The Importance of Tenant Screening

Tenant Screening is the most important function a manager can perform when considering a potential tenant for a property.
It happens often that a landlord who wants to turn the upcoming vacancy over quickly will take an application and skip the screening step.  Many people feel that they are able to judge a book by its cover but this could lead to problems going forward. A good tenant screening tool will get an accurate credit history, an criminal history, sexual predator data, homeland security listings and verify identity. 

One type of history which all owners and managers want to see is the eviction report.  Unfortunately, in most states evictions are not made public.  So there is precious little data available for evictions.  We have heard a rumor about a new site which is beginning to collect data state by state, but it will take several years to have a data base which is reliable.  We will keep you posted when we feel it is ready to be useful and will likely add this option to our site at Smart Property Systems for additional screening.

Since 2008, many normally upstanding citizens have had their livelihoods decimated and have even lost their homes.  So in 2012, we managers and owners need to look carefully at credit history to read between the lines.  We are seeing credit histories which used to be stellar, come back as marginal.  To be able to rent to this type of individual will take a bit more digging.  You should get the employers name and the previous landlord/manager’s name. Then call and verify with each that this person is working and did live where they said.  Some previous landlord/managers will even give you a recommendation as to whether they were good tenants and paid rent on time or not.

We believe that you should screen every tenant who is going to live in the unit and who is over 18.  Remember you are building the neighborhood when you choose your tenants. You are also protecting your property.  One bad apple can spoil the whole pie. 

A little tip for better screening results is to require the tenant to use his/her first, middle and last name on the application.  This helps to narrow the screening results and limit the possibility of getting wrong information because the person has a common name, like Joe Smith.  When a tenant fills out the screening application, on our screening tool, the first few questions will verify the applicant’s identity.  If they fill this portion of the application out wrong, they cannot be verified.  When that happens, they are then blocked from the application for at least 72 hours and are required to fax in supporting documents to the credit union.  This protects you from fraud.  But it also slows the process down.  Of course if you still have a tenant in the unit, this is not so important. But if your property is empty and ready for a tenant, I suggest that you explain to your prospective tenant that if the screening is paused because of the verification issues, and they are not cleared up that day, that you reserve the right to screen other applicants while you wait for their screening.  If you are lucky enough to have several applicants for the same property, in this way, you have the chance to cut down on the turn-over time. Our experience has been that most people can verify their identity quickly and do turn out to be good tenants.

The importance of tenant screening cannot be overstated.  It is your best protection from fraud, property damage, tenants who cannot pay rent and disrespectful tenants.