With many potential tenants falsifying application forms, landlords need to get creative when screening tenants.
Ideally, an effective screening process can detect bad tenants before they sign the rental contract.
This guide helps landlords navigate all the necessary screening considerations and shows how to create lie-proof application forms and run background checks.
1. Be Proactive About Prescreening
At any given time, there could be hundreds, if not thousands of people looking for a new apartment or single-family home.
This constantly changing group consists of good and bad tenants alike. Fortunately, landlords can weed out most of the bad applicants before they even glance at a rental application, saving a great deal of time and money.
The first step in weeding through potential applicants is establishing standards and rules on the property advertisement.
At a basic level, these standards should include a minimum income requirement, pet policies, statements regarding previous evictions and criminal records, and any other policies the property managers may have.
By clearly stating these baselines, a majority of the bad applicants will look elsewhere.
When reaching out to potential applicants, landlords can easily gauge their character over the phone or in person.
Landlords should be sure to ask the right questions and always make property rules and standards clear whenever possible.
An ideal tenant should be financially secure, have a clean background, keep a tidy living space and have no eviction record.
These qualities, or a lack thereof, will make themselves apparent in the application process.
2. Create a Legally Airtight Tenant Application
The best tenant applications provide an accurate look into an applicant’s life and personality, asking all the right questions and avoiding the wrong ones.
At an absolute minimum, application forms should include the follow questions:
- Basic information (name, date of birth, Social Security number, phone number, address)
- Employment information and contacts (current and past employers, monthly salary)
- Previous and current rental information and contacts
- Eviction records (ask how many, not just if they’ve had an eviction)
- Release of information signature
Asking the applicants other questions, such as how many people intend on living at the property or if they have any pets, can help develop a better understanding of their situation and avoid future complications.
Some questions, however, are not allowed. According to Federal Fair Housing laws, these include any questions relating to race, sex, national origin, color, religion, familial status, and handicaps.
It is illegal to discriminate against any of these qualities and doing so can result in a hefty lawsuit.
Individual states may also have variants and extensions of these characteristics, such as age or sexual orientation.
3. Run Background and Credit Checks
Background and credit checks are among the most accurate ways to gauge the reliability and character of a potential applicant.
Thanks to a number of tools and services, running both checks is usually an easy and inexpensive process.
Background checks include information such as the applicant’s criminal record and eviction history.
Checking these figures not only helps landlords assess whether an applicant will avoid criminal activity and be a good tenant, but doing so is also a good way to check the applicant’s honesty.
If the information on a criminal record and an application form don’t match up, it should serve as a massive red flag.
Credit checks help assess whether the applicant can pay consistently and responsibly.
A credit report usually includes information such as the applicant’s credit score and public financial records.
4. Get Creative With Screening Methods
While application forms and background checks usually provide most of the necessary information, it doesn’t hurt to go a little further.
This may include calling previous and current landlords and employers, as well as taking a look at social media accounts to gauge personality.
5. Know How to Deal with Approvals and Rejections
Approving an applicant is relatively straightforward.
A landlord contacts the new tenant with a message of congratulations and a list of next steps.
Rejecting an applicant, however, isn’t always as easy as saying “no.”
Landlords should document the reasons for the rejection and make these clear in a dismissal letter, which helps avoid any potential legal trouble down the road.