and managers to find the best tenants in the fastest and most reliable manner, companies have devised software approaches to replace the one on one approach for best left for making friends wives and lovers. The software model discussed in part two does not allow the owner to choose the criteria, it goes to the public records to observe behavioral patterns of tenants and predicts the future behavior of a potential tenant.

Lets explore rules based software in part one of this series. This is the most interactive of the two approaches taken to offer the owner/manager a better way to find good tenants in an objective manner.

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 variables that are commonly used are often similar to the major criteria seen in a credit report, FICO scores use over one hundred criteria
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 isnt met only a guarantor 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 guarantee 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

The software will then judge the applicants according to the screening criteria in a dynamic way. It reduces the intuitive method and helps keep managers in compliance with Fair Housing which acquires objective decisions to help avoid discriminatory screening

REsourced from www.yourpropertypath.com

You may republish this article as long as you do not edit and you agree to preserve all links to the author and Your Property Path.com