If you’ve ever owned rental properties, then you know how much of a hassle it can be to keep track of everything. Between maintenance, advertising your property, making sure paperwork is organized, and keeping up with property laws, there’s a huge amount of responsibility involved. The last thing you need is a tenant making things more complicated. Of course, as you know, some of this will be unavoidable. There will be complaints on occasion, and late rent payment is just something that’s bound to happen every so often. However, you can protect yourself from a lot of headaches through a thorough tenant screening. Most landlords will conduct some form of screening in some way, but many make the mistake of forming their decision based on their feelings toward a potential tenant. This is understandable, as landlords want to fill their vacancies as soon as possible, but it’s worth keeping in mind that the way someone acts now is not always indicative of their overall behavior. It’s important to do a thorough screening of any potential tenant for more reasons than you might think.
The most obvious reason to screen tenants is to get an idea of how likely they are to keep up on their rent. Non-payment is the biggest concern with most landlords, and it’s natural to want to see that credit score. It’s a mistake to just stop with that, though. Taking the time to look through the full report will give more context toward a potential tenant’s financial situation, which is one of the best indicators regarding whether they’ll likely pay on time. You’ll be able to see what kind of debt they owe and judge whether you want to take on the risk (credit card debt is frequently seen as a bigger warning sign than something like student loan debt). Perhaps even more crucially, you’ll be able to see if they’ve ever been sued for unpaid rent or damages.
The other big part of a tenant screening is the criminal background check, and it’s just as important to be through with this part. The last thing you want is to put your current tenants in danger by taking on a new high-risk renter. Not only is this unethical, but criminal activity in your area can cause property values to drop. There’s also the possibility of criminal penalties if illegal activity is discovered on your property. Of course, to avoid being discriminatory it’s important to consider what you’re willing to overlook. For example, if a tenant has a conviction from several years ago but has since been well behaved, this isn’t nearly as big of a warning sign as recent criminal activity.
In addition to these screenings, you’ll want potential tenants to provide professional and character references. This will allow you to contact their employer to verify that your impression of their income is true. It will also give you a more personalized idea of a potential tenant’s character, which is something you won’t get from a report. While it takes some extra time, this step could be what makes or breaks the decision.
There’s no arguing that it’s a bit of extra work in the beginning to go do all of these checks thoroughly. It will be tempting to just go with a tenant who seems fine on the surface, as a vacancy is like a hole leaking money. Going the extra mile is worth it, however, as it dramatically decreases the odds of getting a problematic tenant. Compare this figurative expense to the literal expense of an eviction process, and you’ll reach the same conclusion—a tenant is worth a lot, but peace of mind is priceless.