Screening your tenants is crucial, but it can also be a significantly challenging task. Challenging because your ultimate decision to accept or reject a rental application depends on the results of the tenant screening tests. Thus, to maximize the potential of your investment in the property, you would need to attract responsible and reliable tenants that fulfill their rental obligations on time and also pay you a justified rental cost. Screening tenants helps you identify credible renters when you list room for rent and ensures your rental property goes to renters who genuinely care for the property.
The demand for tenant screening has spiked in America, contributing to the global market for tenant screening value up to $5.3 billion until 2028, with an average annual growth rate of 7.6%. Data also reveals that almost 90% of landlords screen tenants based on their previous evictions, rental history, background checks, and credit scores. It underscores the significance of tenant screening and points out a crucial need to frame a strategic checklist that will help in tenant screening. So, if you are a landlord looking forward to listing a rental property, here are a few easy steps you must follow.
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Frame an Effective Rental Application Process
The start of effective tenant screening must begin with the framing of an exhaustive rental application process. Ensure you frame the process considering the fulfillment of local legal laws. Make a checklist of all the factors you must consider while accepting or rejecting a tenant application form. Accordingly, draw the rental application process based on each factor’s gravity.
The process should include mainly authorization for background checks, asking for relevant personal information, and running a few pre-screening tests. You may also ask for a nominal application fee and establish a prompt process for verifying the documents received. Prepare a sequential flowchart of the process so you do not miss any measure in productive tenant screening.
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Run a Check on Background and Credit Reports
Once you establish a standard rental application process and list a room for rent, you will receive multiple applications from interested tenants. Run a thorough background check, especially checking the applicants’ criminal history. It is paramount to the safety of your property and fellow tenants.
If you observe applications not aligning with the tenancy requirements, you may reject those. Also, ask for credit reports giving complete information on rental payment history, and if you identify any red flags, avoid accepting the application. Credit reports help you assess whether the applicant has met all rental obligations in the past, is on time while making payments, and is a responsible individual.
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Evaluate Credibility Based on Income and Employment
After running background and credit checks, now evaluate the credibility of interested applicants based on their income and employment history. You must ensure whether an applicant is credible based on their employment status. Assess their responsible individuality by checking whether they have met their tax obligations on time.
Income verification will give you an idea of whether the applicant has an established and regular source of income, ensuring sufficient funds for regular rental payments. Thus, income and employment verification ensures your rental property goes to a reliable renter who can make all the payments on time, establishing a harmonious relationship with you.
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Check Previous Rental Experience and Eviction History
Check potential renters’ previous rental history and experience in your tenant screening process. It will draw a clear picture of their behavior as a responsible tenant. You must also ask for references of past landlords from the interested tenants. If the tenant has a regular negative rental experience, avoid accepting such applications during tenant screening.
Also, look out for the eviction history of interested tenants. It may reveal reasons for their previous rejections, highlighting information to help you assess and decide whether to accept such rental applications. All this ensures a risk-free lease agreement.
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Verify References
Ask all applicants to provide a personal and professional reference as part of the tenant screening process. If they have been living in a rental property before, ask for references from previous landlords. It will highlight much information about the potential tenant’s character, rental habits, and credibility.
Contacting and talking to the references will aid in cross-verifying the information in the rental application and establishing the tenant’s compatibility with rental requirements. Verifying references contributes to making well-informed decisions, minimizing the risk of potential conflicts.
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Interview Rental Applicants
Although you may follow an online rental application process, tenant screening demands face-to-face interviews with rental applicants. It helps gauge their overall demeanor, professionalism, compatibility with rental requirements, and enthusiasm for the rental property. Interviews taken personally offer information way beyond paper applications and will also help you address your concerns and queries, if any, in person with the potential tenant.
You may discuss the terms and conditions of the lease with the interested applicants and check whether they are ready to adhere to the rental requisites. Effective interviews with potential tenants help establish a positive environment and ensure mutual benefits and a favorable renting experience for both parties.
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Accept or Reject the Applications Post-Screening
After shortlisting a few credible rental applications, it is time to accept the ones that appear genuine. Post-screening of all applications, thoroughly evaluate them based on the above-mentioned factors.
Communicate the rejection respectfully for rejected applications, following respective fair housing regulations. Communicate your acceptance to relevant tenants on time and establish quick contact. This approach reflects your professionalism as a landlord and makes tenants consider your property on priority.
Conclusion
If you are looking forward to listing rental property, ensure a detailed screening process is ready. When you put up the ‘Up for Lease’ sign on your property, expect to get calls and emails for inquiries. At this point, you must circulate a comprehensive rental application form to all interested parties and initiate the screening process. Timely initiation and completion of the screening process guarantees a pool of responsible and reliable tenants. It enhances your network in the rental market and promises to fill up vacant rental properties soon. So, if you have been facing issues with finding an appropriate tenant, try the above screening process and observe the results yourself!
