As a property manager or landlord, it’s important to screen potential tenants carefully to ensure that renting to them will be beneficial for both parties. Here are some best practices that we currently employ to screen a potential tenant:
1. Enforce an application process
Having a formalized application process for potential tenants can help you collect all the relevant information you need to make an informed decision. The application should include basic information about the tenant, as well as authorization to conduct a credit and background check. This is particularly useful when you have multiple applications and need to compare more than one candidate at a time.
2. Set clear rental criteria
Establishing clear rental criteria that you can consistently apply to all potential tenants can help you avoid any allegations of discrimination or bias. Your criteria should be based on objective factors such as income, credit score, rental history, and employment history that the tenant can show proof of. By following these best practices, you can find a tenant who is a good fit for your property and reduces the risk of any potential issues during their lease.
3. Conduct a background check
A thorough background check can give you insight into a potential tenant’s criminal history, credit score, income, employment history, and rental history. You can outsource this task to a reputable screening company, or use online tools to conduct a background check. Taking this one step further you should look for any potential misinformation within the report to ensure the applicant is who they claim to be.
4. Check references
Contact the potential tenants’ previous landlords and ask about their experience with the tenants, such as their payment history, any damage to the property, or their overall behavior. It is important that you verify a landlord owns the residence in question and that you have documented proof of the prospective tenant residing there. You can also ask for character references from acquaintances and colleagues to get a well-rounded view of the tenant.
5. Verify Income
Reach out to the prospective tenants employer to confirm the information provided on the application such as job title, length of employment and current salary. Review the applicant’s bank statements to validate deposits and withdrawals that can help to verify salary amounts. Consider leveraging third party verification services that specialize in income verification, which can provide additional insights and help speed up the verification process. It is important to approach the verification process thoroughly and with care to ensure that the information provided is accurate and reflects a true representation of the applicant’s income.
6. Interview the prospective tenant
Before you sign a lease with a potential tenant, it can be helpful to conduct a brief interview to clarify the details of the application and their desires for the home. Refrain from asking questions related to race, color, religion, national origin, sex, familial status, or disability as these could be perceived as discriminatory. A phone call with the prospective tenant can provide invaluable information that may not be discerned from paper alone for example,
What experience do they have in renting or owning a home and what did they like or dislike? From this you can gain insight on what to expect from them in the way of maintenance or care for the property.
Why are they leaving their current residence? Maybe they had issues with the prior landlord which could suggest they are problematic tenants.
What are their long term plans for residency moving forward? It is possible they are new to the area or they plan on buying a home in the near future. If this occurred they may not be settled in the area of your home. This could result in potential lost income or increased turnover costs for the landlord in the near future.
In summary, as a professional property manager or landlord it is imperative that you fully understand who is renting your home. The screening process is your primary line of defense against poor tenants and lost rents. Once possession of the home has transferred to a poor tenant it is too late to make adjustments. Implementing best practices such as the ones listed above will help to minimize the potential for tenant default, a long and protracted eviction process, and costly vacancy periods.