What You Need To Know About Tenant Screening

Managing a property is a big responsibility. Not only do you have to keep the property in good condition, but you also must be mindful of who you allow into your rental homes and spaces.

Why Is It Important To Screen Tenants?

Tenant screening is an important process for landlords to ensure they are renting to a responsible and reliable tenant. There are many factors that go into screening a tenant, including credit score, rental history, employment history, and criminal background check.

It helps you weed out problem tenants before they move in, which can save you a lot of headache (and money) down the road. A good tenant will pay their rent on time, take care of your property, and generally be a pleasure to deal with. A bad tenant, on the other hand, can make your life a living nightmare.

Factors To Consider When Screening Applications

These are the things to consider when apartment screening for tenants/residents.

Tenant Screening Laws

When it comes to tenant screening, landlords must follow state and federal laws. Landlords can face hefty penalties for violating these laws, including fines, loss of their rental license, and even jail time.

The most important law landlords must follow is the Fair Housing Act. This law prohibits discrimination in housing based on race, color, national origin, religion, sex, familial status, or disability. In other words, landlords cannot refuse to rent to someone based on any of these protected characteristics.

In addition to the Fair Housing Act, there are other laws that landlords must follow when screening tenants. These include the Equal Credit Opportunity Act, which prohibits discrimination in credit decisions, and the Fair Credit Reporting Act, which governs how landlords can obtain and use tenants' credit reports.

ExactEstate, a property management software, has partnered with TenantAlert to help obtain credit reports legally. Using this information, you can verify an applicant's identity and get their credit score.

Credit Score

A credit score is one of the most important factors landlords look at when screening tenants. Those with a high credit score are more likely to be approved for an apartment, while those with a low credit score may be denied. This is because a high credit score means the applicant is responsible with their finances and is more likely to pay rent on time, while a low credit score may indicate financial instability.

As mentioned above, though, a credit score is just one factor landlords look at when screening tenants. Plus, it's not the only indicator of someone's financial responsibility. For instance, someone may have a low credit score because they're new to credit or because they've had some financial hardships in the past. But if they have a steady job and income, and can show that they're able to pay their rent on time, then they may still be considered a responsible tenant despite their low credit score.

Rental Background

You'll want to verify that they have been a good tenant in the past and that they have always paid their rent on time. You can do this by doing a rental background check, which can tell you whether they've been evicted or had any late payments. Plus, it can also inform you whether they've been involved in legal troubles.

To better understand a potential tenant's rental background, you can use a property management software like ExactEstate, specifically its Tenant Screening feature. This tool helps you to quickly gather all the information you need about an applicant in one place so that you can make an informed decision about whether or not to approve them.

Employment History

A potential tenant's employment history should also be taken into account during the screening process. The applicant's current employer will be contacted to verify employment and to obtain income information. Furthermore, previous employers may also be contacted in order to get a sense of the applicant's work history and character.

Income

Additionally, you must take the applicant's income into account. Knowing their current income will help you determine whether they can afford the rent. You can ask for proof of income in the form of a pay stub, W-2, or tax return. It's also a good idea to verify the applicant's income with their employer.

Landlord References

These references will give you a good idea of what the applicant has been like as a tenant in the past and can help you make a decision about whether or not to rent to them. When contacting references, be sure to ask specific questions about things that are important to you, such as whether or not the applicant paid their rent on time.

Past Reasons for Changing Residences

Knowing a tenant's past reasons for moving can give you some valuable insight into what kind of tenant they will be. If they have a history of moving frequently, it could mean that they don't like to stay in one place for long or that they have trouble following through on commitments. On the other hand, if they have only moved a few times and each time was for a valid reason (like a job transfer), then it's less likely that they'll cause any problems during their tenancy.

Determining this can be tricky, but you can start by asking the applicant directly why they are looking for a new place to live. If their answer is vague or unsatisfactory, you can try contacting their previous landlords to get a better idea of what kind of tenant they were.

Tenant Demeanor

When you are looking for a new tenant, it is important to interview each applicant. This will help you to get a feel for their demeanor and whether or not they would be a good fit for your rental property. You can learn a lot about an applicant by the way that they answer your questions and how they carry themselves during the interview process.

While it's not always possible to meet every applicant in person, try to video chat or have a phone conversation with them if you can. This will help you to get a better idea of who they are and whether or not they would be a good tenant for your rental property.

If you are unable to interview the applicant in person, there are still some things that you can look for when reviewing their application. Make sure that the applicant has provided all of the required information on their application. If they have left anything blank, this could be a red flag. You should also look for any discrepancies between the information on the application and what was said during the interview.

Online screening is streamlined with property management software. It allows tenant applicants to submit their application and accompanying documents. Then, you can review and compare applicants in an efficient manner.

Takeaway

While it may seem like a daunting task, screening tenants doesn't have to be complicated or time-consuming. By following some simple best practices, you can streamline the process and increase your chances of finding qualified, responsible tenants.

ExactEstate can help you find the perfect tenant for your rental property. We offer a comprehensive resident screening software program that includes a tenant screening module. This module allows you to run credit checks, criminal background checks, and eviction history checks at the click of a button. Schedule a demo today to learn more.