Whether you’re leasing out commercial retail space or residential properties to tenants, you need to set criteria when screening them. In Missouri, guidelines for these are set in the Landlord-Tenant Law.
For Missouri landlords, here are 8 important qualifying standards for your tenant checklist:
- The right number of tenants per unit
Only assign a practical number of people to a unit. Unless local laws say so, a good rule of thumb would be to assign two people to each unit. So if you have a two-bedroom unit, make sure that only up to four people can stay there.
- Valid IDs
It’s only fair that you want to be sure that they’re who they say they are, so only rent out to people who have valid IDs. But not just any ID would be ok. Ask for at least one government-issued ID with their photo, date of birth, and current address on it like a driver’s license or a passport.
- Sufficient income
Make sure that your tenants are earning enough to pay for rent and other regular dues. Set a minimum required income level that will apply to all tenants. This should be a rate that will not cause difficulty in making payments. For example, if you have a rental worth $2,000 a month, you can set a tenant income level that is at least twice that ($4,000) to be safe.
- Proof of income
Prospective tenants can write anything on their rental application, so make sure to verify the information they provide. One way to do this is to request for documents proving their source of income. These include:
- W2 forms
- Bank statements
- Paystubs from the last two to three months
- IRS forms 4506 and 4506-T
Running a credit check on all prospective tenants is another useful way to know their current financial status. This allows you to see things such as their credit score, how much debt they have, and even if they have ever been evicted. Note that you have to get a written letter of consent from the prospective tenants to run a credit check on them.
For prospective tenants who aren’t self-employed, ask for their employer’s contact details. You’ll want to confirm that they do, in fact, work where they say they do.
Upon getting the employer’s contact details, send them a written notice about their employee wanting to live in your rental. Here, you can ask questions such as:
- Does X work there?
- How long have they been working there?
- How much is their salary?
- Is their salary anticipated to change within the next year?
Security deposits are based on monthly rent amounts. How much you charge depends on you but make sure to check for any limits set by state laws. In Missouri, for example, the Landlord-Tenant Law states that you can’t charge more than two months’ worth of rent.
You don’t want to have a tenant who has a bad reputation with the law. They could put the safety of other tenants in question and could even use your property for their nefarious activities. So do a background check to make sure they have a clean record and won’t cause anyone problems.
With the Cardinal Realty Group, it’s just a matter of time before you find the right commercial retail space to lease out in St. Louis. Give them a call at 636.225.0385 or send them an email at Hal(at)CardinalRealtyGroup(dotted)com to get started.