A tenant or rental screening is like going through your prospective tenant’s background with a fine-tooth comb. It works as an x-ray and gives you deeper insight into records that are significant to you leasing your property. Your tenant turnovers increase when you do not perform this regular background check. An average tenant turnover in America costs somewhere between $1000 – $5000. Still, want to risk going by your gut feeling to onboard a tenant? It can rapidly burn a hole in your pocket.
A Wilder.com study and market research found that tenant screening helps reject at least 14% of the total applications. The major reason behind this is the delinquency of the applicant. In many cases, application rejection mostly depends on the severity of the offence. All of this data can easily come up in the tenant screening process. But once landlords and property managers know about it, they can make a conscious choice about leasing. Hence, a tenant screening is the most simple way to avoid problematic tenants and save money.
But before we wander off, what does a tenant screening show? Lets us find out.
What do tenant background checks consist of?
Today, technology can help you carry out background checks quickly. Here are some top things that appear in any tenant screening process.
Rental history of the tenant
The rental history will give you a clear picture of how many properties the tenant has rented. You will also get to know their average turnover ratio. If their records have insights from previous landlords, you can even access that for better insights. You will also know if the prospective tenant is leasing multiple properties under their name, which can be quite suspicious in some cases.
Was your tenant ever evicted from a previous property they leased out? Why did they get evicted? When you run a comprehensive background check on your prospective tenants, these reasons show up. The whole eviction history of can be seen, and you can mark the red flags if there are any. You can then choose not to rent your property to a certain tenant if their record is that bad. While it may not show reasons to tenant eviction, it does give other details.
According to PWE research, more than 30% of Americans were facing eviction notices during the pandemic. Though some tenants have a genuine issue with a sudden loss of income and non-payment of rent, many are habitual late payers. Run a background check to know who they are and identify them beforehand.
Does your tenant have a criminal record? Is it a civic offence or a criminal offence, or was it a minor misdemeanour because of alcohol addiction? These kinds of data are quite crucial to judge a tenant’s character. Tenants who are trying to hide their criminal records stand a further chance of harming the property and other tenants. But once you know your tenant’s criminal history, you can easily decide if you want to onboard or not.
An Edge Magazine report says that 1 in 3 Americans have a criminal record on average. Though all criminal records are not severe, why leave it open to chance when you can become sure with a tenant screening?
There are many people who work around with fake IDs, be they duplicate or stolen identities. This can easily show up in comprehensive tenant screening data. Every piece of data is verified, from double-checking their birth dates to proofing their address. All discrepancies are red flagged and notified to the landlords.
Financial conditions and payment abilities
Does your tenant have the income they claim to have? Do they have the ability to pay your rent on time, or will you be left with a lot of back-dated rent? Screening your tenant’s financial and income records can help you find out.
The average credit score of the prospective tenant and their financial responsibility level. The higher the tenant’s credit score, the better their financial conditions. The people with higher credit scores have a better chance of passing the tenant screening. This report will also show you if the tenant has huge outstanding debts or unpaid missed payment records.
Never judge a book (tenant) by its cover. Run a background check instead
It is always wise to get verified data from credible tenant screening service providers. Don’t just blindly trust your gut feeling and onboard a tenant. Get credible information and comprehensive reports from background checks. Only then lease a property.
With the right technology and experienced team, rental/tenant background checks can be done really quickly. So, getting the background check done and playing it safe is better. Why be sorry when you can be safe? The minimal amount you pay for tenant screening is negligible compared to the money you will pay if you have a problematic tenant.