“Conduct A Successful Resident Screening”
Are you a new rental property manager who’s trying to figure out the right strategy in running a resident screening?
You should be careful in selecting tenants. Make sure that the tenants you select for your property are those that are capable of paying monthly rent and have shown a track record of taking care of rental property.
Being new to this business, you might be having doubts about doing the correct process of resident screening. That’s why you need to be strategic when conducting a resident screening.
In this article, I will share you some tips that you might be missing when running a resident screening process.
Do The Right Resident Screening Process
When searching through rental applications to determine the best applicant to rent your property to you must first decide what the best resident screening process you would like to follow. Depending on your experience and knowledge as a property manager the tenant screening process could vary greatly.
Property managers in general undertake a resident screening to determine whether an applicant’s rental application should be rejected or approved.
The most common areas looked at during the tenant screening process are history relating to credit, employment, past living and criminal histories of the tenant.
The information you will gather when conducting a resident screening will give you enough information about your applicants to make an educated assessment as to who you would like to rent your property to.
When a property manager has properly conducted a resident screening, the possibility of choosing bad tenants is minimized. Often times, due to an overwhelming amount of applicants and little time to evaluate them, a property manager could neglect to do some processes during a resident screening. This is a common problem and can account for how they can miss some valuable information which could give them a hint that the applicant could be a bad tenant.
Here are tips to be successful in running a resident screening on your applicants.
The tenant screening process begins the moment you meet the applicant wanting to rent your property. Whether it is a phone, in-person inquiry it is important to start the pre-screening process by asking questions about the tenant’s past and making notes that can be used if they decide to submit an application for rental.
Before You Start
Before you start conducting a resident screening, make sure that the applicant is really interested in renting your property. When the applicants wants to see the property or asks questions regarding the specific rental then it’s most likely that they are interested in renting the property.
When starting the tenant screening process there are several steps in the pre-screening process should be followed to avoid having hiccups during the actual screening process.
Start Informing Early
First of all, inform the prospective tenant about the basic qualifications, terms, and policies for renting your property. Try asking some questions that are related to your policies or tell them your restrictions for pets or smoking inside the property. Make notes of their answers as getting to know them and having a simple background about them can be useful.
Once they are already informed and agreed to your terms and policies, ask them to fill your rental application form so you can start the complete tenant screening process.
The Application Form
Your rental application form should get the basic information about the tenant. Here are the following items that should be included in your application form:
- Name, birthdate, address, social security number of anyone who
will be on the lease
- Applicant’s job history and current employment
- Applicant’s current income
- Names and phone numbers of 3 or more references, preferably past
Your rental application form should ask for information you need to evaluate the applicant for rental of your property. When they provide you all the identifying information about them this is important because this will allow you to proceed to next process of resident screening.
Conduct Background And Credit Check
The next step on the resident screening could include conducting a background and credit check on the prospective tenant. If running a credit check is required for rental then you have to inform the prospective tenant of this requirement and get them to provide a signed authorization allowing you to proceed with a credit check. Written consent between you and the applicant is required because a lot of confidential information about them will be disclosed in this process.
Background check – a lot of agencies offer background checks and most of them are can be found on the internet. The services usually cost between $25 to $50 per person. A background check will give you information about the applicant’s criminal records, rental, and eviction history.
Credit check – conducting a credit check on an applying tenant will give you an idea about their financial status. To keep your business running, you need to ensure that you are choosing residents who are capable of paying monthly bills. Running a credit check on your applicants will give you information about the credit history of that applicant. You will gain an idea about the financial condition of that person and whether they are capable of paying monthly rental fees.
Only use tenant screening services offered by trusted and registered agencies. It is common for background check companies to offer credit reports from the major credit bureaus to supplement their background check reports.
Property managers are allowed in most States to charge the applicants for the tenant screening services. To charge the prospective tenant it is best to receive payment up-front prior to processing the application to avoid any non payment issues due to being eliminated from renting your property.
Most background screening companies will offer a employment verification report. During the resident screening process, it is the responsibility of the property manager to verify the information that the applicant indicated on their rental application is truthful and complete.
What To Check For
Important information that you should check about your future resident is information and history regarding their past and present employment. Information regarding all past and present employment is easily obtained from employment verification reports that are run by background check companies.
However if you chose to verify employment of applicants on your own then this process could take a large amount of time and efforts to locate past employers and conduct interviews regarding behaviors of tenant at their past jobs. You can do this by calling the employer indicated in the rental application form.
Start asking the employer if the applicant is truly one of their employees. You can also ask about the type of job they are doing for the company and the amount of their salary.
When you complete the employment verification process you should have some confidence that an applicant has a good paying and stable job and can be a good paying renter once you accepted them to rent the property. Knowing that an applicant has a stable job and reasonable income, you will have less to worry about them not having enough to pay monthly rent when it’s time to collect them.
You must be careful when contacting past and present employers provided by your rental applicant. If you are contacting the employer directly never rely on phone numbers provided by applicants. If the applicant is trying to make their income or present employment better than it really is, you could fall victim to a sly applicants who put the contact number of their friends to pretend as their employer.
Most companies are now providing their contact information on the Internet. It would be better to search for the contact information of the company where your applicant works and use that contact number in contacting the employer of your applicant.
Interview The Tenant
Now that you already have the applicant’s background and credit report, then it’s time to
make your decision. Your decision to rent to the applicant is dependent on everything you have acquired in knowing the tenant. Background checks and reports are important but probably the most important part of the rental decision making process is the personal interviews you have with the prospective tenant. Just like accepting new employees for hire, your interview with the
possible tenant will largely affect your decision.
Document, Document, and Document…
It is highly recommended that you take notes on every conversation you have with prospective tenants. You can have a long conversation with the possible tenant and perhaps show them the property. While talking to them, consider asking these following questions to help you better know if the tenant will be responsible and the best qualified to rent the property.
o Why does the tenant want to move?
o How long does the tenant plan to stay in the rental unit?
o Why did the tenant leave his/her previous residences? How is the tenant’s relationship with his/her previous landlords?
o How many people will live in the rental unit?
o Does the tenant have pets? How big is/are the pets? How many pets does the tenant have?
o Does the tenant smoke or do drugs?
Ask about any red flags that you found in the application process.
The following are some examples of red flags:
o If you asked for at least three references but the tenant only provided two references in the rental application
o If the tenant left some of the fields in the rental application with a blank answer
o If tenants answers on the rental application do not match or unable to be verified by background check reports
Weigh The Answers
Their answers to these questions can heavily affect your decision to rent the property to them. If they answer positively and honestly verifying the information you are looking for in a qualified tenant,, then the applicant is eligible to be your tenant.
However, if tenant answers are incomplete or not verifiable then further interviews and screening is needed if the applicant answers negatively and fails to meet your expectation. You can also reject the possible tenant’s rental application immediately if they fail during the interview process.
Final Thoughts On What To Include In Running A Resident Screening
Resident screening is an important key in searching for good tenants. You need to get the right reports, and be on the lookout for appropriate “red flags”. Once you gain enough information about these applicants, you can be better informed when choosing the best tenant for your property. Running a credit check and employment verification should not be overlooked when conducting resident screening on potential tenants.
If you have any questions, please feel free to add them to the comment section below.
Disclaimer: This commentary is a matter of opinion provided for general information purposes only and is not intended to be taken as investment or trading advice under any circumstances. Information and analysis above are derived from sources and utilizing methods believed to be reliable, but we cannot accept responsibility for any losses any person may incur as a result of this analysis. Individuals should consult with their personal financial advisers. By using this web site or any information contained in it, the user specifically and expressly agrees that no advisor-client relationship is created between said user and any author, owner, executive, or principal of this web site by either use of this web site, or by any information, product, or service offered by or on this web site. No express or implied guarantees or warranties as to investment or trading results are made, and any perceived insinuations of such are hereby expressly disclaimed.