Tenant screening is an incredibly important tool, one that should be utilized by property managers and landlords managing properties of every size. Adam Almeida, President and CEO of TenantScreeningUSA.com opines: “The primary responsibility of a landlord is protection: Protection of property, existing residents, and the perception of the property within the larger community. Subsequently, working with a well-qualified tenant screening agency, such as TenantScreeningUSA.com, remains a best practice for risk mitigation.”
Tenant screening is an important tool for landlords and property managers, and should be used to vet potential new residents of a rental property.
Almeida states: “Tenant screening is a primary tool landlords can utilize in vetting residents as a tenant check will verify information provided by a candidate on an application and during an interview.”
From Forbes.com (Jan. 31, 18):
…No. 1 priority for a profitable rental investment is finding good tenants. Make sure you or your property manager properly screen future renters by accessing quality tenant screening reports. Do not rely on your gut or a story from a “nice-looking” renter. Check verifiable reports to get an honest picture of your future tenant… (1)
Among the reasons to conduct a tenant check are:
- Financial – Loss of income is the bane of any investor of rental properties. It does not matter if the property is single unit or multiple units; empty properties are an obvious problem. And it only takes one bad tenant to allow a property to lose money. Protecting the actual property from damage is a challenge and may not always be vetted out via a tenant check; however a tenant check does have the power to mitigate potential risk to property.
- People – In order to have the financial goals successful a landlord needs to make sure long-term renters are protected. The loss of stable income should a “bad tenant” take up residency could be significantly damaging. Long-term renters can also provide reference to other potential long-term renters.
- Perception – Landlords and property managers may not always consider the perception or reputation of a rental community but renters do. If a property has the perception of being inadequate, unsafe, and unkempt those high value long-term renters may not consider such a property.
Almeida adds: “Landlords know their responsibility, one that includes property, people and perception, and they should be using a well-qualified third-party tenant screening agency, such as TenantScreeningUSA.com.”
Typical tenant screening reports may include:
- Consumer Credit reports – This report will assist a landlord in understanding a potential tenant’s ability to fulfill the fiscal requirements of any rental arrangement.
- Criminal History Reports – Criminal History assist a landlord in determining the potential risk that may occur with a potential applicant. But it should be noted that criminal history reports remain controversial in tenant screening and landlords should work closely with a tenant screening agency to understand laws governing such use.
- Eviction Records – This report highlights the history of a renter and may assist in avoiding additional eviction actions.
- References – Perhaps the most important and yet underutilized verification.
Almeida states: “Reference verification may be one of the most helpful activities a landlord can utilize. Confirming references from previous landlords could greatly assist.”
In the end a best practice for landlords and/or property managers should be working with a third party tenant screening agency, such as TenantScreeninUSA.com, in order to stay compliant with law, as well as providing the most current and applicable data available.
In the end Tenant Checks do not have to “break the bank.” TenantScreeningUSA.com is a third-party tenant screening company that offers affordable, thorough, and secure background screening for landlords and property managers. TenantScreeningUSA.com can create a tenant screening package unique to the requirements of rental properties large and small.
Notes:
(1) forbes.com/sites/forbesrealestatecouncil/2018/01/31/cash-flow-killers-to-your-real-estate-investment/#312eac3f5b5c
