It’s no secret that tenant screening is vital to your rental business. The better your tenants, the easier your life is as a landlord or property manager.
While tenant screening has its obvious benefits, there are some rules, conditions, and essential aspects you need to be aware of before you screen your potential tenants.
This article explores the top nine dos and don’ts that all landlords or property managers should be following.
Do Know Your Fair Housing Laws
It’s important to know all local and state laws related to renting, in addition to the federal laws. These Fair Housing Laws are built to protect renters against any sort of discrimination.
The Fair Housing Act protects seven specific classes of individuals in terms of race, color, national origin, religion, sex, familial status, and disability. Be sure to check your local and state laws, as some regions have additional protected classes.
Do Verify Income and Employment
One of the worst things a landlord can experience is late rent payments. The hassle of having to chase someone around and collect the rent, as well as the late fees, can be a pain.
That’s why it is crucial to verify employment and income. Calling an applicant’s employer or using online methods to verify the source and amount of a tenant’s income will help you identify if they can genuinely afford the rent every month.
Do Create a Tenant Scoring System
It can be difficult weeding through all the applicants, trying to determine which are good and bad. To help this process, create a tenant scoring system ahead of time and apply it to each potential renter. It’s not only a fair and unbiased way to screen tenant applicants, but it can also save you a ton of time.
Do Know Which Criminal Actions Can Be Used for Rejecting an Applicant
A criminal background check is a common practice for landlords to use. However, some local laws prevent certain criminal offenses from being used in rejecting an applicant. Be sure to check your local laws to see if a criminal background check can be used as a means for rejecting an applicant.
Do Charge the Applicant for Tenant Screening
Thanks to online listing platforms, you can advertise your available rentals all over the internet. While these platforms are enormously helpful in reaching a wider audience of potential renters, they can also lead to more applicants with bad criminal histories, poor credit scores, or previous evictions.
A simple way to avoid these types of applicants is by charging any potential tenant a fee for screening. Fees act as a barrier to entry, meaning anyone with some previous issue on their record likely won’t apply because it will cost them money. This can save you time by increasing the quality of applicants.
Don’t Ignore Past Rental History
Several tenant screening components are important, perhaps none more so than eviction or rental history. If a renter has an eviction or some other sort of negative occurrence on their rental history, it should be a massive red flag. Their past behavior as a renter can be a significant indicator of the type of tenant they will be for you. Therefore, you must not ignore their past rental history.
Don’t Ignore Credit History
Just like rental or eviction history, you can’t ignore credit history either. Look at each applicant’s overall credit score, payment history, on-time payments, and recent credit usage. If a potential renter has a negative mark on their credit history, be sure to look at the recency and how it compares to previous or current trends.
Don’t Violate Any Protective Laws
Be sure never to violate any anti-discrimination laws. These violations can lead to serious trouble if you are caught. You should never reject an applicant based on race, national origin, religion, gender, familial status, or disability. You need to make sure that you don’t ask any questions on the application that are fishing for answers related to these protected classes.
Don’t Deny Applicants Because They Have a Service Animal
One of the most common legal offenses that landlords commit is denying a potential renter with a service animal due to a pet policy. These animals aren’t quite like regular pets in that they have been trained to help aid people with disabilities.
The Americans with Disabilities Act doesn’t classify service animals as pets, so they are allowed in rentals regardless of the pet policy. This means you shouldn’t and legally can’t deny a potential renter because they are disabled or have a service animal.
Tenant screening can be a big boost to your rental business. Getting better tenants not only saves you time by causing fewer problems but also helps increase revenue by having longer leases. While the intricacies of certain laws and aspects related to tenant screening may seem overwhelming, you can get some relief by following these nine dos and don’ts.