5 Reasons Screening is Essential for Rental Property Success
As a landlord, one of the most important decisions you can make is who you choose to inhabit your property. The success of your rental investment, the harmony among neighbors, and your overall peace of mind depend on your selection of a good tenant. Ideally, you are looking for someone who is reliable, responsible, and respectful of your property. You may feel rushed to fill a vacancy, and while it is important to move quickly, executing a thorough screening and background check of your prospective tenants is an essential step that every landlord or property manager must take.
Protects Your Property
A tenant screening should also include a criminal background check. While criminal hits on records are not all that uncommon and some are certainly not considered deal breakers, there are a few instances that can be red flags indicating that an individual may not be the best fit for your property:
- History of eviction
- Violent felonies
- Outstanding lawsuits with past landlords
- Inaccurate or misleading information on an application
These are just a few red flags that you as a landlord should be looking out for in order to protect your property and your reputation when selecting a tenant.
Helps Tenant Retention
Constant turnover in a property can be a landlord’s worst nightmare because it often leads to more paperwork and loss of income. If you notice that the prospective tenant has a history of moving from rental to rental every year, it is likely they are not looking for a long-term lease. Screening to find a dedicated renter to occupy the space will likely result in tenant retention and less of an opportunity for your property to sit empty between leases.
Minimizes Your Risk of Financial Loss
Credit checks as a screening tool can be helpful but are not always required, depending on the situation. A healthy standing credit report is often a good indicator that this individual would make a reliable tenant and pay rent on time each month, but there are certainly reliable tenants that have mediocre scores. A single score may not give an accurate picture of a person’s financial reliability. A full credit report will highlight delinquency patterns, identify if they have a history of paying rent on time, or note past evictions or rent-related debts. Ask a prospective tenant to disclose ahead of time and explain what you may find on their credit report; this will save you time interpreting and give an accurate picture of their financial history.
Consistent and candid screening criteria can be used to avoid any discrimination claims against tenants and ensure that a selection is made based on objective criteria and not personal bias. This is crucial in adhering to local, state, and federal fair housing laws. Relevant details such as credit history, criminal records, and past evictions are appropriate information that a landlord can request during a screening. Making a decision based on details such as race, age, religion, sex, disability, etc should never be a determining factor for landlords and can result in serious legal consequences.
Peace of Mind
Most importantly, a positive renter screening will offer you peace of mind. A good tenant with a positive rental history and a clean background check allows you to rest easy knowing they are taking care of your property, paying their rent on time, and responsibly reporting any necessary maintenance which makes for a healthy landlord/tenant relationship.
These tenant screening is not only best practice, but also serve as a crucial step to ensure the protection of your property, your financial stability, and a fair opportunity for all inquiring tenants. If you are hiring a property manager, ask for details on what criteria and steps they employ to screen tenants.