We’ve all heard stories about tenant-landlord disputes. Landlords need to conduct a tenant screening process on prospective tenants to determine whether they’re the right fit. When done properly, an effective screening will help landlords reduce the risk of having a problematic eviction.
In this guide, you will learn all about the tenant screening process for you to attract responsible, long-term tenants.
Without ado, here’s how to conduct a tenant screening for your rental property.
1. Request the prospective tenant to fill out a rental application form
Begin the tenant screening by requesting that prospective tenants fill out an application form. There are many sources to get application forms.
One way is to use one of the application forms available online through On-Site or Tenant-Data. Another way is by creating your own personalized rental form to know if the applicant fits your criteria. See a sample here.
If you decide to create your own, make sure to include everything you need to know about the applicant. For example, it should include:
- Employment history
- Applicant’s rental history
- Income
- Credit score
That notwithstanding, certain states prohibit landlords from discriminating against renters with certain criminal convictions. Since there’s no nationwide database of criminal records, it is best to hire a reputable tenant screening company.
2. Follow the Federal Fair Housing Act
A landlord’s desire to find the right tenants doesn’t exempt them from adhering to the Fair Housing Act. You should follow these rules to avoid the risk of being accused of discrimination under fair housing laws. You must not discriminate against a prospective renter based on these criteria:
- Religion
- National origin
- Sex
- Disability
- Familial Status
In addition, landlords should also comply with fair housing laws in your state when they verify tenents.
3. Run a Credit Check
Most states allow landlords to charge the applicant the cost of running a credit check. Even if your state doesn’t, it’s still a good idea to verify a tenant’s credit. You can use the Equifax Identity Report for a credit report of the tenant.
You should consider checking the current debt and credit score when reviewing the credit report. The current debt shows if the tenant has unpaid balances, carried hefty loans, or maxed out all credit cards.
The credit check process looks for a history of credit score, bankruptcy, income, and late payments. A look into this can give landlords an idea of whether the tenants can afford the monthly rent and the security deposit.
4. Perform a background check
A background check helps a landlord see if pre-existing problems are lurking beneath the surface. With a background check, you can peep into your prospective tenant’s rental history. The results may reveal important things such as a history of prior convictions, damaging property, or skipping rent.
Typically, you only need their social security number to run the background check. Companies that provide such tenant screening services include Screening-Works and Star-Point. When using any of these companies, make sure to request tenant screening reports on their:
- Public Records
- Criminal Records
- Evictions
5. Ask for details of previous landlords
This will help you verify if the tenant had any issues with the previous landlord. Dig a little deeper to get a real sense of the applicant. Often, the only thing that a present landlord asks from a former landlord is whether the tenant had an unpaid rent and if they were aware that they were moving.
Some basic questions that landlords can ask when screening tenants include:
- Would you rent out a property to this tenant again in the future?
- Has the tenant caused damages to the rental property?
- Did the tenant have rent payment issues?
- Did neighbors ever complain of disruption from the tenant?
- How did they keep their apartment? Were they clean?
- What reason did they give for moving?
6. Contact the Employer
Before allowing the prospective applicant to sign a lease agreement, verification of income is key. You can do this by asking the interested renter to give you a recent copy of their pay stub. You can also make direct contact with the employer to learn more about the tenant’s income.
While some employers won’t give out salary details, they’ll tell you whether or not the tenant is an employee.
7. Choose a consistent tenant
Landlords should scrutinize applicants’ prior addresses and employment history available on their application form.
Do they switch jobs or move locations often? Do they pay rent on time and provide the security deposit promptly? If their employment seems inconsistent, that might be a warning sign for you. If they move often, the pattern may likely continue even in the future, potentially leading to eviction.
8. Make a decision
Review the applicants carefully before renting out your rental unit. If they meet all of your criteria, it’s time to sign a lease or rental agreement. It goes without saying that you should have a quality residential lease.
You’d be surprised at how many people would just sign it without even reading its contents.
Conclusion
Tenant screening is one of the most important components of the rental process. Therefore, it shouldn’t be ignored or rushed when you rent out your property. You can save tons of money and hassle by reviewing potential applicants carefully. Another method is to hire a professional tenant screening service to go through the pool of applicants.
With the help of an experienced property management company, you can increase your chances of picking top-notch tenants for your rental properties as well as decrease your workload.
We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.
