Finding the right tenant is one of the most important jobs of a landlord. The reality is that having quality tenants is perhaps the most important factor for long-term profitability and, of course, it makes life as a landlord much easier. These tips for tenant screening can help finding a quality tenant that will not only ensure that your property is well taken care of and that rent is consistently paid on time, but it also will help to reduce vacancies and lead to a strong tenant-landlord relationship.
While it’s an important task, effectively screening tenants can be hard to do, especially for landlords with limited experience. Here are some tips to help guide you through the process and to enable you to effectively screen for quality tenants.
Set and Document Objective Criteria for Selecting Tenants
It’s often tempting for landlords to “go with their gut” when screening applicants or to simply trust that a friendly applicant will make a good tenant. Unfortunately, this can lead to surprises and unqualified tenants.
One of the best ways to avoid this common mistake is with objective, documented criteria for screening tenants. When you enter the screening process with these factors in place, it makes it easier to stick with the criteria and to ensure that you’re relying on the right factors when selecting tenants.
While the criteria will vary from landlord to landlord, some factors to consider including are a minimum income requirement and a minimum FICO score. You could also have a policy of rejecting applicants with certain amounts of credit card debt, a history of evictions or bankruptcies, or if they lie or withhold important information during the application process.
Check Applicants’ References
Your application should ask applicants for references. While you can ask for personal references, make sure that you ask for prior landlords and employers.
Checking with previous landlords will give you a sense of what type of tenant an applicant will be. When talking with other landlords, make sure that you ask specific questions to try to get as much information as possible. For example, did the applicant ever make a late payment, cause property damage, or get complaints from neighbors? Additionally, whenever possible contact the two previous landlords, as the current landlord might be willing to withhold some details in order to get rid of a bad tenant.
It’s also important to contact the applicant’s current employer. When you do so, don’t just confirm employment and income, but use this reference to get more information about the applicant. Oftentimes, good employees make good tenants, so take this opportunity to learn more about how the applicant performs at work.
Get Applicants’ Complete History
One of the most important tips for the tenant screening process is getting access to all necessary information in order to make an informed decision about applicants. This includes a credit report, background check, and rental history or eviction report.
A credit report is key because it will not only give a FICO score but will also give the landlord information about collection records, accounts past due, foreclosures, or bankruptcies. In contrast, the background check is essential to confirm employment history and criminal history.
Remember that when screening applicants, it’s important to run these reports on all adult applicants, and landlords should be wary of any applicants that try to avoid being the subject of these reports. While it might seem cumbersome to run multiple reports on all applicants, doing so is essential in order to adequately evaluate and screen tenants.
Use a Tenant Screening Service
Because gathering comprehensive information is the key to effective tenant screening, it’s a good idea to use a tenant screening service. It’s well worth the expense for landlords to use this type of service in order to easily and quickly get a complete picture of applicants.
If you do decide to use this type of service, make sure that you use one that will give you the applicant’s credit, and payment history without impacting their credit score. The service should also include a FICO score, credit reports, eviction history, and a nationwide background check.
These tips for tenant screening are some of the most important things that landlords can do. Because of this, it’s helpful to have established systems and procedures for how to select tenants. At ezLandlordForms, we can offer resources to guide you through the process as well as complete screening services. Contact our team to learn more or to get started.