Whether you’re an ambitious landlord, a real estate professional, or somewhere in the middle, you’re probably aware of how tough it can be to find a quality tenant. In certain situations, finding a tenant at all, much alone a good or exceptional one, might be difficult.
Running a tenant screening process is a smart practice. While screening tenants will not assist you if you have too few candidates, it is a useful technique for filtering out prospective “poor” renters and narrowing the applicant pool down to a few good options. Tenant screening may assist you in distinguishing between good and bad tenants. Many landlords, however, are unsure of what questions to ask or how to adequately screen a tenant.
Is it, nevertheless, worthwhile to do a tenant screening? If yes, what are the primary benefits and drawbacks of potential tenant screening for you as a landlord?
Let’s go through Why Is Tenant Screening So Important in 2022? so that you can ensure that only the ideal tenants inhabit your rentals.
What is Tenant Screening?
Before discussing Why Is Tenant Screening So Important in 2022? Let’s talk about what is tenant screening. Landlords and property managers employ tenant screening to assess whether or not a tenant is eligible to reside in a rental property. A tenant screening will often show a renter’s past and present financial situation. A screening report may also inform you whether the renter has ever been in major jeopardy or has a criminal record.
Landlords and property managers must screen applicants since they may have more than one interest in a rental property. However, asking a few questions and researching their rental history could be important to determine who is the best candidate. After all, you wouldn’t let a violent criminal reside in your rental property, particularly if they had a history of running afoul of the law.
Having said that, screening every possible tenant is important in identifying quality tenants who will take care of your home as well as you. So, let’s go through some factors to look for in a new tenant now.
What should you look for in a tenant?
We have discussed what is tenant screening now let’s discuss what should you look for in a tenant. While researching a prospective tenant may seem time-consuming, it is an important element of managing a rental business. There are various things to check for while looking for tenants who suit your requirements. Some of the most common factors are:
- Income Proof
- Criminal History
- Eviction History
- Reliable References
One of the most important aspects in deciding whether or not to rent to a tenant is seeing their job or evidence of income. Landlords often prefer to see that a tenant earns at least three times the monthly rent. If a prospective tenant cannot demonstrate their income or work status, this might be a major red flag. Furthermore, you want a tenant who can pay their rent in full and on time each month.
Examining a tenant’s credit history is another important factor in selecting a good tenant. A high credit score is desirable, but a good credit score does not automatically imply a solid credit history. Check for a history of late payments, huge debts, or accounts sent to collections. If any of these situations arise, it is possible that your tenant may fall behind on rent payments.
No landlord wishes to accommodate a criminal or someone who might endanger the neighbourhood. It is important to do a background check before signing a contract with a tenant. Run a background check for at least the last seven years to verify that your tenant will not cause you any trouble. In addition, concentrate on drug charges or violent acts that may endanger other people or property.
If an individual has a history of evictions or lease breaches, landlords will be wary. Nobody wants a tenant who will break the contract or be evicted for nonpayment of rent, vandalism, or unlawful behaviour. Making sure the tenant has no past evictions or lease breaches is a smart first step to take when looking for a suitable tenant. If they have a history of evictions or lease violations, you should start looking at alternative prospects.
Finally, it’s a good sign if a tenant can provide you with at least one to three reliable references. Take the time to interrogate their prior or present landlord about their tenancy. As a result, you will have a better understanding of what they will be like as tenants. However, if their references are small or they have nothing positive to say, this is another red flag.
Why Is Tenant Screening So Important in 2022?
After we’ve discussed what is tenant screening and What should you look for in a tenant?, let’s look at Why Is Tenant Screening So Important in 2022? to perform one every time you’re looking for a new tenant.
It Helps You in Making an Informed Decision
Selecting a tenant is a decision that will affect you for many years or at the very least for one year. A poor tenant can affect your life, but a good tenant should have as little influence on your life as possible, which is why you should always look for the best candidate.
You can make a decision based on solid facts and data as well as your interaction with the possible tenant if you use a good tenant screening technique. You might choose a tenant who has been demonstrated to be financially secure, has never been evicted, and has been paying off their credit cards on time – all based on records rather than mere chatter.
It confirms the Tenant’s credibility.
Many individuals present themselves better during interviews in order to get a coveted job or apartment, or simply to seem more enticing to their Tinder date.
Another reason to do a tenant screening is to cross-check information. This helps you to determine how truthful the candidate was throughout your meeting. If they claim to have had a good connection with their current or previous landlord but were evicted for renting out a spare room, it may not be speaking in their favour.
It saves you time and trouble in the future.
We all want our lives to be as simple and uncomplicated as possible. As a landlord, you may meet a variety of unpleasant circumstances or stressful events, but you have the ability to prevent some of them. Choosing a dependable, honest, and trustworthy tenant can save you a significant amount of time in the long run. Furthermore, knowing that you are renting out your space to someone you trust will offer you some peace of mind.
It might save you money in the long run.
This argument is not about the potential expenditures you could face if your prospective tenant demolishes a bathroom and refuses to pay for repairs or departs without paying for the final two months (though this might also happen!). Instead, keep in mind that the average expense of finding a new tenant is around $2,500! That is why it is important to choose a (good) tenant who wants to stay for an extended period of time (and has a history of doing so before).
What Are the Drawbacks?
As we already discussed Why Is Tenant Screening So Important in 2022? Let’s discuss the drawbacks. This article is primarily designed to promote the tenant screening process and to help you recognize the importance of having a suitable rental application screening system in place. But you may be asking whether there are any disadvantages to doing a tenant screening. Of course, the following considerations may seem to be unfavourable at first, but — spoiler warning — we still firmly believe in the need for tenant screening!
It Requires Time to verify tenant
Tenant screening can take a lot of effort and time. It requires little patience and time to call prospective tenants and ask them to give their credit reports and references, analyse the data you get, and contact their colleagues and employers to check tenants. This is most likely one of the primary reasons why some landlords choose to skip the tenant screening procedure when accepting a new tenant. But don’t worry we at Integritas are here to save your valuable time. We are one of the best background verification companies.
It Cuts the Candidate Pool
Assume you have 10 prospective tenants interested in your property. However, when you requested that each of them submit you their credit report and criminal background, only five of them agreed. Furthermore, one of the applicants had three evictions in the previous two years, while another had their credit cards maxed out. The math is simple: you only have three good candidates to choose from. While this may save you time, it may also leave you with an insufficient number of applicants in some scenarios.
Hope now you completely understand Why Is Tenant Screening So Important in 2022?. As you can see, tenant screening is a procedure that involves some time and effort on your part. And, at times, it may seem that it isn’t all that required, particularly if you already have a feeling that the candidate you met is trustworthy or is a friend of a friend. Tenant screening, on the other hand, should never be overlooked. With this easy method, you can be certain that your rental is in capable hands! We are here to help you to find an appropriate tenant. Integritas is a worldwide organization whose primary focus is doing background checks on applicants for our clients and supporting our clients in selecting the appropriate tenant for their properties.