If you’re a rental property owner, you know that tenant screening is an important part of the rental management process. A thorough tenant screening process allows you to determine whether any potential tenants are responsible, reliable and financially fit for the unit. But what if you’re not sure how to go about it? Or what if you’ve been screening tenants using the same process for years, and it’s no longer working? In this blog post, we’ll discuss steps for setting up a tenant screening process that works for your property. So whether you’re just starting in the rental business or looking to improve your current screening process, here are the steps you need to take.
Determine Your Minimum Requirements
Before you even begin to look for tenants, decide what your minimum requirements are for a prospective tenant. Some standard requirements include a credit score, rental history, income, employment, eviction history, and references. Once you have established your minimum requirements, use this information to create a standard application form and any other necessary documents.
Create an Application Form
A well-crafted rental application is the first step to finding the right tenants. It should be clear and concise and include all rules and expectations tenants must adhere to. This includes any restrictions on pets, smoking, or criminal background checks. To ensure that all tenants understand the process of being accepted into the rental property, it is important to make sure that potential tenants are informed about each step of the screening process.
If you’re looking to add a rental application form to your website, below are some important questions to consider adding.
- Basic questions: Name, Date of Birth, Address, Phone Number, Email Address
- Financial Questions: Monthly Income, Rental History, Employment Status
- Background Check Questions: Criminal Background Check, Eviction History
- Identification Questions: Driver’s License, Passport
- Social Security Number References: Previous Landlord, Current Employer, Personal Reference
Background and Credit Checks
When it comes to tenant screening, landlords should take precautions to ensure they select only those applicants with responsible credit and sound criminal backgrounds. To obtain the most reliable information, a landlord should always utilize one of the three major credit bureaus or obtain a FICO score. They should also pay attention to factors such as debt-to-income ratios and the number of credit cards and types of cards held by an applicant, as well as keep an eye out for delinquencies or immature credit histories.
In addition to credit checks, landlords should also run criminal background checks on prospective tenants at the state and federal levels. This will help ensure that the tenant has no prior criminal convictions that could potentially be a risk to the landlord or other tenants.
While this may seem intimidating, it is important for a safe and secure rental property environment. Using a property management company can make researching potential tenants easier while expediting the process and boosting the odds of selecting a qualified renter.
Follow Up With References
Once you’ve received the information from a prospective tenant’s application, follow up with their references. Ask questions about their rental history, whether they paid on time and if there were any issues that arose while they rented from them. This is an important step in verifying the accuracy of all information provided and can help you make an informed decision about the tenant.
Double Check Employment and Income:
Make sure to ask for a copy of their most recent pay stub or tax return to confirm the amount they are reporting is accurate. Also, landlords should verify employment through direct contact with their employer and any previous employers, if applicable.
Face-to-face interviews are a great way to better understand potential tenants. During the interview, ask questions that can help you gauge the tenant’s reliability and interest in renting your property. Pay attention to their enthusiasm level, and ensure that you take detailed notes.
Questions should focus on topics such as the tenant’s financial stability, rental history, employment status, and other relevant information to help you decide whether they are a good fit for your property. You can also use the interview to explain any rules and regulations about the property.
When asking questions, avoid topics that could be considered discriminatory. You should not ask about the tenant’s ethnicity, race, gender identity, religious beliefs, or disabilities. Additionally, avoid questions that target familial status, such as whether they have children or plan to have children in the future.
Finally, give tenants a chance to ask any questions and provide them with a copy of the rental agreement so they can review it before signing. By taking the time to properly interview tenants, you’ll be able to make sure that you are renting to reliable and qualified individuals who will respect your property.
Make a Decision
Once you have gathered all of the tenant screening information, it is important to make an informed decision based on the data. You should have a set of criteria in place to objectively choose the best candidate for your property. Even if the applicant appears to be ideal, avoid making emotional decisions and instead focus on verifying that all of their income, employment history, credit score, and criminal background fall within your criteria.
If any of these factors don’t meet the necessary standards, it is best to decline them from renting your property. Make sure you comply with all laws regarding adverse actions and provide proper notification if tenants are declined due to their credit report or other related factors. This will ensure that you make a smart decision for your investment and protect you from any legal issues.
By following these steps, you can ensure that you are selecting the best tenants for your property. Reviewing applications and conducting proper tenant screenings will help landlords avoid problems and increase their chances of finding quality renters who will pay rent on time and take care of the property.
If you want a professional rental property manager to plan your tenant screening process, look no further than Ray Covington Property Management Company. We are dedicated to providing you with helpful and reliable services that will help you make the best decisions for your rental property. Contact us today to get started with a free consultation.