Thanks for following my 2 part series on Tenant Qualification. You can find part 1, steps 1 -5 here.
In part one of my series we discussed steps 1-5. A tenant applicant should take care in completing the application, have a thorough business plan, provide supporting documentation, have a team of trusted advisers and have the cash to start and maintain the business. Here are steps 6-10.
Tenant Qualification Checklist 6-10
6. Good Credit
A clean credit history is important, but not the end of the world if it is not up to par. Having a foreclosure or short sale resulting from our last recession or falling behind on medical bills is one thing. But, being repeatedly late on installment payments to consumer credit cards, auto loans, cell phone bills and cable bills may be difficult to overcome. By the way, I usually check both personal and corporate history.
Having a tenant representation broker and an attorney, representing you in the transaction, shows you have the commitment of qualified advisers. I have my own vetting process in accepting new clients I represent as a tenant prospect. Having your own representation is important for your best interest. It is also a good idea to have your legal counsel review all contracts especially a lease if you are not qualified to do so. A tenant without this arsenal of support is suspect to me. Nobody can know it all and do it well.
Asking a lot of questions shows you are serious. When touring a property and meeting with brokers and property owners asking the right questions shows you have done your homework and want to be sure you are covering all your bases.
Be decisive and consistent in your needs. Wavering during the research process when searching for properties or non-negotiable terms of a lease like budget and time frame shows you have uncertainty. It is important to know what your physical building needs are such as size, utilities, exposure, zoning, traffic patterns, level of tenant improvements you can absorb. Additionally, you need to know your budget, time frame and territory for your potential location.
Be prepared. Once a location is found most of the above information needs to be ready to submit to the landlord’s broker. You do not want to be constructing marketing brochures, websites, financial reports and resumes while you are working on your lease application. A location found could have several prospects interested. You not only need to be timely in submitting your offer and information, but having competition means you better kick-up your application package and be sure there are no holes. Remember, you could have a “yes” answer from the landlord the next day with a lease in hand to sign. You need to be able to write the check and sign the lease expediently so not to lose the opportunity.
With these 10 steps in the forefront of your mind, both property owners and tenants have a good idea of what to expect in the tenant vetting process.
Do you have any suggestions for future topics? Feel free to leave them in the comment section below.
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