To sift through bad tenants and fill your units with great ones, you need to conduct in-depth tenant screening.
Tenant screening reduces evictions, minimizes tenant turnover, and saves you from other hassles that come with low-quality tenants.
Many landlords these days choose to use property management software because it provides plenty of tenant screening tools, such as credit, eviction, and criminal background reports. While property management simplifies the process, it’s ultimately up to you to know the strategies for properly screening tenants.
Here are four tenant screening strategies that will lead to the best results:
- Use Passive Screening
Typically when we talk about tenant screening, we’re talking about active screening. This is the process of rejecting bad applicants and accepting good ones.
Passive screening takes place earlier. This is the process of targeting specific kinds of renters when you market your property. By using passive screening, you’re more likely to receive applications from tenants who meet your standards.
For instance, when you market your property, clearly presenting the price of rent will attract tenants who are looking for units in that price range. It will also discourage those who can’t afford your rent from applying. Your listings should be clear on other information renters will consider as well, such as amenities, smoking policies, and pet policies.
- Make a Rental Application
While credit reports, criminal records, and eviction history checks are important resources to use when deciding whether a tenant is qualified, you don’t want these reports to be your only criteria. A thorough rental application allows you to ask tenants about themselves directly. This gives you information about them that you otherwise wouldn’t have access to. You should ask about:
- Employment history
- Proof of income
- Residence history
- List of references
- Pet ownership
- Smoking habits
This information can help you weed out tenants before you spend time on credit reports and background checks.
Furthermore, you should always reach out to references that an applicant provides. Employers and landlords will be able to verify details on housing and employment. Previous landlords are also in a unique position to tell you about someone’s rental habits.
- Know Fair Housing Laws
The Federal Fair Housing Act was created to protect certain protected classes against housing discrimination. These classes are as follows:
- Race
- Color
- Religion
- National Origin
- Sex
- Familial Status
- Disability
It’s important to note that these are the classes protected at the federal level. State and local laws may exist to extend protection to categories such as sexual orientation, age, marital status, veteran status, citizenship, etc.
A fair housing lawsuit can cost you tens of thousands of dollars, so it’s important to be familiar with all the factors that may affect your business. Consulting a local legal professional who can explain the laws in your area is a good idea.
- Stick to a Tenant Scoring System
Even if you aren’t intentionally discriminating against an applicant, you want to make sure you can prove that you’re evaluating each tenant in the same way. This is one of the reasons you should create a tenant scoring system.
A tenant scoring system allows you to compare applicants objectively by creating a list of criteria that meet your standards and evaluating which criteria a tenant meets. These criteria should relate to credit history, income, eviction history, criminal background, etc. Be certain that none of the criteria pertain to the classes protected by fair housing laws.
It’s crucial that you evaluate each applicant in the same way and that you keep records in case you get accused of discrimination. Beyond protecting you legally, a tenant scoring system also helps you objectively determine whether an applicant is qualified. In the case of multiple applicants, it helps you objectively determine the most qualified person.
Conclusion
Tenant screening is one of the most important processes in rental management. Great tenants consistently pay rent on time and respect your property, whereas bad ones can lead to costly evictions. Knowing the best strategies to conduct proper tenant screening will save you time, money, and headaches.