Charlotte Property Management Weekly: The Top 3 Reasons Why Good Property Managers Matter More Now (Reason #2)

2. Tenant selection is getting harder

I remember when we first starting offering property management services, there was a large property management company in Charlotte that had very simple tenant screening criteria:


1. Their income must be 4X rent at minimum

2. They must have good landlord history

3. They have 600+ credit scores


I thought, “Wow! They must have some pretty good tenants if they keep those standards. If they can deliver a tenant within a reasonable time frame, it would definitely be worth using them!”


Now, flash-forward to today. If they are using these criteria to find tenants, good luck! People that pass these criteria are usually called “buyers”, not “renters”. There are certainly some renters of this caliber, but they are becoming a smaller percentage of the rental tenant pool by the day. I imagine this company had to lower their standards so the majority of their rental inventory didn’t sit vacant.


Should they have lowered their standards? What? Wouldn’t that make their eviction and non-payment rate skyrocket?


Not necessarily. Traditionally, this could be considered a “lowering” of standards; however, in today’s market, I would argue that it is understanding, collecting, and interpreting tenant data better. Tenant selection has become more of an art and less of a science.


And this makes it much harder! For example:

A. Does a bankruptcy, eviction or foreclosure mean an automatic application rejection?

B. What ratio of income to rent is appropriate? Does this change for each individual?

C. How much should job history be considered? Should we be looking at it on a company or industry basis?

D. If both tenants work for the same company (and both incomes are necessary for them to be eligible for the home), should the risk model change?


For the past few years (and continuing now), credit scores, housing, and employment have been on the rocks for many consumers. Does this make them all bad renters? How do you tell?


You hire a good property manager and let them worry about it! In today’s uncertain environment, they are much more important today than ever!


Brett Furniss is the President & Owner of BDF Realty (“Charlotte’s Most Innovative Property Management & Investment Company”), and Rent-To-Sell Realty (“When You Need a New Solution to Sell Your Home”) which specialize in rent-to-own (lease options) and rent-to-sell homes. For a FREE look into his new book, A Real Estate Agent’s Complete Guide to Representing Rent-To-Own (Lease Option) Tenants: Delight Clients, Fill Vacant Homes, and Earn $2,250 Upfront* (*Minimum!) go to www.RentToOwnAgentGuide.com.