Tenant screening is a critical part of property ownership when renting out real estate. It is a very tedious yet rewarding process if done meticulously and correctly. When there are rental vacancies it’s often the goal to fill them as quickly as possible, However, taking the time to screen potential tenants helps to ensure no renter issues down the line and you get to know each individual on a more personal level.
What is Tenant Screening?
The entire process of tenant screening is basically a very long-winded and thorough background check. It helps landlords or property managers determine who is fit to be a tenant based on a variety of factors.
Though every tenant screening process is different, here is a standard step-by-step of what tenants should expect, and the main criteria that landlords and property managers should focus on.
Prior to step #1, the application, it’s important to inform all prospective tenants of the screening process. This will allow them to all have resources available when they need to complete the screening, but it also helps in early weeding out of unfit renters. Usually, if someone knows they won’t pass the screening they don’t even submit the initial application.
Application
The initial application is used for the collection of all essential personal information. Renters will need to provide their name, contact information, references, estimated move-in date, etc. This helps whoever is managing the screening process to have a clear list of prospective renters.
Good to know: Sometimes initial applications can only be filled out after submitting a non-refundable application fee. As unfortunate as this extra cost may be, it helps cover the cost of each background check or criminal history report without putting a financial strain on current tenants.
Credit Check
This is one of the most important parts of tenant screening. A credit check goes through a potential renter’s financial history – financial responsibility, dept, credit score, and payment history. All factors point to whether or not someone can afford to be a renter at a certain establishment.
Rental History
Rental history helps a landlord or property manager determine the kind of tenant that someone is. Their rental history will show things like if rent was paid on time, whether there were any damages to their previous rental properties, or if they are an overall pleasant tenant.
Such information can be acquired through both physical documentation as well as phone calls to the renter’s references, or prior landlords. The rental history category also takes into account all prior evictions and this can determine whether or not someone is accepted as a renter.
Employment Verification
Employment verification is needed to determine that the tenant can continue to pay monthly rent. This piece of the process gathers a person’s pay stubs over a period of time to prove that they are working and earning money consistently enough to make payments.
Criminal Background Check
The criminal background check is a standard check that many employees and government officials go through. This will determine if a potential tenant would pose a threat to others in the community.
Remember, not all tenant screening is the same, but it’s important to understand the gist of it and the reasons for the complexity of some categories. Tenant screening is essential to protect your property and maintain a peaceful living environment for tenants. By conducting a thorough and fair screening process, it increases the chances of finding responsible and reliable tenants who will respect the property and uphold all agreements.