When we talk about tenant screening, most people think it means trying to figure out whether a tenant can afford a property. That is certainly a key element, but there is so much more that goes into tenant screening. For instance, fair housing is a very important part of a screening process. Sometimes, a landlord may feel like giving someone a break. There may be an elderly applicant who needs help or a younger tenant who is in school, and you want to help them out. You may think you are doing something nice, but you are actually violating fair housing laws when you treat one applicant different than another. By helping one person you can be perceived as punishing others.
At Realty Services, we encourage people to use a Resident Selection Criteria, which is in writing and provided to applicants interested in your property. This can save you a lot of problems. No one likes to get rejected. When they fill out your application, they want to be accepted, so if you turn them down, they may get angry. The anger can grow if they don’t know why they were turned down, or what your standards for acceptance are. The Resident Selection Criteria form will disclose why you might turn someone down. It is important for fair housing considerations and it is just good customer service.
When you are screening, there are several things to consider. You will likely pull the applicant’s credit. Don’t rely too much on the credit score. Most people don’t know exactly what goes into a credit score, so is the actual number really important? Instead of paying attention to the number, examine the credit report for potential problems. For example, unpaid utilities or broken leases will be warning signs.
Criminal background checks and eviction checks are also pretty standard in tenant screening. With evictions, it makes sense that you do not want to rent to people who have evictions on their records. With criminal checks, it depends on timeframe and your property. For example, if you have someone with a history of playing their music too loud, that will matter more in an apartment building than in a single family residence. Consider a statute of limitations as well. If someone committed a crime 15 years ago, are they still unworthy to rent your property, or will you consider them as a tenant? If you are going to have a statute of limitations, spell that out in your selection criteria.
Employment, landlord history and references should also be considered. Remember that these are often subjective. Maybe the tenant’s current landlord does not want to lose good tenants, and might exaggerate certain things. Or, the tenants could be a huge problem, so the current landlord will give a glowing reference. Verify whatever you possibly can. For example, if a tenant works at a convenience store but claims to earn $100,000 per year, ask for pay stubs.
Remember to use credit, criminal and eviction histories for the right reasons when you are screening a tenant. The wrong reasons will get you into fair housing trouble. Be careful of the tenants who are what we call “professional tenants.” They will look for landlords instead of property managers because they know landlords don’t have the same tools and resources when it comes to screening. Finally, use a good screening company. Find a company that will actually access eviction and criminal dockets to find out exactly what happened.
If you need help screening tenants for your property, or you have any questions at all, please contact us at Realty Services Property Management.