Screening tenants is one of your most important responsibilities when you’re renting out a property. This is where you can most influence the type of rental experience you’re going to have. When you place a qualified tenant, you can expect to collect rent on time, have some assistance maintaining your property, and establish a positive and respectful relationship with your resident. If you choose a tenant who is not well-qualified, you might find yourself chasing down late rent every month, enforcing the lease in ways you did not expect, and cleaning up damage after they move out.
Choose your residents carefully.
To do this, you’ll need a thorough and detailed application as well as an established set of rental criteria and a fair but rigorous screening process. If you’re working with a property management company, all of this will be taken care of for you. If you’re an independent landlord, you might worry that your tenant screening process is missing something or your screening report is incomplete.
Maybe you’re nervous about calling former landlords to ask for references. Maybe you cannot seem to access the data that’s necessary to confirm there have not been any prior evictions. Maybe the addresses your applicant gave you do not match the addresses that are pulled from the credit report.
Here’s why your tenant screening report might seem incomplete, and what you can do about it.
Establish Qualifying Rental Criteria
Create a consistent list of what you’re looking for in a tenant. This will help you move through the screening process efficiently and with consistency. You will be far more objective, and there’s less risk that you’ll discriminate unintentionally. Your qualifying rental criteria might include income standards, a minimum credit score, and no history of felony convictions and evictions.
Provide this criteria to applicants before they submit their application and fee. They will self-screen themselves and decide whether or not they have a chance at being approved before they apply.
Credit Report versus Credit Score
You might have a lot of missing information if you’re glancing at the credit score but not the entire credit report. A credit score can provide an acceptable threshold. Perhaps your qualifying criteria, for example, requires tenants to have a minimum 600 credit score. It gives you a benchmark.
It does not tell you everything that you need to know, however.
Go through the entire credit report and look for potential red flags that could tell you this tenant is a bit of a risk. A few late payments should not worry you. A large credit card balance isn’t even alarming, as long as it is being paid on time. Sources of concern might include:
- Money owed to former landlords or apartment buildings.
- Utility and other housing-related accounts that are overdue or in collections.
- Repossessions and foreclosures.
If the derogatory credit issues are older and the tenant can demonstrate they’ve been doing better over the last few years, you can likely feel comfortable approving them as tenants. However, if there is a lot of recent financial chaos, you might want to think twice.
National Eviction History Search
Your screening report is incomplete if you are unable to conduct a national eviction search. Typically, you can check for evictions in the local area by checking with local law enforcement. However, tenants are more transient than ever, and you may have applicants who have lived in different states. A national eviction search will show you if they’ve been removed from their homes in other areas.
Without access to these databases and records, you could be at a disadvantage. An applicant who has been evicted in California or Chicago, for example, could simply choose to leave that residency off the application. Checking the nationwide eviction database is an important way to protect yourself against unqualified tenants.
Gathering a Complete Rental History
You want to talk with landlord references as well. This is often left out of the screening process for many landlords.
We recommend you always investigate an applicant’s rental history. It’s the best way to get an idea of how you can expect rent to be paid and the property to be taken care of.
On your application, ask for contact information for at least two or three references. These should be landlords or property managers that they are currently renting from or previously rented from. Confirm that they are, in fact, the owners or managers of the property. You can check local records for this information. Then, get in touch.
Ask the landlords to confirm the dates of residence and the amount of rent that was paid. Then, ask questions such as:
- Was rent paid on time?
- Was the lease followed?
- Was proper notice given before the tenant moved out?
- Did the entire security deposit get returned to the tenants? Was there property damage left behind?
- Were there any complaints from neighbors, vendors, etc.?
- Did the tenant have a pet? Was the pet well-behaved and was there any pet damage?
These questions will help you determine whether you want to rent your property to the tenants who are applying. Always ask the landlord you’re speaking with whether they’d rent to the tenant again. That will tell you almost everything you need to know.
Make sure your application is also complete. You’ll need to have all of the tenants residing in your rental property complete an application if they are 18 years of age or older. You’ll need them to complete every field and sign the application, which I should grant you permission to check credit, background, and references.
Do not leave your tenant screening report incomplete. These are important data pieces you need to collect when you’re trying to choose a tenant for your investment property. The more information you can gather, the better of an idea you have about who is living in your property.
As you can see, there’s a lot involved in the screening of a tenant. If you find you need some help, please don’t hesitate to reach out to us. Contact our team at Park Avenue Property Management. We work in Lake Buena Vista, Orlando, Kissimmee, Celebration, Maitland, Altamonte Springs, West Palm Beach, Tampa Bay, and throughout central Florida.