Updated September 29, 2022.
The economy is not at its best point right now, and there is a lot of uncertainty, which makes having a vacant Seattle investment property more anxiety-inducing than usual. While it might seem like a good idea to hand a lease and keys over to the first person to apply, this is not the case—now, or ever.
Renter screening is always a critical part of the resident selection process. This step protects you from more than evictions, but also lawsuits when unfair leasing practices are uncovered. Take it from the experts in property management in Seattle: you do not want to skip the screening process.
To keep you and your rental properties safe during uncertain times, working with a full-service property management company to lease your Seattle investment property can provide the peace of mind you need. If you're not ready to take that step quite yet, here is a comprehensive list of renter screening best practices to keep your real estate investing endeavors on solid ground.
Please note: This article is not a substitute for legal advice. For up-to-date information and guidance, reach out to your attorney or expert property management in Seattle!
There are several reasons for this, but they all boil down to protecting your investment. Times are uncertain, and it is understandable if you've started reacting to things rather than taking a proactive approach. However, placing a renter just to have one can create more issues than you might have by waiting for a qualified resident.
Also, you must follow resident screening laws. Rushing to place a renter can make it easy to make mistakes that will cost you big time down the road.
One of Seattle's renter screening ordinances is the "first-in-time ordinance," which boils down to letting renters know exactly what your screening criteria are and then accepting the first renter to meet them. This means it is especially important to track application dates and times and then process applications in that order when selecting the first qualified applicant.
With that in mind, what should you look for during your screening process?
As a rental property owner, you'll want to know that your renter can afford to live in your property. This is for your benefit as well as the benefit of the renter. No matter how appealing your property might be, if the renter doesn't earn at least two to three times the monthly rent, it might be a struggle for them to make ends meet.
A renter should have a year or more at their current position because it shows the stability of that employment. Many employers have probationary periods, and a new job can be a turbulent time. If a renter doesn't have this history established, they could run into a tough time making the rent. If the rest of their employment history looks stable, you might consider them with a guarantor (as long as this is your rule for everyone).
Credit history is used by lenders everywhere for a reason: it is a relatively reliable predictor of the likeliness a person will pay their debts. Be sure to look at the indicators that speak to paying one's bills. Student loans and medical debts are a hot issue in our country right now, looking beyond those debts to whether a renter pays their credit cards, utilities, and car payment is a better indicator of whether the renter will be a good resident.
Again, you have to be very careful with local laws and ordinances. You cannot screen for criminal history other than the sex offender registry within Seattle. Cities outside of Seattle do allow it. While this may be true at the time of this writing, laws like this change rapidly in Seattle, so it is important to always stay up to date every time you list a property. It is always best to work with an attorney or property management in Seattle before you start screening to ensure you're on the right page.
This list is based on the criteria we use when screening residents to ensure that we are placing people who can afford the property and will pay the rent for the investors we serve. We know most rental property owners are not big-time real estate investors, but regular people who found themselves with a property that wouldn't sell or are just starting out, and receiving the rent is crucial for you to continue to make your payments.
This is why we take resident screening so seriously here at Real Property Associates. We want to look out for both our residents and our rental property owners to provide the best level of service to both! If you need help screening residents and managing your Seattle rental property, give us a call. We'll be happy to answer your questions about how we will care for your asset and your renters.
If collecting the rent is causing you stress right now, download our Collecting Rent in a Crisis Handbook before you ever rush to place a renter. It outlines a popular and compassionate approach the property management community is using during this time of financial uncertainty. We want our readers to benefit from our knowledge and expertise as property management in Seattle, whether or not you're a Real Property Associates client.