Tenant Screening
Any seasoned landlord will accept that Tenant screening is one of the most important steps to ensure they get qualified Tenants and protect their properties. Landlords should conduct background checks for every prospective Tenant to ensure they are the right fit for their property. Though it is an extra step, the importance of tenant screening should not be discounted; it helps avoid unnecessary property damage, and reduces rent payment delinquency, and other disruptions.
Tenant screening helps landlords identify red flags by checking prospective Tenant credit scores, and identify verification, employment status, and other concerns. Why is it important? Ask any property owner or manager who’s had to deal with a delinquent Tenant about the hassles of processing an eviction and having to involve law enforcement professionals to conduct a physical eviction. To avoid such circumstances, you must recognize the benefits of tenant screening and be diligent about performing such for each and every prospective Tenant.
Tenant screening helps you maintain good relations with other occupants since they feel you are taking the right steps to ensure their fellow tenants are qualified, this helps you lower your vacancy rate due to lower turnover. A Tenant is like a house guest who will inhabit your premises and be responsible for caring for your house. If you do not find the right person, you might have a bitter experience.
This blog will help new Landlords to understand the benefits of Tenant screening and their importance.
What Type of Tenant Screening Does a Landlord Need?
Just filling a vacancy with anyone is not enough; you must find law-abiding, financially solvent people. Imagine if you have multiple tenants who regularly play loud music late at night and regularly throw loud parties. Other renters may start complaining and even give notice to vacate. This is unfavorable, favorable is filling your property with renters who can live amicably with each other. This leads to maximizing rent and stabilizing cash flow. As a Landlord you will experience lower stress because your happy tenants will tend to stay longer and the return on your investment is maximized.
To screen a Tenant, you can conduct different processes, and the best one varies depending on your needs and preferences. These may include credit checks, criminal background checks, and/or income and employment verification. At Summerfield Property Management we advocate that our Landlords utilize a service that conducts all of them. If you receive a screening along these lines, you will receive a report with the following information:
Credit History:
It states whether the Tenant has a history of late payments, bankruptcies, or financial red flags.
Criminal history: It shows if the Tenant has a previous criminal record that may put your property or other tenants at risk.
Employment and Income Verification:
It indicates whether the Tenant has a steady income source and can pay their rent on time.
Rental History:
It depicts if the Tenant has a history of lease violation, received an eviction notice, or has been evicted.
What are the Benefits of Tenant Screening?
Reduces Liability
Screening a prospective Tenant helps ensure you do not allow people to live at your property that hurt other Tenants where you might be held liable.
Reduces Crime
Property crime costs landlords and property managers several thousand dollars every year. Tenant screening helps you reduce this risk by not allowing people to live on the property who are prone to commit crimes.
Minimize Rent Loss
Screening ensures you get the best possible tenants who will pay their rent on time without hassle and hopefully stay at the property for a long time.
Increase Monthly Rental Income
If you are looking for ways to increase rental income, Tenant screening is a must. It helps you bring together the right blend of tenants who enjoy living as a community, which makes them more willing to pay a higher rent.
Reduce Stress
A proper screening process ensures you find suitable candidates for your property. It helps reduce stress since you experience fewer hassles.
How to Choose a Tenant Screening Service?
It is essential you choose a quality screening service. They are experts in the field and have the ability to source the necessary information to properly screen a prospective Tenant. We recommend you consider the following,
1. Read Customer Reviews: Most screening services provide their service online, so you can easily find their client reviews to see if they have satisfied customers.
2. Compare prices: No need to pay more for the equivalent service.
3. Data Source Verification: It is important to know if the data sources are authentic. Inaccurate data can lead to wrong conclusions.
Tenant Screening: Conclusion
Our Landlords invest in rental property to earn as much money as possible with the least amount of hassles. Almost all seasoned landlords know the importance of tenant screening. Partnering with the right management company goes a long way to ensuring you have proper screening. If you use third-party management Summerfield Management would love to discuss partnering with you. We have years of expertise in providing end-to-end property management services.
Tenant Screening: FAQs
Q: What type of discrimination is not allowed while choosing tenants?
A: At the Federal level Federal Fair Housing Laws, make it illegal to discriminate on the grounds of race or color, national origin, religion, sex (including gender identity and sexual orientation), familial status, or disability. In addition, certain states have additional grounds above and beyond the Federal level.
Q: What is the best process for Tenant screening?
A: You have the prospective tenant fill out a written rental application form that outlines employment, income, credit history, social security number, driver’s license number, past evictions, criminal offenses, and references. You then send this information to your reputable screening service who then provide a screening report.
Q: Can I refuse a Tenant who does not provide a valid Social Security number?
A: Yes, unless they provide an alternate piece of identification equal to a social security number (SSN). The IRS allows non-citizens who may be on a visitor or student visa to obtain an individual taxpayer identification number (TIN) if they expect to earn an income say from an on-campus job and will owe income taxes. If an individual provides their TIN during the Tenant screening process and it provides accurate background details, you cannot refuse the candidate because they don’t have an SSN.
