When you have good tenants, you will have no problem sleeping peacefully at night because you, as a landlord, is confident enough that rental dues will be paid and your property that is leased out will stay fairly undamaged. However, when you have bad tenants you will be left to think about your property and your investments, notwithstanding complaints that are being called upon by neighbors. By employing tenant screening services, the concern of associating with bad tenants will be mitigated. This is because, during the initial encounter, these tenants might present themselves as trustworthy as if they are the best tenants there is where in truth, they are not. Therefore, it is important that such tenants are thoroughly screened before they are allowed to sign in for a lease.
In finding new tenants for your property, you have to choices – first is by hiring a rental property management company so that they will do the work for you for a fee, or you can save up the money and then find the new tenants yourself. If you are more cost-conscious, you may choose to do the screening yourself for your potential tenants. Conducting a tenant screening is not that difficult or costly if you follow the right steps.
Here are some of the steps in screening potential tenants:
- Request for an application.
You can start the process by requiring prospective tenants to complete an application. You can avail of a sample rental application from various resources, or you can create your own personalized rental application by using Microsoft Office templates, or application forms that are available online.
You should ensure that the application form that you chose will be able to cover everything that you need to know about the prospective tenant. To get the best results, you can choose to have an application that covers the financial information, employment information, and personal information of the prospective tenant. Ensure also that the application expressly states that a background check, criminal history report, or credit check will be done if deemed appropriate and that such tenant grants you the authority to check into their financial, employment, and personal history.
Here are some things that you might want to look into a rental application:
- The tenant’s current and previous employers
- The tenant’s current level of income
- Some financial information like bank accounts and credit cards which should include balances and the minimum monthly payments so that it can provide you with a financial picture on your prospective tenant
- References or contact information on previous landlords along with previous addresses, amount of rent being paid, and the reasons for leaving
- The tenant’s lifestyle information like the number and size of pets if there are any, and the number of occupants
- Other personal references which should have the names, and the length of acquaintance and their contact numbers
- Request that such prospective tenant completes the form and that they give it back to you. After the tenant has filled out the application, you should review the form before starting with the screening of such prospective tenants. If there is missing information, they could be red flags that the tenant might be trying to hide.
- Perform credit checks
There are some state laws that allow the landlord to charge a prospective tenant for the cost of performing a credit or background check. There are also other states that require landlords to cover the cost. For what it’s worth, it is always a good idea to pull a tenant’s credit. By having a credit check, this will give you an insight into the details about the credit history of your prospective tenant for several years back.
When looking into credit reports, it is best to consider the following:
- The tenant’s credit history
- The tenant’s current debt
- Perform background checks
By conducting background checks, this will be able to give you detailed reports about your tenant’s past. There are a number of companies who offer investigative services for you for a fee. They can provide you with information like eviction history, criminal history, credit history and other sorts of public records. Usually, you can have these reports by using the prospective tenant’s social security number.
When you request for a background check to your tenant, make sure that you gather the following information:
- The tenant’s eviction history. This will give you an idea if the prospective tenant’s reason for looking into new leases.
- The tenant’s criminal record
- Any relevant public records on the tenant so that you will know if the tenant is involved in a legal battle or has been sued in the past
- Correspond with previous landlords
Most of the time, when a current landlord is calling a former landlord, the common questions being asked are whether the tenant is a religious payer on their rent or if and if such landlord is aware that the tenant has plans of moving out. To be able to know more about the intentions of the tenant, you will have to do more research, without having to invade anyone’s privacy, by asking basic lifestyle questions about the tenant.
Some basic questions that are okay to ask the previous landlords are:
- Outstanding debts due to such tenant
- Late payment histories of such tenant
- Major damages that might have been caused by such tenant on the leased property
- Any disruptive activities by the tenant
- Was the tenant able to receive his or her security deposit upon moving out
- Feasibility of future lease agreements with the tenants
- Refer with Tenant’s Employer
Before executing the lease agreement with the tenant, it is also best that you know that such tenant has a stable source of income. And the best way to verify this is by either requiring such tenant to give you a copy of his or her pay stub or you can choose to contact the tenant’s employer directly to verify tenant’s connection with such organization. There might be employers who will not give you details of such tenant’s salary, but it is still better because you are able to vouch for such tenant’s employment status
As a landlord, it is very crucial that you conduct tenant screening so that the risk of associating yourself with problematic tenants will be mitigated.