Are You Successfully Screening Your Tenants?
- A startlingly high percentage of landlords don’t screen tenants
- 66% of them do not conduct sex offender registry checks
- 49% of them do not conduct criminal background checks
- 49% of them do not contact past landlords or other references
- 23% of them do not conduct credit checks
Here are the common mistakes landlords make when screening tenants:
Didn’t See the Red Flags at the Showing
If you miss red flags at a showing, like disheveled appearances, disrespect, or unfair negotiations, then you’ll end up dealing with a bad tenant.
Red flags to look out for at a showing:
- Appearance: Is the person neat and clean? Did he/she make an effort to make a good impression? A disheveled appearance often means their lifestyle and house will be disheveled.
- Car: If the tenant has a car, is it nice? Clean? Take mental note of how well they take care of any belongings they bring with them.
- Behavior: Does the prospect behave respectfully? You can typically tell if a person is respectful by the way they speak to you and their actions. Did the prospect wipe his/her shoes when they entered? Pay attention to details.
- Opinion of Property: Are they pointing out legitimate concerns about the property or being critical? Are they overly ‘in love’ with the unit? Watch out for insincerity, it’s a sign of lying. Are they fairly negotiating price with you or are they trying to rip you off?
- Preparedness: Are they asking the right questions or seem uninterested? Did they come ready to give a deposit and fill out an application? Rental units can go quick, and their level of preparedness shows their seriousness as a potential tenants.
Didn’t Ask the Right Application Questions
If you don’t ask the right questions, you won’t get the right answers. Without a comprehensive application, you’ll miss out on important information. Here at Rentalutions, we provide you with the best application. Good applications ask for:
- Personal information (name, phone, address, date of birth, social security number)
- Prior landlord name and contact info
- Current employer name and contact info
- Ask about criminal history and prior evictions
- Lifestyle questions- do they smoke or have large pets?
- Signature to verify information is true (still do a background check, of course)
Didn’t Check Employer History
If you don’t check your prospect’s references, your tenant might not have a job. Renting to a tenant who can’t pay rent is a huge liability. It’s not enough to take their word on their employment. Follow up by calling a tenant’s employer and verify his/her position, income, and stability as an employee. A prospect’s monthly net income should be at least 3x the rental price.
Didn’t Contact Prior Landlords
You might rent to someone who is irresponsible, if you don’t ask their prior landlords any questions. It’s not enough to find someone who will pay rent on time. You need someone who won’t damage your property. Tenants who are irresponsible might break windows, tear up or stain carpet, break appliances, punch holes in the walls, or never take out the trash and the unit will stink. This not only costs money to fix, but more importantly, it takes up your time and adds to your stress. By checking with prior landlords, you can assess how responsible tenants were in the past to avoid reckless tenants. The saying is true: the best predictor for future behavior is past behavior.
Remember: low risk tenants save you time, money, stress, and give you a higher profit.
Didn’t Complete a Credit Check
Without a credit check, you might rent to someone with past evictions, or tenants who are financially irresponsible.
Credit checks tell you a tenant’s credit score, credit history, and search public records for past evictions.
At Rentalutions, we provide comprehensive online tenant screening services and credit checks. The credit report includes the tenant’s credit score, full credit history, criminal background check, public records, a public record search of past evictions, and an inquiries check.
Didn’t Check Criminal History
If you don’t check a prospect’s history, you might be dealing with a criminal. It destroys your reputation as a landlord, puts your neighborhood at risk, and puts yourself at risk. If a criminal commits a crime at your property and they have a known criminal background, you can be sued. It turns your property into a liability, not an asset. Claiming to be unaware of a tenant’s criminal history is not an excuse. It will be considered negligence. This is true for all kinds of crimes: drug use, drug dealing, theft, assault, or murder.
There’s also the chance they are a criminal that hasn’t been caught yet, which is why it’s also important to do a credit check and to listen to their references, in case they mention any behavioral red flags.
Screening tenants helps you avoid tenants who create stress. If you don’t screen your tenants thoroughly, you will likely end up dealing with late payments and/or damaged property. But don’t worry- if you end up with a bad tenant, you’re not alone. Read our advice on how to handle tenants late rental payments and how to handle evictions. Want to avoid the headaches associated with late payments, damage, and eviction?
Prevention is Key
The best way to avoid problems down the road is to thoroughly screen potential tenants:
- Call previous landlords
- Check work references
- Require net monthly income is 3x rental price
- Hand out an application with the right questions
- Require a background and criminal check
When it comes to rent, screen tenants on two objectives:
- Make sure the tenant has sufficient funds and/or consistent income to pay rent
- Ask for work references and proof of income
- Make sure the tenant has a history of paying their rent on time with no outstanding debts
- Look at credit check to see if they have skipped payments or debt
- Ask prior landlord if he/she had late payments
And watch out for tenant screening scams.
Screening tenants is a key part of managing your monetary investment, your property, and your reputation well. How you screen your prospective tenants mirrors your reputation as a landlord and directly affects how well your investment pays off. But don’t worry, we can help you along the way. Here at Rentalutions, we provide screening tools. Check out an example of our comprehensive credit and background report. And our rental application that has all the right questions. We want to make renting as easy as possible for you!