“The Importance Of Tenant Screening” written by Mike Marko
Are you wondering about how and why you should screen a tenant that is applying to rent one of your properties?
This is a question I always get whenever I write articles about property management. It is not surprising that there are a lot of new property managers out there who are still not aware of the process and the importance of doing the tenant screening.
They might not know that conducting a tenant screening is one of the most important things that they have to do for the success of their business.
Well, do you have a good tenant? That is the question you have to ask yourself for you to know if your tenant screening is effective or not.
Every tenant has to go through a rental application process. When filling out the rental applications, they provide all the information needed for the property manager to start the background check and tenant screening process.
As a property manager, you should verify the applicant’s identity, review and screen background reports such as criminal, credit reports, and rental history. Doing a complete background check is useful in evaluating a rental application.
Although it is not required to be strict, property managers should have requirements or qualifications in choosing a tenant. Conducting the correct process of tenant screening will help you in choosing the applicants who met or exceed your standards.
Part of the application tenant screening process is to gather important information from the prospective tenant’s credit history, rental history, and employment. The information from the tenant screening reports will help you know about the tenant’s behavior and financial capability of paying the monthly rent.
The credit check contains the prospective tenant’s credit activities for the past seven years. Items such as missed payments, bankruptcy, unpaid bills, and remaining debts will be included in the report.
You don’t want to get a tenant who will have a problem paying rents to you in the future.
Getting a rental history report will give you an idea if the applicants have bad records from their previous property managers. If they have a criminal background or damaged previously rented properties, it will also affect their eligibility of renting a new property.
As a property manager, it is your responsibility to protect the reputation of your business and the tenants in your property because you are the one to have to fix the problems if tenants don’t pay rents or damage the property. So better think twice and be sure that you do a complete tenant screening process of all the information available to you when doing a background check..
Another part of the rental process is to check the applicant’s current employment as well. Make sure that the applicant has a stable job to support the monthly rental fees that they need to pay you. You also have to know if they are capable of paying you every month and if they can sustain this throughout your contract.
After getting all background checks completed and screening the important information, you have to meet the tenant in person. This allows you to interview and go over all the tenant screening information, verify information, discuss discrepancies, with the potential tenant face-to-face.
In following this process you should be able to identify and uncover everything obtained during the tenant screening process. It is best to have your questions needed to be answered prepared and you are ready to go.
Analyzing Your Tenant
Once you have all the necessary information about the tenant’s behavior and financial capabilities, it is time to weigh every information you got. Every property manager will have their own tenant screening process and should have criteria established. If ever there is negative information about the applicant. Ultimately the choice is yours whether you will accept or decline the rental application.
After you develop your own tenant screening process the key to making it work seamlessly is remember to stick to the plan. The reason why we do tenant screening is to filter the applicants and only choose those who have the qualities of a good tenant to find the most qualified to rent the property to.
If after completing the tenant screening process and you still haven’t found good things regarding the prospective tenant, then better decline that applicant. That will allow you to proceed to the next tenant application.
You should never waste your time if an applying tenant failed your standards as a better tenant could be in the next application you are screening.
Tenant screening will make your life easier as a property manager. All the information you have collected can be used to help make your ultimate decision: deciding whether or not the applicant will be a good or a bad tenant.
By doing a thorough process and following these tips that, it will be easier to decide whether an applying tenant fits your standard or not.
What if you made the wrong decision?
It happens… And dealing with troublesome tenants will be addressed in future articles.
As long as all the steps of a thorough tenant screening process are followed, you increase the chances that you’ll get a good tenant and you will not experience any problems with them.
Final Thoughts On Tenant Screening
If you have had any experience with “undesirable” tenants you’ll definitely know how important doing a thorough tenant screening can be to a property manager. You have to be “smarter” than the tenant. If you are new to tenant screen, be sure to just take your time and analyze every detail carefully.
If you have any questions or comments, please feel free to write them below.
If you need help marketing your business online then check out IM Consultant Services.
Disclaimer: This commentary is a matter of opinion provided for general information purposes only and is not intended to be taken as investment or trading advice under any circumstances. Information and analysis above are derived from sources and utilizing methods believed to be reliable, but we cannot accept responsibility for any losses any person may incur as a result of this analysis. Individuals should consult with their personal financial advisers. By using this web site or any information contained in it, the user specifically and expressly agrees that no advisor-client relationship is created between said user and any author, owner, executive, or principal of this web site by either use of this web site, or by any information, product, or service offered by or on this web site. No express or implied guarantees or warranties as to investment or trading results are made, and any perceived insinuations of such are hereby expressly disclaimed.