According to research, the tenant screening services industry will reach a value of $5.3 billion by 2030. But, what is tenant screening?
Also known as tenant check, it's the process involved in background checks on potential renters' history to determine their ability to pay rent.
Among the important aspects of property management for landlords is finding high-quality tenants. So, hiring a property manager who can apply helpful tenant screening tips is essential.
The tenant screening process can be time-consuming and exhausting. Sometimes, landlords get tempted to compromise on the process to have the vacancies in their rentals occupied.
Read on to learn the top tenant screening mistakes to avoid.
Not Requesting Proof of Income
Having proof of income can help you identify potential renters who can pay rent on time monthly. Failing to ask for proof of income from your potential tenant will cause problems in the future.
You can request your renter for their pay stubs, bank account statement, or letter from the employer. Besides, check the employment history of your prospective tenant.
Be sure to find out your tenant's salary and if they can meet your minimum income requirements. You should ensure your tenant's income is at least thrice the required rent amount.
Failure to Check References
Property managers require tenants to provide references during the screening process. However, you must follow up to ensure these references are legit and get quality tenants.
Unfortunately, some landlords don't contact these references to verify the applicant's provided information. You should ask for employment and previous landlords' references in your screening process.
Ensure you get references from at least two of your tenant’s most recent landlords. This measure will help you get the most up-to-date account for your potential tenant.
Not Providing Rental Application Forms
It’s essential to provide tenants with a rental application form before you can allow them into your rentals. In the application, a new tenant will provide their consent for you to perform a tenant background check.
This may include running credit reports and checking with former landlord references. A rental application will also require that your tenant swears an oath.
Taking the oath allows the renter to confirm that the information provided is complete, accurate, and truthful.
Failure to Abide by Housing Laws
Violating your tenant's Human Rights Code is punishable by law and can cost you a lot with unending lawsuits. Further, it doesn’t make any sense to discriminate against a group of people from a business point of view.
It’s essential to treat all demographic equally during the tenant screening process. The only parameters you should have are for qualified tenants and those that are not.
Not Interviewing Potential Renters
After your tenant submits their application and gets verified, take a step further and conduct a phone interview. Interviewing your candidates helps you understand what the tenant is looking for.
Besides, it saves you the time you'd have used to show a candidate that's not a good fit for your rentals. For instance, a candidate may be looking for a short-term place to rent, whereas you may be searching for a long-term lease. That way, you know that the specific tenant isn't for you.
Tenant Screening Guide
Tenant screening is important to you in finding reliable and quality tenants. So, don’t compromise just because you want your rental property fully occupied.
Consult with your property manager about the tenant screening costs. Ensure that you find a reputable and affordable property management company for your needs.
Contact us for more tenant screening tips for you.