Tenant Screening 101: How To Get An Ideal Renter

Wednesday, July 5, 2017, 6:00 AM | Leave Comment

Unless you have a rare talent of predicting the future, you would agree that it’s never possible to tell if someone is going to make a great or a delinquent tenant simply from a short interview.

And although some experienced landlords might say that they’ve developed some kind of a gut feeling helping them distinguish the good from the bad, the truth is that they are at risk of stumbling upon frauds or unfaithful tenants just like you, me, or any other first-time landlord.

But it doesn’t necessarily mean you should give up on rental business: there is a tried-and-true way to minimize your risks.

At the point of application, a thorough tenant screening is exactly what you should be focused on.

A study conducted by Experian revealed that 7.33 percent of all tenants using their service are identified as bad because of their outstanding balance, debt collection, or a broken-lease-history.

To put it differently, you absolutely need to become a tenant screening guru before trusting your property in the hands of someone you barely know.

Ready to learn?

There are plenty of things a comprehensive tenant screening can reveal, but you should be geared towards the following questions:

  • Whether an applicant can afford your property?

  • Whether a potential prospect is worth your trust?

  • Whether this person is going to keep your home in a good condition?

In nearly all cases, it takes three separate procedure to get those questions answered. Find a detailed guide on each one below.

  • Check Your Prospect’s Credit Score

    The long-term rent is not a one-time deal. When signing a lease, you are stepping into the lasting business relationships with money issues involved.

    That is why you need to make sure that your prospects are going to pay rent on time and in full every month.

    So far, running a credit check is the best way to get this information. Of course, people are more than the 3-digits numbers of their credit scores, but it doesn’t make those scores less informative.

    Running a credit check helps you find out one’s payment history and it’s length, records of bankruptcy (if there are any), credit limits, loan amounts, and more.

    A standard FICO credit score, which is most commonly used in property management business, is calculated based on a person’s payment history (35%), amounts owed (30%), length of credit history (15%), credit mix and new credit (10% for each one). In fine, this score is meant to assess one’s financial health.

  • Run a Background Check

    The second part of a tenant screening is background check. This one can also help you minimize the risks associated with renting your property out.

    There are variations of background checks you can run, but in nearly all cases they’ll consist of a person’s rental history, employment history, and criminal records (this one typically includes information on one’s arrests, court records, sex offences, incarceration records, warrants, and convictions of felonies).

    Speaking of employment and rental records, these parts of a background check can reveal a person’s past evictions, broken rental agreements, stability of a career and income.

    It might sound like a hint at an obvious, but a background check can protect you from renting out to people who are either dangerous or not worthy of your trust.

    Chances are good that you wouldn’t want to rent out to someone who’s been previously arrested for a felony or an armed attack.

    You might also not like the idea of signing a lease with someone who doesn’t have even a trace of a stable career.

  • Conduct a Personal Interview

    When both credit and background checks are completed, there is still one critical thing to do.

    From time to time, even the most detailed reports fail to reveal something that gets obvious after 10 minutes of a face-to-face talk.

    That’s why you should end any tenant screening with a personal meeting (Skype interview is also up for the task).

    Since the long-term rental means lasting business relationships with someone you barely know, it’s important to make sure that both you and your prospects sing from the same hymnbook.

    If you find it hard to come up with a list of questions to ask, feel free to use this time-proved questionnaire:

    • Why are you looking for a property to rent?

    • Do you have recommendations from your previous landlord or current employer?

    • How soon would you like to move in?

    • What’s your monthly income?

    • Are you ready to pay a monthly rent and security deposit in advance?

    • Have you ever been evicted before? (In case of a positive response, ask for details)

    • Do you have a tenant’s insurance?

    • Will there be any roommates or just you?

    • Briefly describe your lifestyle.

    In most cases, these questions can help you learn all you need to know as a landlord. However, asking the right questions is only half the job.

    You should also know what kind of responses are acceptable and what should be considered as red flags.

    In fact, you can significantly benefit from paying attention to both verbal and nonverbal parts of communication.

    Body language experts believe that what we say is less important than how we say it, so be observant and never ignore the signs of anxiety and fear.

  • Getting Ideal Renters is Possible

    The chances of getting ideal renters double when you know how to screen potential tenants.

    And since you made it to the end of the article, it’s time to heave a sigh of relief.

    Armed with knowledge, you can make an educated choice among applicants and build lasting relationships with those chosen.

Author’s BIO

The writer by calling, Oksana Tunikova creates remarkable content for Rentberry. Being well-versed in the real estate, she writes for the company’s blog and creates guest articles that sound educational and entertaining at one time. Oksana’s passion is to help businesses get noticed through high quality content.

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