In Chicago, going through an eviction with a tenant can mean months of unpaid rent ... and that was pre-pandemic! Right now, it's almost impossible to get a tenant out for non-payment. So, what’s the best way to do an eviction? The answer is to make sure you don’t end up with tenants who will need to be evicted! So, how do you screen tenants to avoid issues in the future with rent payments?
1) Set up criteria: You have to balance a few things when coming up with the criteria to rent out your home.
- First is your renters' credit scores. If you are in an area where the average renter has a credit score of 500 trying to find a renter with a 700 credit score, that is a losing proposition. By doing so, you probably have narrowed your renter pool down to a level where you may go vacant for a few months. Can you afford that? On top of that, if you rent to someone who is qualified to buy the house next door, and pay less a month, odds are they won’t be staying for multiple years in your home.
- Second is income. I recommend three times the rent before tax (gross). This means they have enough income to pay for their food and clothing, car payments, and their rent. One thing to note: Due to Cook County's Fair Housing ordinances, a Section 8 voucher counts as income.
- Third is key disqualifications: If your tenant has a past of not paying rent (evictions) or not paying utilities, like gas and electric, then what's going to happen the next time they have an emergency and have to decide between the new PS5 and paying the electricity bill?
- Fourth is criminal: You need to follow your city's and county's rules when it comes to approving and denying applications based on criminal background.
- Fifth is good landlord reference: "Are they a problem tenant?" and "Do they pay on time?" are some great things to find out from past landlords!
2) Do not waiver: Not only is changing your criteria an issue with Fair Housing, but in the long run, it can often mean losing more money than you saved. You may think that you won’t be able to find someone for another week or two, and that two weeks of lost income may seem like a lot now. But compared to six months of no rent while you are trying to evict that tenant, all because you let them slide for a checkered past (but they seemed like a good person!), will make you feel sick to your stomach.
3) Screen the criteria:
- First is run a credit report: Don’t accept credit reports from sites like CreditKarma.com, or other free places, and don’t accept credit ran by another company that the tenant gives you. The free sites are not giving accurate scores, and the reports from other sources are too easy to manipulate and change.
- Second is verify their pay stubs! Make sure you can see how much they are going to make for the year and that you are not looking at a check with a one time overtime or bonus payment, and approving based on that. If you have any doubt on the paystub, call the employer and make sure they are employed there.
- Third is don’t just look at the score: READ the report and look for key disqualifications!
- Fourth is criminal: After you are ready to approve the tenant in Cook County, you can run criminal and make sure they are a good fit.
- Fifth is verifying tenancy: Look up the property they listed as their current home, and make sure the owner they gave is the current owner or management company. Call the number, ask your questions, and dig as much as they will let you. If you can go back to the landlord before their current landlord - even better! They have no reason to lie about how they were as tenants.
4. Get your money before you hand off the keys: Once you approve the tenant, make sure they pay for a full month's rent, any deposits or move in fees, before you give them keys.
5. Sit back and enjoy your rent checks as they come in, and of course take care of your rental property as if you were the one living there. You can expect to have a good tenant who will stay.