Choosing the right tenants may be the most difficult task faced by a landlord or rental property owner.  The wrong tenants can lead to major headaches later on.  Working with a Michigan property management company may help to alleviate some of the stress and uncertainty of trying to establish the best and most fair criteria for selecting great tenants.

There is a delicate balance between choosing a tenant that you can be confident will pay the rent and violating Fair Housing Laws.  Both are extremely important.  It can help to start by making a list of possible criteria to use to evaluate applicants.  Using only your “gut” instinct is not the best way to go about this task.

When meeting with prospective tenants, you should be sure to inform them of how the tenant selection process works.  Including your criteria on your rental application is one way to make sure that all tenants receive the same information.  You should also include a statement that your criteria are based on compliance with fair housing laws.  Learn as much as you can about fair housing regulations, so that you can avoid any potential lawsuits because of discrimination.

Once you consider the fair housing laws, you can add additional criteria, factors that are concrete and measurable, to judge applicants.  Things like photo identification, credit scores, pay stubs to verify income, criminal backgrounds and pets are frequently used by landlords to decide on the best tenants for their property.

Tenants should, in general, have a 3:1 ratio for income to rent.  Self employed tenants should provide tax returns and bank statements to verify this, if no pay stubs are available.  Request credit and income information for all potential tenants that will be living on the property who are over  18 years of age.

Checking references is wise, though consider advice from current landlords carefully.  If a landlord is hoping that a bad tenant will move out, then they may not be honest about the quality of the tenant and give them a more glowing recommendation just to get rid of them.

If you are considering a tenant who has borderline credit or income, yet meets all other criteria, you can require a co-signer on the lease as a back up.

Many rental property owners will screen tenants themselves, others choose to use a Michigan property management company to do this work for them.  While there is a cost associated with hiring professionals, it will save tremendous time and hassle during the tenant selection process.