Being a landlord in Kansas City, MO, can be a lucrative career choice. ZipRecruiter.com says that, as of Dec 29, 2024, the typical landlord in the City of Fountains earns an annual average of $85,170. The top 4% even generate over $147 grand!
Remember, though, that your income as a Kansas City landlord will still depend on the quality of your tenants. If they can't afford rent or don't pay rent on time, you won't get paid, either.
Therefore, you must familiarize yourself with the best practices for tenant screening. The property management experts at Grit Property Group have shared insights in this landlord-tenant guide to help you get started, so read on.
Criminal Background Checks
According to The Whitehouse, about 70 million Americans have a criminal record. The most straightforward way to learn whether your rental applicants do as well is to run a criminal background check on each of them. Be sure to ask for their consent before conducting background checks during the tenant application process.
If the checks reveal applicants with criminal convictions, don't automatically reject them. You should still consider the crime they have committed. Then, assess if it will adversely affect their qualifications and ability to be a good renter.
Credit Evaluations
Comprehensive credit checks for tenants should include determining their credit score, but it shouldn't be the only thing you look for. You must also consider their debt-to-income (DTI) ratio.
Knowing your applicants' DTI ratio can help you learn how much of their income goes toward paying their current debts. You can then use the figures to assess whether they have enough left to cover their housing costs (i.e., the rent fees you charge).
According to Investopedia, a favorable DTI ratio is 35% or lower. It indicates a consumer's debt is still manageable.
Rental History Verification
Rental history verification, another crucial type of tenant background check, allows you to learn more about who and how your rental applicants are as tenants. The process involves calling the previous landlords your applicants have provided as references. They can give insights into your applicants' histories as tenants, making this step crucial to long-term property management and risk mitigation.
For example, previous landlords can tell you whether the people applying for your rental have always paid on time. They can also share details about the tenants' behaviors (for example, if they were good neighbors) and if they followed the lease. They can also tell you whether they're good "fur parents," which is necessary if you plan to let pets in your rental.
Don't Skip Any of These Tenant Screening Practices
Credit evaluations, criminal background checks, and rental history verification are three of the most crucial tenant screening steps you must conduct to find quality tenants for your Kansas City, MO, rental properties. You can minimize risks to your income, property, other tenants, and neighbors by performing all these steps.
Grit Property Group can help. We're a full-service company comprised of professionals with many years of combined experience in real estate and property management. With our tailored solutions and residential guarantees, you can count on us to help you find high-quality, long-term tenants.
Speak with us today for a free rental analysis!
