Placing a tenant can be a difficult and nerve-wrecking task. There are so many things that can go wrong by placing the wrong tenant into your property. Evictions, court costs, damages and collections can add up well into the $1000s. Knowing how to screen a tenant and following these steps can help alleviate the risks involved with getting a bad tenant.
Before you Screen a Tenant you should know your Requirements
You should make sure you know your requirements. Before you even advertise your property, consider what you want in a tenant. Remember you would be dealing with this person for the extent of the lease. Write down what you want and don’t want in a tenant. Do you want smokers on your property? Pets? What are your income requirement? Once you have a good grasp on what you are looking for, you should now advertise your property and move on to the next step. Check out some of our tenant requirements on our Rental Guidelines page.
Pre-Screen your Tenants
Once you start advertising your property, you will start receiving phone calls from prospective tenants. Now that you know your requirements, start asking questions as the prospects call in. Simple questions that can be used in your conversations, such as reasons for moving, pets and current employment. If the prospect does not meet your criteria, you can save a lot of time and money by letting them know they are not the right fit. Think about the time you will save in not having to show the property to someone who doesn’t meet your requirements. This is a key step in knowing how to screen a tenant.
*When asking questions, even over the phone, be sure to follow all laws. Remember, even a self-managing landlord is governed by State and Federal laws, including the Fair Housing Act.
Before you Screen a Tenant you should Create an Application
You can create a rental application yourself, or find one online. This is a very important step in placing a tenant. The application will help you decide on placing the right tenant. Focus on items such as employment history, address history, evictions, bankruptcies etc.
Ask for name, date of birth, social security numbers and addresses, you will need this for the next step.
*Please ensure that you adhere to all applicable State and Federal Laws. Not doing so, can land you in a lot of trouble.
Verify the Application
You’ve asked all the right questions and gotten your answers, what do you do now? Pick up the phone and verify as much of the submitted information as you can. Call previous landlords to ensure that the prospective tenant has a history of on-time payments and no evictions. Look up the stated employer, verify that the phone number is for the stated employer and call them. Verify that the prospect currently works there.
Run a Background Check
With the information you collected in the application, you can now run a credit and criminal background check. Remember, you need to disclose and get approval to run these from the prospective tenant. You can easily ask for consent on your application. Remember, credit checks can change a credit score. A quick search online can give you many companies that can run a background and criminal check. At All County Alliance, our background checks include terrorist watch-list verification and rental history. We submit every applicant to one of the industry’s most in-depth background checks, and is one of the many features we are extremely proud of! Remember you can charge a fee for having to run a background check. Do some research of the cost in your area.
Place the Tenant
Now that you have completed the application, verification and ran a background check, go through the results. Look for red flags like an unanswered question on your application or answers that don’t match up to the background checks. Did your application ask about evictions and the prospect answered no, but the background check says otherwise? If this happens, immediately start looking for another prospective tenant. If everything looks great, and you know you have found the right tenant, get ready for the lease signing!
Make sure you have a solid lease. Speak to a Real Estate attorney or All County Alliance to discuss. Be careful of the leases you can download online.
Now you know how to screen a tenant, but remember, before you do anything, know the laws. Fair Housing Laws, the Fair Credit Reporting Act and many other State and Federal laws can be very unforgiving. If you are uncomfortable in knowing what you can and can’t do, say or ask as a landlord, consider hiring a professional Property Management company like us! Court costs and lawsuits would be way more expensive than hiring a professional.