How I Underwrite Rental Applications to Mitigate High-Risk Tenants

As co-owner at my organization, I still have the final say on approving rental applicants. A troubled tenant can eat up your cash flow if they’re not paying and you have to evict and replace them. Leasing Agent I have an in-house leasing agent who handles collecting the paperwork and necessary documentation from rental applicants. Once all this is submitted, the agent starts the underwriting process. It is important that you have a clear picture of the prospect’s history to verify they are qualified to pay rent your properly. Our Criteria Criteria for screening tenants can vary depending on what class of property you’re in. For example, with a C class property, you may allow 600 credit score tenants, and with an A class require a minimum score of 700. Additional criteria include having no prior evictions within seven years of the date they’re applying for the home, having at least one year on the job (or proof of prior job stability), and having no felonies within the past five years. Stick to It It is always best to remain objective when underwriting rental applicants. If they do not make enough income or have been at their job only two months, then you simply have to move on.