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The Tenant Screening Primer

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You may not have problems finding tenants, but getting good ones can be tough. As a landlord or property manager, you’ll want to protect your investment and (for the really tough tenants) your sanity. One of the best ways to do that is to screen anyone interested in occupying your property. No matter what type of housing unit you have or manage, screening can help give you peace of mind that you’ll receive timely rent and that your property will be safe. Read on to learn more about tenant screening.  

Why A Landlord Should Screen Every Tenant

Keep Their Premises Safe

A tenant can damage your premises to the point that their security deposit may not cover the repair expenses. That’s why you need to make sure that the tenants you accept don’t pose a threat to your property. 

But how do you know that a tenant will keep your premises safe and free from damage for the time they will be there? Start by checking their rental history. If they have a damage history, you might not want to rent your property to them as they may damage it too. Their criminal record can also tell you more about what they are capable of. 

Ensure Other Tenants Are Safe

As you focus on your well-being when looking for tenants, you also need to consider the well-being of your other tenants. You need to make sure that every tenant is comfortable and that no one is threatening their safety. If a tenant feels unsafe, they will leave and look for other options, which is not good for you. 

By conducting comprehensive screening, you can avoid getting tenants who pose a risk to the safety of their neighbors. In addition to a thorough background check always follow up with references. Prior landlords may be able to provide information about a potential tenant that you wouldn’t have found otherwise.

Have A Lower Tenant Turnover Rate

Tenant turnover is one of the most unpleasant (and expensive!) things that landlords and property managers have to deal with. When a tenant leaves, you will have to start looking for another one, which may take time and cost you money. Additionally, you will have to prepare the house for the next tenant. If you find a new tenant in a timely manner, you will lose income on the vacant unit.

 Luckily, you can cut down on tenant turnover through screening. You need to look for hints on whether the prospective tenant is likely to stay longer on your premises or will leave soon. How long did they stay at their previous location? What about the one prior to that? It doesn’t guarantee a long tenancy, but it’s a good place to start.

Find The Right Tenants

As a landlord or property manager, one of the more frustrating and costly issues you may run into is a tenant that is constantly behind in rent. You shouldn’t have to track them down month after month for payment. The credit portion of a tenant screening can help provide some insight into the timeliness of a potential tenant’s payments. It can also provide information on income that can help you move past the applicants that might struggle to pay each month. 

What To Expect From Tenant Screening

When you haven’t screened a tenant before, you may be wondering what happens during the process. Read on to understand what happens during screening. 

Pre-screening

Before committing to the detailed screening process, you will need to pre-screen a tenant to see whether they are a good match. During pre-screening, ask questions like if a tenant has pets, if they have any background check issues they would like to disclose, and their estimated monthly income. If you are comfortable with the information they give you and feel like they can be prospective tenants, you can move forward to the main screening process. 

Collection Of Background Information

You need to collect the background information of a tenant. Here, you will be looking at the following things. 

Their Credit Score 

Checking a tenant’s credit score helps you determine whether they are financially responsible or not. You don’t want to evict tenants because they are not in a position to pay rent. 

While a good credit score does not always guarantee a stellar tenant, it’s a good starting point. However, if a tenant has a not-so-good credit score but has a valid reason that does not show financial irresponsibility, you might consider giving them a chance with a higher deposit to protect your property. 

Proof Of Income

Checking the proof of income of a tenant will help you determine if they are in a position to pay their rent or not. This can be obtained by requesting tax documents, pay stubs, or reaching out directly to the employer to confirm the information.

Employment History

Checking the employment history of prospective tenants is essential as it gives you information about their employment and income stability. Someone with a consistent job is more likely to have a consistent income and pay their rent without problems. 

Additionally, if a tenant changes jobs often, they are more likely to change their job soon and may have to move to another location. That leaves your property vacant and you’re back at square one trying to find a new tenant. 

Rental History

More often, previous actions predict future actions. If a tenant has a bad rental history, they become a riskier candidate. One of the best ways of knowing the rental history of a tenant is by calling their previous landlords. 

If the potential tenant doesn’t have a rental history – they may have owned their home or lived with a family member – you’ll need to lean more heavily on the other screening methods.

Criminal History

Checking the criminal history of a potential tenant helps you identify whether they were convicted of a crime. If they were, you will need to take that into consideration. Keep in mind that different states may have different limitations when it comes to using criminal history to approve or deny a rental applicant. Make sure to do your research and, if necessary, reach out to an attorney so that you don’t find yourself in trouble.  

Eviction Check

Conducting an eviction check helps you protect your investment from tenants that will need to be evicted in the future. The cost of eviction is very high and can go beyond $5,000. When looking into a potential tenant’s eviction history, a couple things to weigh are how long it’s been since the eviction and how many evictions they have on their record. You should also keep in mind that if the eviction was started by a landlord but wasn’t completed or if they are still in the process but it hasn’t been awarded by a judge yet, it may not show on the potential tenant’s records.

Whenever in doubt, you can always request reference letters from previous landlords to verify the details that may not be included in the report.

Information Analysis

After the detailed screening, you need to analyze the information you get to determine whether you will allow the applicant to let your house or not. 

The Legality of Tenant Screening

Tenant screening is legal, but you need to stay within the federal fair housing laws as well as any local laws that may put limitations on your screening process. Those laws can range from what you may use to make your final decision all the way to the amount you may charge for an application and tenant screening.

Red Flags to Watch Out for In the Screening

Some of the red flags you should watch out for when screening tenants include:

  • Low credit score
  • Endless complaints about your property even when they have not yet committed 
  • Previous evictions
  • Previous broken lease agreements
  • Lack of prior landlord references
  • Unverifiable income
  • A history of frequent move-outs
  • A history of changing jobs frequently
  • Not willing to disclose crucial information
  • Criminal records

Good Signs to Watch Out for In the Screening

Some of the good signs to watch out for when screening include:

  • A clean criminal records
  • No prior evictions
  • No frequent move-outs
  • Good credit score
  • Consistent employment

Additional Steps to Take If You’re Not Sure About a Potential Tenant

If you are still not sure that you want to lease your house to a particular tenant even after screening them, you can take other steps such as:

  • Researching more about them using social media
  • Asking for references from their previous landlords
  • Interviewing the tenant

Final Thoughts

Tenant screening is essential as it helps protect your investment. The process may seem daunting, but things will get easier when you know what you should do and have the necessary resources to conduct the screening. The effort is worth your time as it can save you money, stress, and time in the coming days. 

At LandlordStation, we make tenant screening easy for you. We offer different level of screenings so you can find the best fit for the price that works for you. Make tenant screening seamless and faster for your convenience. Contact us today to learn more. 

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