In-Depth Tenant Screening – Why Is It So Important?

The vacant rental property and its consequences get so scary that most landlords pick the first application that comes through their door. Most of the time, they do not think how bad things can get if they dint screen their tenants and let the wrong ones in.

When landlords slack while screening, they can end up with the worst possible tenants such as, 

• Tenants not paying rent on time
• Tenants not paying rent at all
• Tenants breaking rules
• Tenants being extra loud, noisy and disrespectful
• Tenants causing property damage

Imagine, one simple mistake can lead up to this nightmare. The time and effort screening takes is nothing compared to the cost of these awful tenants. Bad tenants can cause you unpaid rent, expensive repairs, eviction costs as well as possible legal costs. So, tenant screening is an extremely important step that no landlord should miss.

By conducting an in-depth tenant screening for all the applications that come in, you can reduce the risk of ending up with a nightmarish tenant.

Tenant Screening:

So many people must be wondering what tenant screening is? Well, it’s the process of evaluating the applications of potential tenants. This is done so that you can pick the best tenants who pay rent on time, who aren’t noisy or loud, who always abide by the rules of the community and who aren’t into illegal activities. Screening doesn’t mean that you go through and analyze the information provided by the tenant, but you need to go beyond, track the references down, last jobs and a thorough background check is also required.

Although nothing is guaranteed, you can still end up with a bad tenant after all the screening, but you can decrease the chances by properly screening tenants.

Good tenants have the following traits:

• Consistent and full rental payments
• Abide by the rules
• No illegal activities on the premises
• Easy going and respectful people.
• Keeps the property clean and in good condition

The traits mentioned above make an ideal tenant, and here’s how you can find them.

Tenant Screening – What Does The Process Involves:

The Tenant Application:

The most tedious but also the most important step is going through the tenant applications. There are many forms available online; you can you those to make your own custom application. The form should include basic information like social security number, name, date of birth, etc. Apart from this, you should ask tenants other simple questions that will help you gain an idea of their personality. Apart from that, you will also need to ask several personal, financial, as well as employment information.

However, you need to be mindful of some questions that can’t ask your tenants as per the laws of fair housing laws, as these questions can get you in legal trouble. If you are looking for examples, here are a few questions that you can ask the potential tenants.

• Occupation information?
• Addictions like smoking or drinking?
• Pets, if yes; how many?
• Last tenancy details?
• Why this property?
• Date of moving in?
• How long are you planning to rent the property?
• How many family members do you have?
• References?

Once you have received all the tenant application, you need to sit back relax and go through them one by one. This step does take time, but it’s totally worth the effort. You will need to check and verify every bit of information provided by the tenant.

Credit History Check:

By going through the application, you will be able to narrow down a list of tenants; the next step is to run a credit check on them. A credit check helps to judge the financial stability of the tenant, and this is important because this will help you see whether he will be able to pay rent on time or not. For example, someone who is paying substantial loans might not be able to keep up with rent payments month after month.

Background Check:

Like credit check gives you financial analyses, a background check helps you see how the tenant is in his personal life. Here’s what your background check should have.

Criminal Record:

Whether or not your potential has a criminal record, it is very important. These records should include national, federal, state, as well as county criminal records. You can’t dismiss the tenant if they have a minor charge, that is discrimination, and legal action can be taken against you for this. However, severe charges, as well as how long did it occur are two points that can dismiss a tenant.

Prior Rental and Eviction Report:

What made your tenant leave the last property is a very important question, and you should skip it. Eviction is costly, nasty as well as time-consuming, so make sure you know your potential tenant and his history completely before signing them on. So, always get a full report of the tenant’s rental history and past evictions. The easiest way is to get the references and calling them up to have a quick chat.

Not only that, but you will also need to ask around to know if your potential tenant has ever been kicked out or evicted, and on what grounds. This will help you understand your tenant better and also foresee any issues that might arise in future.

Employment History:

Getting monthly income, as well as employment status, is a must before letting any tenant sign the lease. This enables the landlord to know whether the tenant will be able to pay rent on time or not. To get this idea, you will need to ask the tenant for copies of pay stubs, bank statements, as well as the employer’s contact details.

The Bottom Line

Tenant screening is no joke, and your rental property is your investment; you should treat it as such. Be mindful of the screening procedure to keep yourself from getting nasty surprises. If you don’t have enough time or experience regarding tenant screening, there are many screening services available as well; you can hire them to save time and effort.

If you’d like to talk more about property management, or you need help with Everest Property Management, please contact us at Everest Realty.

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