What to Look for When Screening Potential Renters

When screening potential renters, it can be tempting to fill vacancies as quickly as possible to avoid losing money. But when you rush this process, you risk signing up a bad tenant. Therefore, it is important to screen tenants beforehand, in a legal manner, to avoid making landlord mistakes.

Why It Is Important to Screen Renters

It is vital that you have the best tenant for your property. But how do you go about it? It’s widely recommended to filter applicants to those who are going to treat your property with respect, get along with neighbors, and most importantly, pay you for living there. However, there are some things you need to be aware of as a landlord. For example, there are laws and regulations around how you filter tenants and their background.

Knowing the Legal Side of Things

You can end up in trouble with the law if you don't handle tenancies correctly. Of course, you have rights as a landlord. But any current or prospective tenants also have legal rights. Understanding these can mean the difference between a reliable long-term renter or a costly legal battle. Therefore, it is vital you learn where you and your tenants stand legally.

Your rights as a landlord

Tenant screening is fully legal and encouraged by most governments. Often, this includes finding references from previous landlords, asking for referees, and conducting credit checks. These are all perfectly legal, including the use of any data you obtain regarding a tenant you feel is harmful for your property. For instance, you can refuse a tenancy on the grounds of a poor credit score. But there are also rights your tenants have a landlord must be aware of.

Their rights as a prospective tenant

Any prospective tenants will have some form of documented history if you ask for it or know where to look. And while you can request all kinds of data that you can use for or against a new tenancy, there are regulations in place. For example, all data is personal and sensitive. You must not sell private data or use it in any other way as intended, such as making credit scores public. Additionally, you cannot discriminate on any grounds such as race, age, or disability.

Mistakes When Screening Potential Renters

Whether you are a new or experienced landlord, there are some critical mistakes you can make. Some of the most common mistakes can cause severe issues down the line. Therefore, tenant screening is essential and ensures you find someone suitable. These mistakes often include:

• Judging a tenant based on their appearance to pay.
• Not performing any kind of background checks for prospective tenants.
• Failing to check a credit score for tenants that have applied for a home.
• When you receive data, fail to verify that it is correct with relevant systems.
• Not preparing relevant questions for a tenant interview when speaking to them.
• Not using a consistent tenant screening plan that works for most tenancies.
• Neglecting to use industry-standard screening software for accurate data.

Screening is a major part of finding the right tenants. This is why it is essential that you do it correctly. You can legally conduct background checks on any applicants. But you should also use question templates for each interview to find the right information or invest in tenant screening apps.

What to Look for When Screening

The entire screening process can be arduous with many moving parts. However, there are three main practices always recommended to perform: For a responsible landlord, these three main aspects are affordability, criminal background (if any), and previous rental history. These three vital pieces of data can determine whether a prospective tenant is willing and/or able to treat your property with respect and pay for the rental as long as the agreed-upon term.

A tenant's affordability

You aren't privileged to a tenant's bank statements and personal finances. But you do have the right to request data that can verify they can afford to pay the rent. An industry rule of thumb is that a tenant's income should be at least three times the rental price. This means they are able to pay the rent and still enjoy an acceptable quality of life, pay bills, and buy food. You can also legally request a full credit report to determine a history of sound financial responsibility.

Criminal background checks

Like credit reports, you also have the right to request a criminal background check on prospective tenants as part of the screening process. However, you must also be aware that you cannot discriminate based on this alone. You do, however, have the right to evict a tenant who has lied about their criminal past. Yet a criminal past doesn't guarantee someone is a bad person. So always consider the crime itself, and take into account their broader information.

Previous rental history

One of the strongest pieces of data you have when making a decision about a tenant is their previous rental history. After all, this is what will affect your future as a landlord the most. It is best practice to inquire with previous landlords about whether they missed payments often. Also, ask if they followed their tenancy agreement well or whether there were complaints about illegal activities. Solid judgment and broad data acquisition are useful if a tenant has no rental history.

Know Your Rights and Theirs

Screening potential renters is a complex task requiring time, money, and thorough research. But try not to be tempted to fill your empty home as quickly as possible, as this can lead to renting to the wrong person. Instead, take your time and use the resources available to you that adhere to the law. These include performing rental history checks, requesting a criminal background check, and assessing a tenant's ability to afford your unit.