One of the most tedious, yet important, aspects of owning a rental property is finding good tenants. In order to find quality tenants that will properly care for the home and consequently help you protect your investment, Northern Colorado property managers have strict tenant screening processes in place. Tenant screening is used in order to increase the chances of securing a responsible and dependable tenant, which serves in the best interest of the property owner.
The Importance of Tenant Screening
Any reputable property management company and all wise property owners will invest time and effort into screening potential tenants for their home. Although you undoubtedly hope to minimize vacant periods and quickly secure new renters that will pay the rent, you will find more long-term success by ensuring that applicants are reliable, trustworthy, and responsible. The importance of thorough tenant screening lies in protecting your investment by finding tenants who will pay the rent on time, pay their bills, and take proper care of the home.
In addition to finding good tenants, some important reasons for tenant screening include:
- Avoid tenants with a history of troublesome, dangerous or irresponsible behavior
- Investigate the rental history of applicants including property maintenance or damages, landlord conflicts, violent incidents, payment history and any other notable information
- Protecting your financial position as the property owner by leasing to financially responsible tenants in order to ensure that you receive the rent on time in order to pay the home’s mortgage, insurance, and taxes
- Minimize the risk of drugs, alcohol, violent situations, and police presence on the property
- Prevent accusations of discrimination by providing tangible proof of the specific information that has disqualified applicants
How Do Property Managers Screen Tenants?
Screening tenants is important, but it will only be effective if it is done properly and thoroughly. Property managers have extensive experience in screening tenants and they also have necessary resources readily available.
While individual companies may have varying requirements, most will at a minimum perform the following:
1. Inform Tenants of the Screening Process
By simply notifying tenants of their screening process, many property management companies are able to narrow down the list of potential tenants without further action. People who know they will not pass a strict screening process will often walk away from the property before they even fill out an application.
2. Pre-Screen With an Application
Requiring potential tenants to fill out an application requesting detailed information is a great first step in pre-screening applicants. Applications allow you to gather personal, employment, and financial information needed to determine if a tenant will be a good fit. Rental applications can extend to encompass any information deemed necessary, such as:
- Personal – name, age, birthdate
- Contact – phone number, email address, current address, emergency contact
- Household – number of people/family member living in the home, pets, smokers
- Estimated/Available Move-In Date
- Employment and Income – current employer information, job title, employment length, monthly gross income, additional sources of income, average monthly expenses
- Renter Or Residential History – previous addresses with landlord contact information, rental period dates, payment amounts, reason for moving
- Disclosure and Written Permission – allowing you to run credit and background checks, contact employers or landlords
3. Credit Check
By pulling an applicant’s credit report, property managers can better assess the applicant’s current financial situation, habits, and history. Credit reports disclose their credit score, but they also provide information on whether they pay bills on time or if they have high amounts of debt that could prevent them from paying their rent.
4. Background Check
A background check is used to check an applicant’s criminal history, providing your property manager with key information about their background. A background check will report criminal records, previous evictions, and any public record information such as current or previous legal issues. There are many reasons why background checks should be required. They are an extremely important step in the screening process that can help to protect the property owner, home, neighbors, and community.
5. Verification of Employment, Income, and Application Information
A reputable property management company will take the time to verify the information provided by the tenant on the application. Many people will falsify information in hopes of improving their odds of getting approved for a home, which in turn can result in tenants that cannot pay the rent, do not pay on time, or do not care for the house as they should. The property manager will contact employers and previous landlords to check that the information provided by the tenant is accurate and current. By verifying employment, income, and residential history, you as the property owner can have a greater reassurance of the tenant moving into your home.
6. Tenant Interview
A common final step in the screening process is to interview the tenant to find out more about them or to further discuss information from their application. This can be done face-to-face or over a phone call, but it allows your property manager to gather more detailed responses for important questions.
To learn more about how we handle the tenant screening process at All Property Services, contact our team of Fort Collins property managers today by calling us at (970) 224-4446.