Tenant screening can make or break the success of your rental business. You want to choose a tenant that will observe reasonable care over your property. Someone who pays the rent on time and can live in harmony with their neighbors or other tenants.
But how do you find someone with these qualities? Our effective tenant screening guide will help you find the right tenants for your rental properties!
The Fair Housing Act
The first step is to familiarize yourself with the Fair Housing Act. Always make sure that while performing the tenant screening, you abide by the Fair Housing Laws. You cannot discriminate against someone on account of their religion, race, color, national origin, familial status, sex, and disability.
Through every stage of the screening process make sure that you aren’t asking discriminatory questions. If you have to reject someone’s rental application, your reason must be solid and based on the income, credit score, or rental background.
Make a Criteria List
Your objective is to have a list of qualities you look for in a prospective renter. When screening a possible tenant you should always:
- Ensure that they have a stable income and can afford to pay the rent
- Make sure they don’t have a criminal record
- Check their rental and credit history
Evaluate the applicants by matching them to the criteria list. This is a quick method to find out if the renter is considered high quality or a potential risk.
Having no criteria can leave entertaining a large pool of applicants which will take longer to discover if they’re the right fit or not. So list down the important factors you look for in a tenant so your screening process is more effective.
Initial Pre-Screening Test
The full screening process, while important can take a long time. It’s best to narrow your search by asking preliminary questions to gauge the interest and to spot warning signs. For example, if you don’t accept pets in your rental, you can ask if the tenant has a pet. Even simply asking about the move-in date is already helpful.
Pre-screening filters out the wrong matches for your rental space and saves you the time of conducting a full tenant screening and background check.
Create a Procedure to Review Applications
Going through the information on the rental application can help you identify worthy applicants quickly. Check that the application:
- Is complete and contains the contact information of the applicant
- Lists the address of the applicant’s present residence, including the contact information of the current landlord
- Includes details of past rental information with the landlords’ names and contact information
- Has the names of employers, salary and references, to assess if the applicant can afford to pay the rent per month
Finally, you’ll need the applicant’s consent and authorization to review their credit score status and perform other important background checks.
Verify the Tenants Income and Employment History
It’s important to carefully look into the tenant’s income and employment history. Find out if the information they provided on their application form is accurate and make sure that the references are real. To determine if the tenant’s perspective is telling the truth, you can get in touch with the employer to authenticate their employment status and any other information listed on their application.
Interview an Applicants Prior Landlords
Asking for various references and contacting them is critical. This allows you to get a sense of what a prospect will be like if you rent to them.
You want to identify potential red flags, like past lease violations. These can include causing property damages, consistently paying rent late, or failing to pay rent altogether. Aside from that, learning if an applicant was able to live amicably with other tenants and neighbors is also important.
Be wary however of possible untruths, it’s, unlikely but possible that someone might submit fake references and asking friends to act as a prior landlord. Be sure to learn more about the former landlord’s rental property to gauge the authenticity of the contact details.
Credit Reports and Background Checks
Be sure to look at a prospective renter’s credit score. If it’s lower than 680, that can be cause for concern. Be sure to also verify if they’ve ever faced eviction or if they have any outstanding debt. These can indicate that they won’t be able to make consistent rent payments.
It’s also recommended to look into someone’s criminal history. You want to ensure that a prospective tenant has not engaged in any dangerous criminal activity that might put others at risk.
Master Accepting or Denying Potential Tenants
When you complete all the stages of tenant screening and are satisfied that the information is factual, it’s time for your decision. If you accept the prospect, let them know the schedule for lease signing. On the other hand, if you have to reject a prospect, let them know through a written notice like an email or a letter.
Conclusion:
To ensure the success of your rental property and minimize your stress as a landlord it pays to put in the time and effort of performing thorough tenant screenings.
You’ll want to verify a prospect’s rental, employment, and criminal history and reach out to their reference to confirm all the information. Most importantly you want to ensure that you are abiding by the laws of the Fair House Act through every step of the screening process.
This may feel like a daunting task, that why you should consider hiring the services of a professional and trusted property management company like Home Choice Property Management. They’ll help you rent to qualified tenants while ensuring that the screening process follows the letter of the law.