The Importance of a Tenant Screening Policy
The art of renting to the right tenant is a very important part of being a landlord. If you rent your property to the wrong tenant, you could end up with a lot of problems. You could have a tenant who doesn’t pay their rent on time, someone who causes issues for your other tenants, or even someone who damages your property.
In order to avoid these problems, you should take the time to carefully screen potential tenants and to have an established tenant screening policy in place.
Some of the steps that we’ll cover when screening potential tenants are:
- Check their credit history
- Talk to their previous landlords
- Check their references
- Do a background check
If you follow these tips, as well as a few others that we’ll discuss shortly, you will increase the chances of finding a good tenant for your property and reduce your risk of finding the wrong tenant.
What is Tenant Screening?
Tenant screening is a process that landlords use to find out information about potential tenants. This process helps landlords to find out whether potential tenants are likely to pay their rent on time and take good care of the property.
There are several things that landlords can do to screen potential tenants.
- Checking credit reports: Credit reports contain information about a person's credit history, including how much debt they have and whether they pay their bills on time.
- Checking criminal records: Criminal records contain information about a person's criminal history, including whether they have been convicted of any crimes.
- Checking employment records: Employment records contain information about a person's employment history, including whether they have been fired from any jobs.
- Checking rental history: Rental history contains information about a person's rental history, including whether they have ever been evicted from a property.
Overall, tenant screening is an important part of the process of renting a property. It helps landlords to find out about potential tenants and decide whether or not to rent their property to them.
Related: How Much Does Landlord Insurance Cost: The 2022 Ultimate Guide
Save Time and Money by Automating the Tenant Screening Process
Tenant screening can be a time-consuming process. It can also be expensive if you hire a professional to do it for you. It can also be difficult to do it yourself if you do not have the right tools. However, there are ways that you can automate the tenant screening process so that it is easier and cheaper for you.
The first step in automating the tenant screening process is to create a list of questions that you want to ask your potential tenants. The answers to those questions will allow you to pre-screen applicants.
The second step in automating the tenant screening process is to use screening software that’s fully integrated into your rental application process.
TenantCloud’s built-in screening functionality allows you to list an available rental and customize the application - including asking your own questions.
From there, the applicant can apply online.
Instantaneous results allow you to make a decision in minutes with all of the information you need right at your fingertips. In just a few clicks, you can approve, decline, or even ask the applicant for more information if necessary.
Related: TenantCloud Property Management Software Online Solution: How to Use Landlord Forms
The Role of Credit, Employment, Rental, Income, and Criminal History
There are several ways that you can save time and money when screening tenants.
- Use a tenant screening service: You can use a tenant screening service to do the work for you. These services will do a credit check on the potential tenant and also run a criminal background check on them.
- Run a credit check: You can run a credit check on the potential tenant yourself. This will tell you if they have ever missed payments on bills or if they have been arrested for any crimes.
- Run a criminal background check: You can run a criminal background check on the potential tenant yourself. This will tell you if they have ever been arrested for any crimes.
- Ask for references: You can ask for references from previous landlords, employers, and personal contacts of the potential tenant. This will tell you if they are reliable and responsible.
- Ask for proof of income: You can ask for proof of income from the potential tenant. This will tell you how much money they earn and whether or not they can afford to pay rent.
- Ask for proof of identity: You can ask for proof of identity from the potential tenant. This will help to ensure that they are who they say they are and that they have not used someone else's identity to apply for the rental property.
At the end of the day – it's less important to “save money” in the screening process than it is to make sure you do a proper tenant screening and find the right tenant. If you find the wrong tenant, it can end up costing you far more than a proper screening will ever cost.
Related: How to Sign a Lease Online: TenantCloud Property Management Solutions
Red Flags You Should Never Ignore
The first step in the rental application process is to decide whether or not to accept the applicant. Here are some red flags that you should never ignore when screening a potential tenant:
- The applicant has a bad credit history.
- The applicant has a criminal record.
- The applicant has a history of not paying their rent on time.
- The applicant is unemployed or underemployed.
- The applicant has a history of causing problems in their previous rental properties.
- The applicant has a history of not paying their utility bills.
Overall, there are several reasons why you might want to decline an applicant. It is important to be fair and consistent in your decision-making process.
If you decline an applicant for one reason, chances are, you should probably decline all applicants for the same reason. The Fair Housing Act is applicable to the vast majority of property managers and landlords in the US.
This is not intended to be an all-in-one guide on how to conduct an effective credit and rental application screening process. It is meant to bring awareness to certain aspects of good decision-making and reflect on a few factors that can help you make that decision.
As always, it is important to remember that there is no single method for screening applicants for a rental property. It is a blend of many different factors. You must evaluate each case individually and decide how to make decisions based on the circumstances as permitted by law.