Finding the right residents for your rental properties is one of the most critical aspects of a successful real estate investing portfolio. Without renters, no one pays the rent. However, when bad renters move into your properties, you might wish you still had an empty rental rather than deal with residents who refuse to pay the rent anyway.
Utah rental property owners can (and should) apply a thorough tenant screening process for every applicant when it’s time to find a new resident—but how picky can you be? When you know what kind of renter you do want, it’s easier to avoid the renters you don’t want, right?
Not exactly: The renter selection process must follow fair housing laws to avoid discrimination claims. While it’s tempting to create very specific criteria (like choosing only women) to minimize the risk of a bad renter taking over your property, investors must follow the law. Here’s what you need to know from professional property management!
While this article isn’t meant as a substitute for legal advice, investors can keep these tips in mind during tenant placement. Consult your attorney and use this insight from the professionals at Reeder Asset Management!
Women Only? Not So Fast!
We get it: When it comes to the most responsible, clean, quiet, compliant renters, women would probably win that contest against men every time.
- You could have a rental history of excellent female residents who always paid the rent on time, kept your property spotless, and always called for help when something needed a repair.
- You might also have experience with terrible male renters that forgot to pay the rent, left your rental in terrible (and smelly) condition, and tried to fix everything on their own (without telling you).
Women are definitely great! However, real estate investors can’t discriminate against men who apply to live in your rental homes. Excluding all men as part of your standard criteria violates the law—and can lead to an expensive lawsuit or losing the ability to legally operate your properties.
Being Choosy Can’t Be Discriminatory
Rental property owners can be choosy when selecting a renter—but they can’t violate anti-discrimination laws. Protecting your investment property requires placing the best renters, so we don’t want to scare you away from a legal tenant screening process that helps you avoid the wrong applicants.
However, when developing your screening process and putting an applicant through it, avoid accepting or denying an applicant based on:
- National origin
- Sex (gender)
- Familial status
None of these factors can come into play when reviewing a potential renter’s history and choosing your next resident. Men and women must both have an equal opportunity to live in your home—but investors can still dig into an applicant’s background to help avoid bad residents and potential evictions.
What Criteria Is Legal?
Ensuring that discrimination isn’t part of your screening process still leaves plenty of room to develop legal criteria for finding your ideal residents—but what can you include? The best way to establish criteria that protect your properties is by working with professional property management services.
A property manager can help you determine the right criteria to keep your operations legal in Utah. This can include:
- Minimum income requirements
- Credit score requirements
- No bankruptcies or evictions
- No pets (or specific pet requirements for pet-friendly properties)
- Verified consistent employment
- Passing a criminal background check
- Positive past rental history and former rental owner references.
This type of criteria helps investors understand the quality of a potential renter without violating anti-discrimination laws or considerations. A thorough background screening can help highlight red flags that have nothing to do with race, gender, or other characteristics that can lead to a lawsuit if you use them to deny a potential renter.
Select a Property Manager to Choose Better Renters
Following the law when screening renters can be complicated and challenging. It’s critical to stay up-to-date on all local and federal anti-discrimination laws to protect your investments. However, fearing a screening mistake can make real estate investors nervous about the tenant screening process or choosing their residents.
Expert property management teams can handle the renter selection and screening process for you! Our screening process includes:
- Working with rental property owners to develop their criteria
- Executing a thorough background screening, including employment and income verification, credit history, criminal background, and prior rental history
- Choosing the best residents while following all applicable laws.
The right property manager makes the screening process a hassle-free aspect of protecting your rentals and growing your income with reliable renters every time—male or female.
Avoid ‘Ladies-Only’ Listings With Property Management
Give every applicant an equal opportunity to be your next excellent renter! The Reeder Asset Management team knows what renters want—and how to screen applicants to choose the best residents for your properties!
When it’s time to find new renters, let our expert full-service property management team handle it for you. Ready to learn more about the benefits of growing your portfolio with the care of expert property management services? Download your free copy of our guide to real estate investing!