Did you know that 25% of applicants have some type of criminal record? Or that the average applicant’s record score is 650? This is the type of information you learn when you perform a thorough tenant screening process. Performing a detailed screening of each applicant ensures you pick the most qualified tenant for your rental property. This reduces the risk of the tenant not paying or causing damage.
Make sure your tenant screening process includes these four steps.
1. Credit Check
The most basic and common method for determining someone’s ability to pay is by checking their credit report. It will show their payment history, debt, and credit score. This shows you their history of payments and how likely they will pay their rent on time each month. It can also tell you what their debt to income ratio is. If they have a large amount of debt to pay off and a low income, they will struggle to afford their monthly rent.
Keep in mind that young tenants may not have an established credit history and lower credit scores. Other tenants with less desirable credit reports may be willing to provide more reassurance to show their reliability, such as signing the lease with someone who has a stronger credit score.
2. Employment History
Following up on an applicant’s employment history will do two things. The first is ensuring that the applicant can pay. The second is establishing the applicant’s stability. Someone who changes jobs every year is likely to continue changing jobs, which can also lead to them changing housing. They also may find themselves without income and unable to pay their rent. On the other hand, someone who has consistently worked at the same company for several years is likely to continue working there.
3. Landlord References
One of the most common mistakes that landlords make is not following up on landlord references. They ask for this information but then never put it to good use. Speaking with one or two previous landlords can give you better insight into how an applicant behaves as a tenant. Ask if they paid the rent on time, if they were amenable, and how they left the property.
Be careful when calling; a less reputable applicant may have a friend or family member pose as a former landlord. To get around this, try calling the references and posing as someone looking to rent. Asking about available properties will be a natural question if the reference is a real landlord. If they aren’t, they won’t expect this question, and it will throw them off.
4. Reason for Leaving Previous Residence
This simple question can tell you a lot about a potential tenant. Ask an applicant why they are leaving their current residence. Often, the answer is simple, such as a change of job or looking for more affordable housing. However, sometimes the answer is more complicated. If you find the applicant giving you a long list of complaints about the property, the neighbors, and the landlord, this can give you valuable insight into the person’s demeanor. Perhaps those complaints are legitimate, or perhaps this is a future glimpse into how they will be when living at your property.
Improve Your Tenant Screening Process
If you are ready to improve your tenant screening process, then let our expert property managers assist. Our team can handle every step of placing a new tenant, from application to lease signing. We can help you place the most qualified tenants to ensure you make the most of your rental property investment.
Reach out to our team today and learn about how we can help you streamline and improve your tenant screening process.
