Tenant screening is one of the most productive steps a property manager can take to protect their investment.
A solid tenant prescreening process, tenant approval process, and application rejection process is essential. In these processes, you will be able to differentiate between the “good” and the “bad”. Finding responsible individuals who will pay on time and protect your property is one of the most important assets you can have.
The Tenant Screening Process
Why should tenants be screened?
An applicant’s past can be investigated through a process or a combination of processes, which allows you to find out exactly who the applicant is that you are considering developing a professional relationship with, what they have done, and the behaviors they demonstrated during their previous residences.
It is more than just an application process when it comes to screening. Applications may contain falsified or inaccurate information. Instead, it is a way to research the information your tenant has provided. You can also analyze the applicant’s outside information to determine if he or she will be a good tenant after this process.
What Makes a Potentially “Good” Tenant?
The State of Colorado provides huge advantages to rental management professionals. There has been extensive research conducted in the state to identify the characteristics of potential “good” tenants. It’s important to remember that there are no fool-proof ways to identify the best tenants; however, the following qualities and characteristics have been identified by rental management professionals as most important:
- Stability in the workplace
- Quality of Cleanliness
- Having a distaste for illegal endeavors and activities
- The ability to pay rent
- Respect for their responsibilities
Minimum Requirements or Expectations
Choosing your minimum requirements or expectations is the first step in the tenant selection screening process. There are different requirements and expectations in the rental industry. Ensure that your rental agreement, advertisements, and applications clearly state your expectations.
In rental management, there are a few requirements that are generally agreed upon:
- You Must Have At Least Three Times More Income Than Your Monthly Rent
- A clean criminal record is required for potential tenants
- No prior evictions
- References from former landlord, professional acquaintance, personal reference, and family reference are required
Applicant Screening
We generally receive numerous phone inquiries once your property is advertised. Listen first for signs of desperation as well as whether the potential tenant seems interested in the available property. It is best to ask the inquirer what information you can share about your rental property.
A good question to ask would be about the location of the property, its description, and the landlord’s expectations. If you are interviewing someone, you need to determine whether they sound responsible, if they are passionate about the area where they will live, or if they sound as if they don’t care about the property at all.
As part of your first screening, remind the potential tenant about your minimum income requirement/expectation. Moreover, you should state that you will conduct a complete background check. Using this process, you will be able to eliminate approximately 80% of all potential candidates and let the rest know that you only wish to accept upstanding citizens.
Housing equity
Managing rental properties requires an understanding of Fair Housing laws and a commitment to following them. Following are the classes that must not be discriminated against:
- Origin of nationality
- Race
- Color
- Disabilities/Handicaps
- Religion
- The status of family members
- Sex
When selecting tenants based on the criteria outlined above, rental management professionals cannot engage in the following acts:
- The refusal to rent
- Refusal to negotiate
- Remove rental properties from the rental market suddenly
- Deny the rental property.
- Changing the terms, conditions, and/or privileges
- Changing a property
- Denying availability untruthfully
- Access to memberships, services, and privileges granted to others per property terms is denied
What’s Left?
You should now have 20% of applicants to sort through. It is important for a property manager to adhere to the minimum requirements and/or expectations, avoid discrimination, and conduct background checks. The best option is to obtain both a criminal history and a credit history.
The references listed may also need to be reviewed and interviewed carefully. In order to gain a full understanding of the person you’re dealing with, you can employ other methods. Social network screenings, home inspections, employment verifications, and reference interviews are among these steps.
