According to a 2020 Transunion survey, fraud incidents in the rental housing industry rose almost 50% over the previous year. The good news is that most screening software applications could identify fraudsters before they moved in.
As technology gets more sophisticated, bad actors use it to their advantage. Landlords need to stay a step ahead to protect their properties and income stream.
Thorough tenant screening practices will allow you to find the perfect tenants to fill your vacancies. Keep reading to discover the power of solid tenant screening practices.
Why Is Tenant Screening Important?
Tenant screening has become a crucial step in filling spots in landlords' rental properties. It helps you avoid problem tenants who don't pay rent or damage your property. It also helps you avoid expensive legal issues and a loss of income.
Transparent Screening Criteria
Your screening process needs to be fair and transparent. This is the best way to ensure consistency for all applicants. Doing it this way helps you comply with the Fair Housing Act's discrimination laws.
Tenant Screening Questions
When the time comes to find tenants, you want to ask the right questions. What information should you collect to attract tenants who pay their rent and take care of your property?
Credit Check
Reviewing an applicant's credit report is standard practice when screening tenants. A credit check shows a person's payment history, financial responsibilities, and outstanding debts.
Look for patterns of responsible financial conduct. This information can point to a tenant that will likely fulfill their rental obligations.
Professional Background Check
Before conducting a background check, you need to get written consent from the potential tenant. The purpose of the background check will be explained in a separate document from the rental application.
It should also spell out applicant rights under the Fair Credit Reporting Act. One of the rights includes the right to dispute information that is not accurate.
A background check allows you to assess someone's reliability and creditworthiness. Checking criminal history helps you keep yourself and other tenants safe.
Landlord References
Search for past eviction records and get references from previous landlords. If the applicant has a good history with past landlords, you can assume that he or she is low risk.
Proof of Employment and Income Verification
Can the applicant afford to pay the rent? Check on the applicant's employment and verify their income. Request pay stubs, bank statements, and employment verification documents.
A tenant's income should be three times the monthly rent to comfortably afford the payment and minimize the landlord's financial risk.
Screen for the Best Tenants Today
Do you want reliable tenants who pay the rent on time and positively contribute to the community? Effective tenant screening will help refine the process and get you the best tenants.
Talk with our team today if you want to improve your tenant screening process. We at PMI Arka are dedicated to offering professional property management services to our clients.
Contact us via our website or by calling 425.242.3236 to schedule a consultation.
