As a property owner, your top priority is ensuring that your rental property is well-maintained and in sound, habitable condition. That’s why it’s crucial to include tenant screening background checks in every rental application.
Tenant screening evaluates prospective tenants to determine their suitability for renting a property. It involves gathering information about the tenant’s credit history, rental history, employment, criminal history, and income to assess their reliability and responsibility.
Potential tenants have to meet the minimum criteria to be qualified tenants. A screening fee may also be paid depending on the terms agreed upon.
Property managers can assist in reducing the risk of renting to unqualified tenants. In this article, we’ll discuss the best practices you should adopt for an effective screening process to secure the best tenants.
Importance of Tenant Screening
Tenant screening helps property managers and landlords identify potential red flags and avoid renting to tenants who may not pay rent on time, resulting in costly evictions and property damage.
Tenant applications are given to all prospective tenants regardless of race, gender, ethnicity, religion, and disability. The Fair Housing Act prohibits differential treatment based upon the home seekerʼs protected group. Compliance with fair housing laws and regulations is a must.
Here are the best practices for screening prospective tenants:
Best Practices for Tenant Screening
Tenant Screening Checklist
Be thorough when conducting tenant screening - use a checklist to ensure all necessary information is gathered and evaluated. This includes the following:
- Contacting current and previous landlords
- Credit and background checks
- Check criminal records and eviction reports
- Check credit score and payment history
- Employment and income verification
Verify Previous Tenancy
Verify the information provided by the tenant through independent sources, such as previous addresses and landlords. Calling the current landlord is crucial to confirm the tenant's background and eviction history.
Prior evictions are red flags on tenant applications. One common mistake is failure to verify the information provided. Nowadays, it’s easy to fake credentials and documents.
Check Criminal Background
Criminal background checks are highly important. Illegal activities in your rental property can also have repercussions. In the worst case, police raids can temporarily shut down your rental business, leading to loss of income.
Review Employment History
It’s essential to contact the employers of the prospective tenant. Employment history can help determine their credit report and capability to pay rent. Unpaid rent is the leading cause of evictions, which can be costly and energy-draining.
In verifying employment, make sure the company is legitimate. Nowadays, it’s common for applicants to make you contact employers who are just friends or family members playing pretend.
Common Mistakes to Avoid
Property managers and landlords must avoid discriminating against prospective tenants based on protected characteristics, such as race, gender, or disability. Tenant screening laws should follow the Fair Housing Act when choosing qualified applicants.
The tenant screening process is essential for every rental property business. Responsible tenants will treat your home as if it were their own, helping to prevent costly property damage, unpaid rent, and legal issues.
Making an Informed Decision
When evaluating prospective tenants, it’s essential to consider all the information provided in the tenant screening report. Property managers and landlords should use a comprehensive tenant screening service and verify the information provided by the tenant through independent sources.
Property managers and landlords can make informed decisions about who to rent to by following the best practices for tenant screening. Here at Stewardship Management & Realty, our team of highly experienced professionals will ensure you choose reliable tenants and maximize your rental income. Ease your worries by calling us today!
Additional Resources
Essential Criteria to Consider in Your Tenant Screening Process
