LeaseRunner Blog

Dos & Don’ts of Tenant Screening

Posted August 27th, 2012 No Comments

As the demand for rental properties skyrockets, you may be bombarded with applicants. With so many people vying for a rental home, how can you be sure you find the right tenants?

A landlord’s worst nightmare is an irresponsible and negligent tenant. But fortunately, comprehensive tenant screening can greatly reduce the chances of signing a bad renter. Here are a few tips simple “dos” and “don’ts” to start landlords off on the right foot when screening a tenant:

–    DO Conduct a Comprehensive Background Check. Running a comprehensive background check on a potential tenant is one of the most important steps in finding a credible renter. Always use a report that includes credit, criminal and eviction screening at a minimum. The best reports also include a decision recommendation, income to rent analytics and credit payment history in an easy-to-read format. Covering any potential issues before signing a new rental will save landlords any potential stress in the future.

–    DO Make the Applicant Pay for the Report. Use a service that enables the applicant to pay for the background check directly. If the potential renter is interested in a property, has nothing to hide and has the funds to rent, he or she should be comfortable paying for the report. Having the applicant pay for the report saves the landlord the inconvenience of fronting the screening costs for multiple applicants.

–    DO Take the Time to Read Tenants’ Background Reports Carefully. Be sure to take careful note of any collections flags. Applicants with collections actions are much more prone to skip payments or require eviction. Also, be sure to take the income to rent ratio into account. Tenants that make less than two times the rent amount are more likely to pay late or, skip or stop paying altogether., resulting in a huge headache and potential eviction. Tenants that make more than three times the rent amount are much less likely to have payment issues. Also, be very wary of tenants that don’t have a bank account and only want to deal in cash. This can often be a the sign of a much deeper problem.

–    DON’T Waste Time on the Phone Call to Prior Landlords. Calling a tenant’s prior landlord is often ineffective because some landlords provide no information as a blanket policy to rule out avoid any chance of defamation. Even worse, others may lie about the history of the tenant to expedite a troubled tenant’s move out of their property and into yours. Save the time and avoid the hassle of calling previous landlords, and stick to the facts from the background check.

–    DON’T Forget About Fair Housing. The Fair Housing Act was created to protects the buyer or renter of a dwelling from seller or landlord discrimination. The act prohibits refusal to sell or rent a dwelling to any person because of race, color, religion, sex or national origin. To avoid any potential issues, make sure to create an objective standards for your decision and apply it them to the data in the screening report.

Tenant screening doesn’t have to be overwhelming for landlords. Following these simple tips and taking the extra time to thoroughly screen applicants will be well worth signing honest, dependable tenants and will greatly reduce stress in the long run.

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