The Importance of Tenant Screening
How to Choose the Best Tenants for Your Property
In today's era of rapid technological advancement, where convenience and deception often go hand-in-hand, safeguarding your investments has never been more critical. As a property management company, we understand that thorough applicant screening is the cornerstone of long-term success. Let's delve into some of our screening procedures and their pivotal role in shielding our clients from potential risks.
The Importance of Rigorous Screening
Having a rental property involves inherent risks, including the possibility of encountering individuals with malicious intent. From fake IDs and paystubs to falsified tax documents and bank statements, the spectrum of fraudulent practices is broad and ever evolving. Identifying these red flags early on is crucial to securing a strong, qualified, and reliable tenant for rental properties.
The best way to get better at spotting these fraudulent documents is through experience. At McKenna Property Mangement, our applications department screens upwards of 200+ applications every month! Drawing from this wealth of experience, we've developed a keen eye for spotting red flags within rental applications. Employing a multifaceted approach, we leave no stone unturned in our quest to prevent fraudulent tenants from being placed in our rental properties.
Key Screening Tools and Factors:
- Income Verification: Through our industry-leading property management software integration, applicants can link their bank accounts to verify their income. This software will promptly compile a detailed report on monthly deposits, verify their origins, and project annual income—all of this information is extracted securely from the applicant’s bank account. While this step remains optional for applicants, our team additionally requires three months of verified income. Through this experience, we've prevented a lot of applicants from being approved with fake paystubs and fraudulent bank statements.
- Credit Check: We conduct credit checks through the big three credit bureaus, providing us with a ton of valuable information. We meticulously verify that the names and addresses provided by the applicant align with the credit report, while also receiving alerts if the report has ever been associated with fraud. Delving deeper, we analyze various factors including collections, on-time payments, estimated monthly debt, and the length of credit history. Additionally, this comprehensive report includes landlord-reported data, revealing rental payment history, any instances of late payments, or outstanding debts. Furthermore, it sheds light on evictions and bankruptcies, enabling us to make informed decisions regarding prospective tenants.
- Rental History Verification: We request that the previous property manager of the applicant completes a questionnaire, providing valuable insights into their tenancy and financial responsibility. Additionally, we cross-reference homeownership status with tax records for landlords in Nevada, ensuring the legitimacy of rental verifications.
- Collaborative Partnerships: We collaborate with reputable third-party companies to verify the authenticity of financial documents, such as paystubs, tax records, and bank statements. By cross-referencing information, we ensure the legitimacy of all information provided by applicants.
- Expertise and Resources: Our team possesses a deep understanding of the intricacies of property management and the nuances of tenant screening. By leveraging our expertise, you gain access to comprehensive risk mitigation strategies tailored to your specific needs.
- Time and Resources: Conducting comprehensive tenant screenings requires significant time, resources, and specialized knowledge. Our swift turnaround time of 2-3 business days not only maintains applicant engagement, but also ensures that we don't lose potential tenants due to screening delays.
We are committed to deploying robust screening protocols and leveraging our expertise to protect our clients' investments. Our team has seen it all – fake IDs, fraudulent paystubs, bank statements and taxes, even fraudulent rental verifications. However, because of the tools, resources, and expertise we have, our clients don’t have to worry about one of these fraudulent applicants becoming tenants of their rental!
If you are looking to partner with a property manager to help remove the stress of trying to stay on top of all the fraudulent methods applicants use today, look no further! Let us help you place the best tenants in your property and protect your investment.
Helping Your Child Buy a Home: Smart Strategies with Tax Benefits Many parents want to help their children buy a home, but doing so in a way that also provides financial and tax advantages is key. Here are a few strategies to consider when assisting your son or daughter with homeownership while maximizing tax benefits. 1. Gifting Money for a Down Payment The IRS allows individuals to gift up to $18,000 per recipient annually ($36,000 for married couples) without triggering a gift tax. If you stay within this limit, your child receives a down payment boost without tax consequences. 2. Loaning Money to Your Child Instead of gifting, you can lend money at the IRS’s Applicable Federal Rate (AFR), which is often lower than traditional mortgage rates. Structuring it as a formal loan allows your child to build equity while you may receive interest income. 3. Co-Signing or Co-Owning the Home Some parents choose to co-sign a mortgage or co-own the home. While this can help secure better loan terms, it also means shared financial responsibility. If you co-own, you may be able to deduct mortgage interest and property taxes on your tax return, depending on usage. 4. Buying the Home as an Investment Property If your child pays you rent, the home could be classified as an investment property. This allows you to deduct expenses like mortgage interest, property taxes, and maintenance. However, rental income must be reported to the IRS. Final Thoughts Every financial situation is unique, and tax laws change. Consulting with a tax professional or estate planner ensures that your support aligns with your financial goals and tax strategy. Helping your child buy a home is a generous step—doing it wisely ensures benefits for both of you.
When applying for one of our rental properties, we use a comprehensive screening score sheet to ensure all applicants are held to the same standard. The score sheet evaluates various aspects of your financial stability and rental history, helping the landlord make informed decisions while maintaining a fair and transparent process! Here’s a breakdown of how we assess your application utilizing the screening score sheet: 1. Length of Residency: While longer periods at previous residences typically suggest reliability and commitment, we understand that some applicants may be first-time renters. We welcome first-time renters, and on the screening score sheet, you can assign yourself a "1" under "Length of Residency" if this is your first rental experience! 2. Collections: We review any outstanding collections, including monthly utilities or bills, as well as loans (excluding medical bills). This helps us assess your overall financial responsibility. Your estimated monthly payment for all your loans, utilities and bills is also taken into consideration. 3. Rent-to-Income Ratio (per household): To ensure you can comfortably afford the rent, we require that your monthly income is at least 2.5 times the rent amount. This ratio helps us verify your ability to manage rent payments alongside other living expenses. 4. FICO Score: While there is no specific minimum FICO score, we do take it into account when evaluating your financial health. A higher score indicates a history of responsible credit management. 5. NSF/Late Payments & Landlord Disputes: We look into your rental history to ensure that there are no frequent NSF (non-sufficient funds) or late payments, and that there are no unresolved disputes with previous landlords. Please note that all application charges are non-refundable, and every occupant over the age of 18 must submit a separate application. Our scoring system ranges from 0 to 21, with 15 being the lowest acceptable score. All approvals or denials are ultimately decided by the property owner. We do not operate off a first come first serve basis, so if you are curious about the status of applications prior to applying, please don’t hesitate to call our office! By using our screening score sheet, we aim to create a rental environment where both tenants and property owners can thrive. This score sheet can be found on our site, under the Before You Apply Manual, as well as under “Rental Resources”.
Looking to declutter your home while making some extra cash? The outdoor swap meet at the Downtown Recreation Center in Henderson is the perfect opportunity! Whether you’re cleaning out your closets, clearing space in your garage, or finding a new home for gently used toys, books, and clothes, this event is your chance to turn those items into money. Each booth equals two parking spots, and registration is required at least one week in advance. All booths are assigned randomly, ensuring a fair and fun atmosphere for all. Remember, only second-hand items can be sold, so it’s a great way to recycle and give your items a second life. Event takes place April 19th & May 17th! The swap meet opens at 7am, so come early to shop! Admission is free for all ages, making it a perfect outing for families looking to find unique treasures. Ready to get started? Simply register on the City of Henderson website to secure your spot. It’s time to clean out, earn some extra cash, and find something new – don’t miss out on this exciting event at the Downtown Recreation Center!
