According to the results of a 2014 survey, conducted by TransUnion Rental Screening Solutions and published by My Smart Move, non-payment of rent is the #1 concern among 84% landlords. This concern was followed by the renter’s prior eviction history, prior criminal history and providing fraudulent information on the application form.
Compared to any other point in the last 50 years, the US is witnessing an increase in the number of people renting in recent times. So, if you own property that you are willing to give out on rent, this could be a good time. The reason why many hesitate to do so is the concerns mentioned above. However, if you enlist the services of a skilled and experienced real estate agent and property manager, being a landlord could be quite stress-free.
Most people believe their gut feelings about someone they meet for the first time. However, the reality is that appearances can be deceiving and only rigorous checks of a potential tenant’s background can put your mind at ease about leasing out your property.
Tenant screening is a crucial and non-negotiable process, which can be conducted on your behalf by the real estate agent, so that you only get to meet the most suitable applicants, while potential problem makers are weeded out.
Here’s a look at what all to keep in mind while screening rent applications.
What to Screen For
This part of the process can be easily taken care of for you by your property manager. The key areas that they will screen for include:
- Work history
- Criminal background
- Current income
- Credit history
- Eviction history
This way, you only need to interview the people who pass the screening process with flying colors, saving you both time and effort.
To avoid ending up with tenants with a background of felony, it is really important that you put some conditions to the renting process. In your tenant requirements, mention that you will run a credit and background check for any kind of criminal history.
Tenants who are have any questionable history might fear that you will uncover some hidden issues, hence, are more likely to avoid applying in the first place.
To know more about the tenants who do apply, the first place to start screening is there social media profiles. By checking on Facebook, Instagram or Twitter, you can gain insight into their values and conduct.
Don’t Forget a Credit Check
Property owners should know that the three credit bureaus allow them to pull out credit reports of potential tenants as a part of the tenant screening process. There are many property management services that offer this service at a reasonable fee. Any kind of warning signs in the credit report, especially delays in paying off credit card debt, home loan or any other significant outstanding debt should be taken seriously. These could be red flags that the tenant might not pay the rent on time or even default.
Run Criminal Background Checks
Criminal background checks are one of the most important steps in the tenant screening process. However, you cannot actually deny housing to a tenant having a criminal history. The Department of Housing and Urban Development (HUD) prohibits people from refusing to sell or rent a home to someone on the basis of their race, color, religion, sex or national origin, subject to the Fair Housing Act of 1968. This Act also mandates that people cannot deny housing to applicants with an arrest record without a conviction.
It is really important that you check on the type of offense/s, when they were committed and the seriousness of the crime to make an informed decision.
Applicants who have been convicted of crimes such as rape, child molestation or assault, or drug dealing, should be rejected right away, since they can put the neighbourhood at risk. While running a background check, also make sure that they do not have any history of eviction.
Screening potential tenants might be an effort and time intensive process, but it can make the difference between having a good tenant and regretting at leisure, later on. You are not only compromising your property and rental income but putting your neighborhood’s safety at risk.