Having to evict a tenant is a landlord’s nightmare scenario. What’s worse? Many renters who face eviction owe less than $600! But while the amount of money may be small, the process is arduous and emotionally exhausting for both landlord and tenant alike. Our solution? Aim to avoid evictions entirely through proper tenant screening ahead of move-in day.
This guide will unpack why tenant screening is crucial in finding suitable residents. We’ll then outline seven steps to screen tenants successfully, help you practice saying “No” when needed, and recommend how to make your job 95% easier.
As a landlord, you hope to find tenants who will feel at home while respecting your property. To find these priceless people, you can’t just rent to your cousin who needs a place to crash. You must screen multiple prospective tenants and choose the best option based on facts, not emotions.
The tenant screening process should be quick but thorough, covering all necessary bases and asking the right questions. You can undertake this task solo, using some of the best online tools, or partner with a professional property manager with years of experience.
You can also do a few things as a landlord to find and keep good tenants.
These seven steps for tenant screening will allow you to filter through applicants and identify those unsuitable for your property while remaining unbiased in finding good renters. By screening tenants via this funnel, you can find the best tenant for your space unequivocally.
The first essential step to tenant screening is the pre-screening process that you’ll include in a tenant rental application. While most applications live online, they’re customizable to specific landlord needs. Make sure to ask questions that pertain to a tenant’s ability to afford rent and behave respectfully in your space, not anything personal that may raise unconscious bias when choosing a tenant. You can, however, require personal references to attest to a tenant’s character, which can affect your decision to turn over your precious property to their care.
Once you’ve found a few promising possible tenants, it’s time to run a credit report and background check. While it would be great to trust everything on an application, you’re running a business, so due diligence is critical. Remember to abide by the Fair Credit Reporting Act, which aligns with Fair Housing laws, or you could face legal trouble.
When interpreting a credit report, looking at the data holistically is essential. For example, many landlords view student loan debt differently than credit card debt since it’s accrued through other means. Student loan debt builds through completing school, while credit card debt often stems from living beyond one’s standards, which is much less financially responsible.
A survey of 2,600 people at Self showed that 73% of people lie about money somehow, so a betting person wouldn’t take someone’s word when they list their income. It’s time to do a little digging. Of course, you can ask for a current employer as a reference on the tenant application, but if you have doubts after talking on the phone, you may want to triple-check. LinkedIn is a quick and reliable way to verify a tenant’s income and employment. Remember to look beyond face value and see if their connections are genuine before you move the possible tenant further up in the application pile.
If a tenant has made it this far into your tenant screening system, you should have double-checked everything. Call every number, Google all prior addresses, speak to past landlords, and check legal records for previous evictions. Any number that doesn’t work or is disconnected needs a chance to be corrected by the applicant. If it doesn’t reach a real person? It’s a no. Move to the 5th step without this tenant.
It’s time to finally meet your applicants. You can do so in person or via Zoom or Skype, which is standard nowadays, especially if someone is relocating. Ask questions like these to ensure you get the information you need to make the best tenant decision in the final steps of tenant screening.
When on the hunt to find tenants, landlords are subject to the nondiscrimination and fair housing act, which we’ve previously mentioned. If you’re unfamiliar, the Fair Housing Act of 1968 is a landmark piece of civil rights legislation in the United States that outlawed discrimination in the sale, rental, and financing of housing, historically unfair and exacerbated through the racist practice of redlining.
Also, stay alert for local housing laws your state or county enforces. It’s considered best practice to consult a real estate lawyer if you have any questions before making a final decision.
When making a final decision in the tenant screening process, you should have clear tenant acceptance qualifications that aren’t subject to any feelings. Remember to stick to the facts.
Here are a few questions with definitive answers that landlords find helpful:
These qualifiers may not yet lead you to the perfect tenant, but they are an unbiased way to narrow your search.
With the information gathered through the seven steps of tenant screening, it’s time to make a final decision, which means you’ll be saying “no” to some disappointed people. And using an online tenant screening software like the one Buildium offers ensures you don’t deny someone without legal cause. But whether you deny someone’s application with a legal cause, or have too many applicants scrambling to rent your place, remember that while saying “no” may not be pleasant, it’s much better than an eviction.
Of course, if you’re still dreading delivering rejection or completely overwhelmed by the steps outlined above, did we mention there’s a way to move 95% of these tasks off your to-do list? The best way to find tenants easily and offload tasks like tenant screening, background checks, employment verification, and even rejecting the applicants who weren’t awarded tenancy is to hire a professional property manager.