Tenant screening is an essential way to ensure tenants are reliable enough to maintain a property and pay rent on time. It's an essential process, but it can be long and tedious without help.
According to the Rental Housing Journal, approximately 8% of landlords skip it entirely. That leaves their doors open to unreliable tenants and could cause them to lose out on the best ones.
Why Do Landlords Screen Tenants?
Proper tenant screening does more than help you sort through applications. It's essential to protect your livelihood.
Renting to the right tenant keeps consistent income flowing in. It protects the property and improves its reputation. You'll also save money on maintenance and turnover costs.
Renting to the wrong one can cause a host of issues, such as:
- Loss of income
- Property damage
- Legal issues
- Evictions
How the Screening Process Works
The tenant screening process starts when an application comes in. Interviews and background checks help give you a full picture of whether they're the right choice.
Pre-Screening
Pre-screening is a way to ensure you find reliable tenants before you perform any type of background checks on them. It weeds out candidates. You don't have to spend time working them through the rest of the screening process.
A clear listing and well-written application do the heavy lifting in this part of the process. Set clear application criteria and outline your policies on smoking and pets. Applicants who don't meet these criteria are likely to move on to the next listing. If they don't, you can point out clear reasons why they don't meet the criteria.
Conduct an Interview
Meet the applicant in person. Ask them questions such as why they're moving and what they expect from the new apartment. You'll get a sense of how they'll communicate with you.
Call References and Landlords
Most renters have rented before, so ask for contact information from previous landlords.
You should also ask for other references who can speak for their character. These could be from:
- Employers
- Coworkers
- Mentors
Verify the quality of these references before you call them. Check that they're legitimate and not one of the applicants' family members doing them a favor.
Complete Background Checks
A tenant background check goes far beyond a criminal record check. There are several other checks to perform that are equally important.
One of the most important is a credit check. Make sure that their credit score and history meet your requirements. Issues such as consistent failure to pay bills can show up here.
Run a check on their employment history and do an income check. You can ask for:
- Pay stubs
- Checks from the applicant's boss
- Tax returns
Eviction and rental histories give you more information about their behavior in previous rentals. It can back up or contradict the information you received from interviewing their past landlords.
What Are Considered Red Flags in Screening a Tenant?
One of the most significant red flags is a refusal to consent to background checks. It indicates an attempt to hide information.
Dishonesty during the screening process is also a major problem. Misinformation can come up on the application or during interviews, and these attempts to mislead you shouldn't be taken lightly.
An incomplete application is also a major red flag. It leaves you without important information and shows a lack of interest in the property.
Then, there's the information found from the actual background checks. Quality, long-term tenants are the goal, so beware of any applicants who move often. Unstable income or employment might make it difficult for tenants to reliably pay rent.
How to Legally Approve or Deny Tenants
When screening tenants, be careful not to disobey theFair Housing Law. You can't accept or deny them based on protected classes, such as:
- Race
- Color
- Gender
- Sexual orientation
- Familial status
- Origin
- Disability
- Religion
That isn't the only law to keep in mind during tenant screening. There's another major federal regulation that regulates the entire process.
TheFair Credit Reporting Act says that you have to inform applicants about what background checks you're doing and get written permission.
When you deny a tenant, you need to send them an adverse action notice. It needs to explain to them what you found in your background check and why it made you decide against them. You also need to let them know about their right to dispute it.
Hiring a Property Manager for Tenant Screening
Hiring a property manager makes the screening process quick and simple. They'll perform all the necessary checks for you. Vacancies and turnover times will shrink. You'll get the best possible tenants and a continual income stream.
Property managers also protect you from legal liability. They understand the intricacies of state and federal codes.
Frequently Asked Questions
How Far Do Most Background Checks Go Back?
California Civil Code 1786.18(a)(7) addresses this issue. It says criminal background checks can only look at criminal convictions from up to seven years ago. Anything further back than that won't show up in a criminal background check.
Arrests that didn't lead to a conviction can't be used at all. They're not considered part of an applicant's criminal record.
What Do Landlords Have to Do Between Tenants?
Screening is only one of your responsibilities when you're between tenants. The most important thing is to ensure that the property is safe and habitable for the new tenant. This could include taking steps such as:
- Installing and checking smoke detectors
- Repairing any major safety issues
- Cleaning and painting
It's also important to take photos of the building before and after move-out. That gives you evidence of any damage the tenants cause.
Ease Through the Tenant Screening Process with J Street Properties Group Today
Tenant screening helps you find tenants who are safe and reliable. It's a multi-step process subject to several important laws, but you don't have to go through it alone.
J Street Properties Group believes property management is about more than maintenance and can help you understand the whole picture. We'll provide every Temecula landlord with useful data to help their property become more profitable. We offer personalized service for the entire real-estate cycle. We'll help you with everything from acquisition to exit planning.
Contact us to learn more about how our property management strategies can help your business today.
