As landlords, we all perform some type of tenant screening, it can be as simple as skimming the rental application to a more extensive look with credit and criminal reports ran using a company such as Rentec Direct’s tenant screening. It is important to use the best process available to screen your tenants to protect your real estate investment as well as your sanity. Statistics have shown that even though landlords actively screen tenants, they often don’t take enough precaution to mitigate risk. There is always risk of getting a bad tenant or a tenant who defaults on there lease. Following a protocol when screening tenants is a great way to ensure that the same precautions are taken no matter what the underlying circumstances might be.
The application should include name, address, social security number, date of birth, two most recent addresses, employment history, as well as up to date contact information for the; applicant’s, current landlord, and their employer. All adult applicants applying to reside at the residence need to provide this information. Another important piece that the application should include is a form that clearly states that the prospective tenants consent to the tenant screening checks.
- Watch out situation: Fraud
Prospective tenants who don’t want you to know some piece of information about them are pretty savvy about hiding or misrepresenting the truth. For instance, criminal records are linked to an individual by name and date of birth. So an applicant may use a maiden name or omit some of the needed information. In addition, eviction data is linked to an individual by name and address. It can be difficult to determine if someone with a common name (John Smith) is the one with the criminal record without also having a social security number or date of birth. These fraudulent applicants have become fairly clever at misstating or omitting information to try and pass a tenant check so be sure you get all of the needed information and.
The Tenant Screening
So, you’ve completed your nationwide criminal, inmate, eviction, and sex offender search, SSN validation, previous address search, and pulled their credit report with FICO score. You now know a lot of information about the person who wants to live in your rental property. Having an established and written tenant screening criteria is essential. Having the criteria written out will not only help you from wavering in your decision making but will also protect you from potential claims of discrimination or differential treatment. Decisions need to be based with fairness and equal opportunity regulations in mind.
- Watch out situation: Lack of applicants
Your tenant screening criteria should not change with the seasons or waiver based on an applicants claims or set of circumstances, real or fabricated. It’s widely recognized that it is much easier to find a good tenant in June or July versus December because there are a lot more prospective tenants to choose from. The screening criteria should be a year-round commitment, the consequences in the form of a default or eviction could be realized.
Tenant screening is arguably the most important part of the leasing process. So much can go wrong if this is not done right. Great post sharing the facts.
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