As the rental process continues to move to digital, finding qualified tenants has become
increasingly more difficult. It is estimated that rental fraud has gone up as much as 30% since Covid. That’s why properly screening a potential tenant is so important. Whether you have a screening process in place, your current process seems outdated, or you want to be more effective, we’ve provided a guide to screening for high-quality, long-term tenants.
In our step-by-step tenant screening guide, we’ll cover the following topics.
1. Setting the rental requirements upfront.
2. Communicate the requirements in rental ads, on the website, and in marketing materials
3. Running credit and background checks.
4. Meeting with prospective renters in person.
5. Verify employment and previous rental references (if available).
1. Set the basic requirements.
I know this seems like a no-brainer, but setting and communicating the minimum rental requirements remains #1. Depending on the property the requirements may be different, for example, if you’re managing an affordable housing complex, more emphasis may be placed on renter history than income. On the other hand, if you’re managing a market rate or high-end market-rate building, your experience might support that the higher the tenant’s credit score is, the better the tenant. In that scenario, you could adjust your minimum credit score to 700.
The basic requirements should include the following:
· Income requirements
· Credit score thresholds
· Criminal history policies
· Employment history and references
· Previous eviction disclosures
· Any property-specific requirements
· Pet policies (86% of renters have a dog or cat)
· Smoking/Non-smoking policies
Review your current rental requirements, and make sure they are competitive, up-to-date, and reflect the ideal tenant.
2. Pre-screen with your rental ads, and website.
Be clear and precise in ads and on your website about what the rental criteria consist of. I am positive you don’t have time to vet unqualified applicants, and potential renters don’t want to waste time if the property is not a good fit.
Rental ads typically will need to be a condensed version of the basic requirements, but the ad should direct them to a more comprehensive list of requirements, via a form.
Take some time to review your current process and the information you require. Make sure all the information you need is listed, this will help eliminate delays, and frustration for the applicant and you.
3. Background and credit checks.
At this point, the applicant is well informed of the requirements needed to secure a rental contract, and the next steps would be to run a background and credit check.
In the rental today, there are two options to screen tenants:
1. Tenant-screening software returns all the information needed in minutes.
If you currently use screening software that does not meet all your requirements, it’s time to bring that up at the next management meeting. If the property management company has invested in a software program, they want it to work.
2. Manually screening applications can be time-consuming and you are at the mercy of multiple agencies to provide you information promptly. This can result in lost income.
4. Meet prospective tenants personally.
You shouldn’t judge a book by its cover but shouldn’t ignore your gut feeling. Use this time to better understand the applicates’ needs, expectations, and long-term plans. This is also a good time to ask questions about their application, for example, if everything in their history points to an A+ rating, except for a previous rental reference comment, ask them about it.
Also, be prepared for any questions they might have for you once they have toured the property. Property maintenance, building esthetics, and common area maintenance remain top priorities for many renters.
5. Verify employment and previous rental references
I’ve listed this as the last step before you present the applicant with a contract. Why? A lot can change in a few days, and employment is one of them. You must enter a contract with the most current information possible.
After the applicant passes the credit and background threshold, it’s time to start verifying employment and reaching out to previous landlords.
The team at Power Wash Charlotte hopes you found this information helpful. If you have a minute, give us a call at 704-393-7773 or check out our property management services here, to see ways we can help simplify your maintenance needs.