Tenant screening is something that we take very seriously at Hoffman Realty. We’ve learned in our many years of property management in Tampa and the surrounding areas that placing the right tenant has a huge impact on the success of any investment experience.
We insist on being thorough when we screen. If you have not been careful enough with your own tenant screening, you’ll know that by the quality of tenants you place.
When you have residents paying rent on time, taking care of the home, and reporting maintenance as soon as it’s needed, you likely did a good job with your screening. However, if you find that your residents are paying late (or not at all), avoiding your phone calls and messages, violating some part of the lease agreement, or making frequent messes that you ultimately need to clean up, you might want to take a closer look at how you evaluate applications.
Screening tenants is one of your most important responsibilities when you’re renting out a property. If your tenant screening report is incomplete, you could be missing some key pieces of information.
To effectively screen tenants and enjoy an easy, stress-free rental experience, you’ll need a thorough and detailed application as well as an established set of rental criteria against which you can measure all of your applicants.
If you’re working with a local property management company like Hoffman Realty, you can expect a robust screening process that delivers a well-qualified tenant. When you’re managing on your own, you might be worried that your screening process is incomplete.
That’s a problem.
Let’s take a look at why your tenant screening report might seem incomplete, and what you can do about it.
Looking for Prior Evictions
Are you checking the national eviction database for prior evictions? These won’t show up on a credit report, necessarily, so you may feel like your screening report is incomplete if it does not include a check of national eviction records.
Checking for prior evictions is an important part of the screening process since it can give you a glimpse into a tenant’s rental history. If a potential tenant has a history of evictions, it may be a warning sign that they do not take their rental responsibilities seriously and could need to be removed from your property.
Collecting rent on time is essential to covering the costs of maintaining your rental property. Tenants who have been evicted in the past will likely have a history of not paying rent; this is the most common reason for eviction, and it’s bad news for landlords. When you’re establishing your standard rental criteria, make sure you include a clean eviction history; you don’t want to see any past evictions when you gather your background reports.
Dig into eviction histories.
Study Your Prospective Tenant’s Credit History
A lot of landlords will glance at the credit score, and then decide based on that one number whether an applicant will be approved or denied for a rental home. That’s not a good practice. While the credit score has its merit, you want to take a closer look at what’s in the credit report. Use the credit score as a threshold for deciding who you will continue screening in detail, but remember that it does not tell you everything that you need to know about an applicant’s financial history and responsibility with debt.
Spend some time with the entire credit report and look for potential red flags that could tell you this applicant is a bit of a risk. A few late payments should not necessarily worry you, especially if there is an otherwise healthy financial history in front of you. A large credit card balance isn’t even terribly scary, as long as it is being paid on time. Here are some of the things that concern us when we’re evaluating a credit report:
- Money owed to former landlords or apartment buildings.
- Utility and other housing-related accounts that are overdue or in collections.
- Repossessions and foreclosures.
We like to see a good credit score and a solid financial history. We don’t like to see a long list of unpaid bills, an alarming amount of debt, or recent bankruptcies. Your screening report is incomplete if you’re only using the credit score to judge an applicant’s creditworthiness.
Make Sure You’re Verifying Income
You’re working with an incomplete screening report if you’ve asked the tenant how much they earn but you haven’t verified it.
Ask for pay stubs, bank statements, or tax records. If your applicant is starting a new job and has not been paid yet, ask for an offer letter or an employment contract that includes salary amounts.
Always verify income. You cannot trust that a tenant earns what they say they earn. You want to see documented proof.
Are You Asking for Landlord References?
Conduct landlord reference checks.
On your application, ask for contact information for at least two or three references. These should be landlords or property managers that they are currently renting from or previously rented from. Confirm that they are, in fact, the owners or managers of the property. You can check local records for this information. Then, get in touch.
Ask the landlords to confirm the dates of residence and the amount of rent that was paid. Then, ask questions such as:
- Was rent paid on time?
- Was the lease followed?
- Was proper notice given before the tenant moved out?
- Did the entire security deposit get returned to the tenants? Was there property damage left behind?
- Were there any complaints from neighbors, vendors, etc.?
- Did the tenant have a pet? Was the pet well-behaved and was there any pet damage?
The answers you hear will be very telling. End the conversation with a question about whether or not that landlord would rent to the tenants again.
Do not leave your tenant screening report incomplete. It’s important that you collect as much information as possible on a prospective tenant, and it’s equally important that you verify it.
We can help with tenant screening, which may feel overwhelming to landlords who don’t feel like they’re doing a thorough job. Save yourself the headache and the hassle. Contact us at Hoffman Realty.