5 Steps to Screen Your Applicants
The most important aspect of owning a rental property is finding a tenant who will pay the rent in full and on time, and who will treat your property well while living there. It can be a daunting task – which is why screening is crucial!
Here are five tips to get you through the screening process and on to your ideal tenant!
1. Create a Standardized Application
You will need to know more about your tenant than you will be able to pick up in a pre-screening. Some landlords pre-screen by an informal interview process at the time of showing the rental property. This type of pre-screening not only lacks a paper trail (which is important, should a rejected tenant make the accusation of discrimination) but also, with the shift to online and independent viewings, this is a step that logistically can no longer be relied upon. You will need to implement a tight, standardized, application.
What do we mean by “Standardized”?
Every potential tenant has a right to the same application process regardless of social background. As a landlord, and therefore the operator of a business, your decisions should be purely financial and must be unbiased against all other influences. In order to guarantee that your process is fair, every applicant must receive the same application and be submitted to the same credit and background checks – creating a standard procedure. This makes it easier for you, as well! Using a checklist of qualifications takes your “gut feeling” out of the equation and will propel you towards a reliable tenant.
What Should the Application Include?
- Identities of every potential occupant
- Contact information for previous landlords
- Current and previous employers
- Current income level
- Number and size of pets and number of occupants
- Personal references
Do not proceed to the next step in the screening process if the application is incomplete. While the applicant may have simply forgotten some information, an intentional omission may indicate that the tenant is trying to hide something. Once the application is completed, move on to the next step.
2. Contact Previous Landlords
The applicant will have provided previous addresses and the contact information for previous landlords. Contact them! A landlord will have insight into what kind of tenant your applicant is. You may ask:
- Is the landlord aware that their tenant is moving?
- Did the tenant pay their rent in full before moving?
- Was there a history of late payments?
- Was the tenant disruptive to other tenants?
- In what condition did they leave their unit?
- Would they rent to this tenant again?
3. Run a Credit Check
A credit check will show you details about the tenant’s previous credit history, going back 7 to 10 years. While you may decide that you would like to focus on the credit score itself, late credit card payments doesn’t always mean a bad tenant. What may concern you is serious delinquency such as bankruptcy.
4. Run a Criminal Background Check
By acquiring the prospective tenant’s Social Security Number as part of the application process, you will now use that information to pull a detailed history of the applicant’s past. Many companies offer investigative services (for a fee) and will provide you with an eviction history, criminal history, credit history, and various public records.
A recent eviction may indicate the inability or unwillingness for the applicant to pay rent. A conviction for a violent crime makes the applicant a potential threat to you or your other tenants. A conviction for serious theft may indicate a danger to your or your other tenants’ property.
5. Verify Employment
You will need to verify that the applicant is employed by the person / business they claim on the application. Not all employers will reveal salaries, but they can verify that your applicant is a current employee. Check stubs may also be used to verify employment and that rental income qualification is met, but be aware of do-it-yourself pay stub scams.
Once your entire process is complete...
you will have narrowed down your field of applicants! Again, to maintain a consistent and fair process, whichever qualifying applicant meets the approval criteria first, regardless of any social background indicators, is your next tenant!
At the end of the day, you are providing shelter in exchange for payment. By ensuring that you screen for potential issues in that process, you will save yourself possibly thousands of dollars in unpaid rent, the hassle of having to find another tenant, and can move on to creating and building a relationship with your tenant with trust and consistency on both sides.
If this sounds too complicated or time-consuming to you, then look into hiring a Property Management Company! Frontline Property Management, Inc has used a reliable, fair and consistent application process for years. Our team of Tenant Coordinators work every day to provide the greatest quality control and customer care to every applicant, and not only guide prospective tenants through the application process but also create the leases for those who are approved!