If you own rental properties, screening any potential tenants is essential. You want tenants that will pay their rent on time, get on with the neighbors, and look after the property well. The screening process is your opportunity to learn more about the tenants and decide whether they are suitable to live in your property. It is important that you do the screening process properly and The Complete Tenant Screening Process describes how you can do this. It came in two installments, with the first looking at pre-screening and the second looking at what you should include in an application.
Getting a credit report is one of the most important steps in screening tenants. Often, tenants will already have their own credit report printed off to present to potential landlords. You should ignore these as there is the possibility that the tenant has edited the report already. You should always pay for your own credit report if you want accurate information. It is easy to understand the applicant’s credit score, although this is not necessarily as important as you may think and there are better ways to measure their financial ability. Just because someone has a low credit score does not mean they are a huge risk as there are various circumstances that lead to a low credit score.
For example, someone who is hardworking and usually pays bills on time could have been made redundant and struggled to keep up with their bills for a short period of time and may be working hard to improve their credit score again. Therefore, it is essential to examine the applicant’s financial summary, which consists of creditor information and public records. The four public records that show up on a credit report are judgments, garnishments, liens, and bankruptcies. The next thing to look at is the creditor information. This usually goes back seven years and includes lists of every account that the applicant has held during this time.
It will tell you whether the account is open or closed and whether the payments are up to date or if some of the payments are late or completely missed. Look for accounts that were closed without them being paid off or were sent to collection and accounts that were paid late regularly. It is often worth doing a criminal background check on potential tenants, too. This will confirm the identity of the applicant and give you information about any criminal history they have on their record. You can find out about both evictions and convictions. The problem that may concern you the most as a landlord is if a person has been evicted from properties previously. Some of the reasons for this may include squatting, non-payment, breach of lease, using a property for illegal purposes, and creating unsafe or unhealthy conditions.
Some of these are potentially serious issues, while others are not always a big deal. For example, if the applicant did not pay their rent once and it was ten years ago, then it doesn’t necessarily mean it is a big issue now. The best thing to do if you are concerned is to speak to the previous landlord. In terms of convictions, some landlords don’t want anybody with any convictions while others are less concerned about this. You should consider when the crime was committed if they have multiple convictions, the severity of the crime, and whether the crime is relevant to them living in your property. It is also worth noting that some criminals are not allowed to live in certain houses because of the crimes they have committed. For example, pedophiles are not allowed to live within a certain radius of a school.
Although it may seem that these checks are very detailed, they are a necessary part of screening your potential tenants. They reveal all the information you need to know about the reliability of the tenants. If you do not complete these checks, you could find yourself in a situation where you have tenants that are not keeping up with their rental payments or do not look after your property. It is much easier to turn away potentially difficult tenants than to wait until they are in your property and then need to evict them later for problems you could easily have identified if you had completed the screening process properly.