After employing effective marketing practices, you should have leads coming in for your available rental properties. The next step for landlords is to turn their attention to screening tenants. No matter how great potential residents seem, you still need to conduct a proper evaluation.
The Screening Process: How to Screen Prospective Renters
Tenant screening is a procedure you need to undertake to ensure that the candidate fits your criteria. You need to decide on your minimum criteria before conducting a screening. Think about what you expect from your renters. To identify the good prospects, check these factors:
- Can the tenant afford the rent and have a stable job?
- Do they have a clean credit and criminal history?
- Do they have a good rental history?
Establish a Resident Select Criteria
Make sure to have very detailed resident selection criteria in place to facilitate the tenant screening process. This ensures that before people come to look at the properties you’ve listed, they know whether or not they meet the baseline selection criteria. The value of doing so is that it can provide you with cues for future issues. This can save you time and effort down the line.
Reviewing a Rental Application
Landlords want to make sure bias doesn’t enter into their decision-making. For a more in-depth and fair assessment, you must create a rental application form that provides you with the following information:
- Contact information of the candidate
- Current candidate’s residential address
- Authorization for credit and background checking
- The current landlord’s name and contact info
- Former residential rental history with the landlords’ names and contact info
- Current and former employers
- Salary, job title, and period of employment
Learning how much a candidate earns is crucial since you can deduce if they can meet the monthly rent requirements. A common rule of thumb is for renters to make at least triple the rental fee but this is not required.
You must also ensure that this entire process is aligned with the Fair Housing laws. To do this, it’s best to apply an identical application and review process for all applicants. Consider hiring a trusted property management company with reliable screening software to handle this on your behalf.
Verifying a Tenant’s Income and Employment
You should verify the employment of a prospective renter to ensure that the income figure they shared is accurate. Some may falsify their data to get accepted as a renter. In some cases, candidates may even involve their family and friends in deception by requesting them to pose as former landlords.
As such, make sure that the information from their references should match what they’ve indicated on their application. This can also be done through a property management company’s automated screening software.
Connecting with Former Landlords
Although it will take a bit of time, you can connect with the former and present landlord of the potential tenants. The aim is to get a well-rounded image of the candidate. Note that the current landlord may not tell the whole truth if they hope to remove the renter from their rental unit. This is why it’s important to also speak with previous residential landlords.
You will want to find out if a tenant candidate contributed to property damage, caused neighborhood disturbance, or was delinquent in paying the monthly rent before deciding to accept them in your rental unit.
Evaluating Tenant Credit Reports and Background Checks
Credit and background checking focus on a tenant’s:
- Complete account history
- Prior evictions history
- Credit rating
- Relevant criminal history
Learning the credit details of your rental candidates will reveal how financially responsible they are. That said, there are no hard and fast rules in assessing credit so landlords must be prudent and use their judgment. Be on the lookout for outstanding debt and eviction records, rather than focusing solely on the credit score itself.
Accepting or Denying Potential Renters
After performing the steps above, you need to decide whether to approve or reject the candidate’s application.
When turning down an application for renting your unit, it’s vital to document it in writing or via email. You need this to support your decision to decline the prospective renter’s application. It might feel harsh to deny an application, especially for new landlords but it’s best to do it directly. You won’t be required to list down the reasons behind your decision to turn down a renter unless a renter specifically requested it.
If you accept a tenant, contact them by calling or sending an email. Within the first few days, have then sign a preliminary agreement and have then come in with certified funds as an earnest deposit so secure their interest in the property. If this is done, let them know what the next procedure will be, which is typically lease signing and conducting a move-in inspection.
Make sure to study the Fair Housing laws to ensure that at no point during the screening process did you discriminate against renters based on protected classes. As long as an application is accepted or rejected based on the prospect’s rental history, credit score or background check results you shouldn’t have anything to worry about.
Bottom Line
While a tenant screening procedure can be a little time-consuming, it can lead to many benefits. Good tenants provide a consistent passive income and protect your rental property, which ultimately helps you maximize your return on investment.
If you are a property investor who wants to focus more on other opportunities that lead to the growth of your property portfolio, you can engage the full suite of property management services of Mark Brower Properties. We can deploy successful advertising campaigns and provide time-tested solutions that effectively find, screen, rent to, and retain high-quality residents. Contact us today to learn more!
