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Did you know that 44.1 million American households rent their home?
Navigating the rental market as a tenant can be challenging, but no one seems to talk about the difficulties you may face as a landlord. From unreliable tenants to property damage, there are a host of worries that could keep you up at night.
Tenant screening is an essential part of tenant recruitment; after all, you’re entrusting your property to someone you may have never met before. Although some landlords decide to follow up tenant references informally, there are some significant benefits to having them undergo a professional tenant screening.
Provided everything checks out, you can have a long and happy lease agreement. If not, you dodged a bullet.
If you’re interested in the benefits of tenant screening, read on to find out more.
1. An Easy Process
When you’re recruiting for new tenants, you’ve got a lot to think about. From ensuring the property is maintained and clean to drawing up new contracts, you’ll be thankful if any tasks can be taken off your to-do list.
That’s where tenant screening comes in handy. You can find a competent service specializing in tenant screening to do all the hard work for you. You can learn more about professional tenant screening services here.
Usually, you’ll need to register with an agency and fill in your personal information and payment details. However, once you’re registered, you can use the service again and again without having to re-enter all your personal data.
The agency will require some basic information from the prospective tenant for each screening. This usually includes:
- Full name and any previous names
- Date of birth
- Photo identification or a copy
- Email address and contact number
- Log of previous addresses
- A signature authorizing consent for a credit check
Most agencies will have a template letter that you can pass directly to your potential tenant to make the process easier. Once you’ve passed this information over to the agency, you can sit back and wait for the results. It’s far more straightforward than following up on references yourself.
2. No More Missed Payments
Missed payments are usually the start of a downward spiral to a landlord-tenant relationship breakdown. Unfortunately, it’s a common problem.
If you decide to follow up references manually, you’ll get an inside into their previous payment history. However, there may be other financial problems that you aren’t made aware of.
Missed payments to any lender (from credit cards to furniture) will show up on a credit check for years. By going through a tenant screening check, you’ll get a comprehensive breakdown of any financial issues they’ve had previously.
If they’ve had problems with money recently, think carefully about whether they’re the right tenant for you.
3. Find Great Tenants
The main objective of any landlord is to have a peaceful and straightforward relationship with their tenant. You want someone that is financially secure, reliable, and will treat your property with respect.
Unfortunately, many landlords end up with nightmare tenants. This can cause you unprecedented stress and leave you out of pocket. However, it’s important not to let these experiences turn you into a controlling landlord!
The best landlord advice is to do your very best to avoid these situations in the first place. Tenant screening is one of the most effective tools at your disposal to check the legitimacy of your tenants.
Of course, you also need to make sure you like and trust them from a face-to-face meeting but remember that there may be things they don’t disclose to your face. That’s why screening is so vital.
Once you’ve found someone that you like and has no red flags on their report, you can sit back and enjoy a low-stress tenancy.
4. Predict Evictions
Evicting a tenant is a horrible experience for everyone involved. It’s the absolute worst-case scenario, and you should do everything you can to avoid it.
Evicting a tenant is expensive, emotionally draining, and time-consuming. However, you can get a comprehensive report from tenant screening programs that details the exact risk of needing to evict a prospective tenant.
Complex algorithms can calculate the risk of potential eviction by cross-referencing any black marks on their file. You should utilize these services because they’ve used machine learning to analyze the data from thousands of tenants and lease outcomes.
5. Stay on the Right Side of the Law
Although it’s legally your property, there are certain things you can and cannot do as a landlord. Carrying out tenant screening to choose tenants is allowed. However, there are restrictions.
First, you need to obtain consent and protect their privacy. If you use an agency with specialist tenant screening software, you can rest assured that they have the appropriate privacy and authorization to conduct this research.
If you embark on your own investigation, remember that you’ll need to store their data securely, not breach maximum holding time, and ensure you have written consent detailing your intent.
Additionally, the tenant screening process safeguards you regarding Fair Housing laws. Legally, you can only deny a prospective tenant if you can prove you had a genuine reason for rejection.
However, if you screen applicants, you’re able to select the best from a pool of deserving tenants.
Remember, as a landlord, you’re bound by federal and state laws; if you don’t know these like the back of your hand, it’s best to enlist the help of professionals to ensure you’re protected later on.
6. Recieve a Detailed Report
The other major benefit of choosing tenants by using professional tenant screening services is the level of detail you receive in a report.
By choosing these services, you get access to data that you would never legally be able to obtain otherwise.
You’ll receive basic information such as identity verification, financial status, and previous rental history. This will help you gauge whether they’re a responsible renter. You’ll also get enhanced information that includes any blacklisting information and bankruptcy issues.
However, you’ll also want to understand their reasons for needing a new rental – you’ll see data about when other landlords have requested credit checks for them. If there are lots of recent checks, this could be a red flag showing that something may be amiss.
Finally, you’ll be in the know about whether they’ve had any past legal trouble, court summons, or visa problems.
When combined, all this data will help give you a complete and detailed picture of the tenant and how they live their lives. Once you’ve scrutinized the report, you’ll be in an excellent place to make an informed decision about your applicant.
7. Minimize Tenant Turnover
Finally, tenant screening can help make you more money in the long run. Ideally, you want your tenant to renew their lease beyond the minimum terms in your contract.
Finding responsible tenants is one of the best ways to do this. You want to attract long-term residents that are settled in local jobs and enlisted in local schools. The more the tenant sees your property as a home, the longer they’ll stay.
Tenant screening is a vital tool to help you ascertain whether they’re at this stage in their lives. Although some landlords blacklist pets, owning a pet can be a good indication that they’re responsible and looking for a long-term home.
You should look out for applicants that are constantly moving house or seem to have other unreliable lifestyle factors. These may be red flags.
Once you’ve found a tenant that wants to make your property home, you can have a long and happy contract with them. Remember, many people never buy their own property. This means there’s potential to have the same tenant looking after your house for ten years or more!
Tenant screening really is the first step in making sure you approve someone that has the potential to grow into this ideal tenant.
Tenant Screening: An Essential Tool for Every Landlord
This detailed guide shows you all the main benefits of conducting professional tenant screening before approving any prospective tenants.
Although it has an upfront cost, you’ll save money and time in the long run. It’s a worthwhile investment if you want to attract high-quality tenants that won’t give you any trouble for the contract duration.
If you want to get the best tenants, you also need to be a competent and professional landlord – what better way to show this than by carrying out verified checks on their history and current status?
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