As a landlord or property manager, it’s essential to screen prospective tenants carefully to ensure that you’re renting to responsible and reliable individuals. Unfortunately, there are many scams out there that aim to take advantage of landlords, and it’s important to be aware of them to protect yourself and your property. In this piece, we will explore strategies for effectively screening potential renters and avoiding fraud in the rental process. This will include information on tenant screening services, as well as the role of property management software in the screening process.
How to screen potential renters?
One of the first things you should do when screening prospective tenants is to check their credit and criminal history. This can help you to identify any red flags that may indicate a tenant is not reliable or trustworthy. You can use tenant screening services to obtain this information, which typically involves a credit check, background check, and eviction history check. These services can be especially useful for landlords who are renting to tenants for the first time or who have had a bad experience with a tenant in the past.
Another effective way to screen prospective tenants is to ask for references from previous landlords. This can provide valuable insight into the tenant’s rental history, including how they treated the property, whether they paid their rent on time, and whether they caused any problems. Additionally, you can also ask for personal references, such as friends or family members, to help you get a better sense of the tenant’s character and reliability.
What is a tenant background check?
A tenant background check is an important step in the process of finding a suitable tenant for a rental property. A tenant background check helps landlords and property managers evaluate the creditworthiness and overall suitability of potential tenants.
There are several types of information that may be included in a tenant background check.
- Credit history: This includes information about the tenant’s credit score, credit report, and any outstanding debts or collections. Landlords and property managers use this information to assess the tenant’s ability to pay rent on time.
- Criminal history: This includes information about any criminal convictions or arrests the tenant has had. Landlords and property managers use this information to assess the tenant’s overall risk of committing a crime or causing harm to other tenants or the property.
- Employment and income: This includes information about the tenant’s current and past employment, as well as their income. Landlords and property managers use this information to assess the tenant’s ability to pay rent and maintain the property.
- Rental history: This includes information about the tenant’s past rental experiences, such as how long they lived in each rental and whether they paid rent on time. Landlords and property managers use this information to assess the tenant’s overall suitability as a renter.
Tenant background checks can be conducted by the landlord or property manager themselves, or they can be outsourced to a professional tenant screening service. These screening services will typically conduct the credit, criminal, and rental history checks on the tenant’s behalf, and provide the landlord or property manager with a report on the results.
It’s important to note that there are certain legal restrictions around tenant background checks in some states. For example, the Fair Credit Reporting Act (FCRA) regulates how credit reports can be used in tenant screening. There are also restrictions on the types of criminal history that can be considered, such as laws around Ban the Box, which prohibits employers and landlords from asking about criminal history on the initial job or rental application.
By using tenant screening services or property management software, landlords and property managers can more effectively screen potential tenants and avoid scams. This can help to reduce the risk of financial loss and minimize the chances of dealing with problem tenants.
How property management software can help you to screen potential tenants?
Property management software can also help you to screen prospective tenants. Many software platforms provide built-in tenant screening functionality, which can help you to automate the screening process and make it more efficient. For example, you can use the software to request and review credit reports, background checks, and eviction history. Additionally, you can also use the software to communicate with prospective tenants, track their progress through the screening process, and make a decision about whether to approve or deny their application.
Common red flags
When it comes to avoiding scams, it’s essential to be aware of common red flags. For example, be wary of tenants who are eager to move in before you have completed the screening process or who are unwilling to provide any references or documentation. Additionally, be cautious of tenants who are offering to pay more than the asking rent or who are offering to pay in cash.
These are all signs that something may be amiss, and you should proceed with caution.
Finally, it’s essential to remember that the screening process is not only about avoiding scams but also about finding the right tenant for your property. A good tenant will take care of your property, pay their rent on time, and cause minimal disruptions. So, it’s important to be thorough in your screening process and to take the time to evaluate all of the information you have gathered before making a final decision.
I must disagree right from the start: you state that “One of the first things you should do when screening prospective tenants is to check their credit,” but this is not possible until you have a Social Security number, and that is only available AFTER a tenant has completed an application. Tenant screening MUST begin on the phone, before a tenant sets foot in your property, which can lead to a lot of showing to people you will never rent to. We use screening questions on the phone, and it eliminates 75% of those who are interested.
Secondly, you mention screening services: these are not foolproof. These services can only use publicly available data, and if a previous landlord evicted a tenant with a legal filing, there will be no record for the screening service to find and report.
In your section about criminal history, you fail to mention that only convictions may be considered, not arrests. And it is imperative landlords have a clear Criminal History policy they can use to block those applicants with certain criminal histories. The law is clear, and HUD recommends landlords have a uniform criminal history policy.
Finally, you miss the most critical function of screening: to find a tenant with the best character. It is those human qualities that make up a person we are evaluating: consideration, reliability, integrity, and good communication skills. These are what the screening services can help you see, but talking with a prospective tenant on the phone can also help a landlord begin to unravel the mysteries of the prospect: who they are suggest how they will act in your property-will they pay on time, will they wreck or protect your property.