Tenant screening is the most important aspect of determining which applicant a landlord should approve as a new tenant. However, the process involves much more than carrying a legal pad and jotting down the applicant’s name, telephone number, and employer. The benefits of tenant screening often mean the difference between renting to a tenant who will pay rent on time and take care of the property versus renting to a tenant who fails to pay at all or may even destroy the property.
Bad tenants often carry a reputation of poor rental history from one property to the next because unsuspecting landlords fail to conduct comprehensive tenant screening. You may think you are a good judge of character, but the truth is, some prospective tenants are great actors and smooth talkers. They say the right things, smile at the right time, and even graciously thank you after the property showing. Then you end up with the nightmare tenant because you failed to conduct thorough tenant screening.
Landlords sometimes make the mistake of failing to pursue a tenant background check. This has happened when an applicant pulls out the full deposit and first month rental payment at the property showing. Just because an applicant has the money now does not guarantee they will pay you another dime throughout the tenancy. Comprehensive tenant screening services helps determine whether that applicant with the full payment-in-hand is actually the best choice. You could accidently reject the perfect tenant by giving in to the temptation of the poor tenant who just happens to have cash-in-hand.
Another mistake landlords make is relying solely on a credit report. When you obtain a tenant credit check there is no indication of a person’s rental history. It reveals their credit history, not rental payment history. You also cannot determine if the prospective tenant has an eviction history from a credit report. Credit checks for landlords are a valuable tool to determine an applicant’s payment history but does not reveal their eviction or rental history.
A proper rental application involves much more than that legal pad where you wrote down a few basic details. The free rental application from the American Apartment Owners Association is comprehensive, asks the right questions and obtains the detailed information you need to make the best decision to find the perfect tenant. The free rental application form should be part of your essential landlord forms that you keep on hand throughout every tenancy.
Tenant screening services not only help you rule out applicants with a poor rental history but also help you quickly eliminate applicants with a criminal history. Criminals, especially those conducting crimes on the rental property premises, often move from one rental property to another. Criminals absconding from parole or probation supervision may look for rental properties to hide out from authorities. When you conduct proper tenant screening, you benefit from learning whether the applicant has a criminal background.
Almost everyone experiences a difficult time financially at some point in his or her lifetime. A past eviction that the applicant discloses upfront may be justified. If the prospective tenant was temporarily out of work, it may not mean the applicant is a bad tenant. Landlords can benefit from determining whether the tenant is truthful about that one previous eviction or whether there is a history of multiple evictions from several rental properties by performing a proper tenant screening check.
Include the social security number fraud check in your tenant screening package to determine if your applicant is who they say they are. Tenants with poor rental history may give a fraudulent, made-up social security number or the social security number of an unsuspecting relative or friend to avoid detection. If you fail to obtain proper tenant background check reports, you lose out on the benefit of knowing if your tenant is hiding their true identity.
For additional things to look for during the tenant screening process, check out AAOA’s article on the Top 5 Reasons to Reject an Applicant.
The benefits of tenant screening services far outweigh the time and costs involved. This is especially true since the associated costs are often passed on to the tenant. Minnesota Statutes 504B, Landlord and Tenant section 504B.173 permits landlords to pass the cost on to applicants. Most other states also permit landlords to charge for part or all of the tenant screening process.