How to Use Tenant Screening to Get Good Renters

Tenant Screening Saves Time

Using tenant screening to get good renters saves more time and money than any other property management practice or landlord technique. If you get a bad tenant you will lose rent, raise your stress level, and lose money in the long run. Eventually you will probably end up evicting the tenant at your own expense even if you go to court. A little time screening tenants at the front end can save you countless hours, and thousands of dollars over time. What's more, tenant screening is easier than ever before.

Difficulty:

Moderately Easy

Instructions

1. 

   USE A SIMPLE TENANT SCREENING APPLICATION FORM THAT GETS ALL THE NECESSARY INFORMATION.

   This application should include your potential renter's:
   - Name, birth date, and social security
   - Current address, current land lord, current land lord's number
   - Current employee, yearly salary, supervisor's name and number
   - One additional character reference who is neither a family member nor close friend
   - Desired move in date
   - Permission to run credit check
   - $20-$35 application fee to cover tenant screening (optional)

2. 

   FIRST VERIFY PLACE OF EMPLOYMENT MATCHES SUPERVISOR'S NUMBER AND NAME

   The first way landlord's get duped is to trust the potential tenant's information. Trusting property managers get a property management education in the school of hard knocks quickly. All a bad apple tenant has to do is give you the name and number of a good friend who pretends to be his or her supervisor and offer a glowing report and beefed up salary. Instead, take the name of the company and look for the number yourself. If the number for the company doesn't match the number for the supervisor call and ask to be transfered to that supervisor. If that supervisor does not exist at that company, reject the tenant and keep the application fee for your time.

   Learn where to find title and owner information in your county. The county assessor's office likely has a website that allows you to check the name of the owners on any given property. Put in the property address and see if the current landlord is the owner of the address. If not, this is a major yellow flag. If it is an LLC or other company, simply ask the supposed landlord the name of their company. If they can't give you the right owner of the property, reject the tenant and keep the fee.

   Now you just made money off of a bad tenant instead of them making money off of you!

3. PERFORM A TENANT SCREENING CREDIT CHECK.

   If you have verified that the tenant is a basically honest person by giving you correct address and employment information, perform the credit check. If the tenant does not want to give you their social security number, by the way, simply DO NOT rent to them. This is standard practice in the rental world.

   Use a background check software like Net Detective. Using just this one service you can get:
   - SSN Validation
   - OFAC/Patriot Act Search
   - Evictions + Suits
   - Liens + Judgments
   - Bankruptcies
   - Criminal Records Search
   - Sex Offender Search

   If the identity does not match or one of the reports comes back negative, do not rent to this tenant. Give them a letter explaining the reasons for your rejection and invite them to correct any inaccurate information with the reporting agencies, not you. You aren't in the business of trusting people who appear to lack faithfulness. Some tenants will have less than idea credit reports. That is why they are renting after all. You will have to decide the level of credit that is required for you.

4. ASK THE CURRENT LANDLORD THESE SPECIFIC QUESTIONS ABOUT THE TENANT:

   Has this tenant ever paid rent late? If so, how many times exactly?
   Would you characterize this tenant as no maintenance, low maintenance, or high maintenance?
   (If that question doesn't make sense ask...) How many times have you received a complaint from this tenant?
   Has there ever been any damage to the apartment or home this person is renting? Do you expect to return the entire deposit?
   If you had it to do all over again would you rent to this person? Why or why not?

   Be sure to thank them for their time and wish them a quickly filled apartment.

5. ASK THE CURRENT SUPERVISOR THESE SPECIFIC QUESTIONS:

   - Can you please verify the range of salary this person currently makes with your company?
   - Can you verify your intent to continue employment for the coming year?
   - Have you ever had any disciplinary issues regarding this person?
   - Would you be happy to have this person as a next door neighbor? Why or why not?

6. Good Renter = Cash

   MAKE SURE THE TENANT UNDERSTANDS YOUR SPECIFIC POLICIES AND REASONS FOR IMMEDIATE EVICTION

   You should have a clear pet policy, smoking policy, and community disturbance policy in your lease. I personally like to charge a $25-$35 late fee for any rent that comes to me after the due date. I don't ask questions I simply send a bill before the next month's rent is due. Eventually this ends rent coming in a few days late and saves you stress. If rent doesn't come in by the fifth day of the month immediately file for eviction and send a legally tight eviction notice to the tenant explaining how the can rectify their account to avoid eviction. This doesn't have to happen often for rent to move to the top of the prioritized bill list.

   Why should you be the last bill to get paid every month? You are providing them with shelter and a reasonably rated apartment. I always rent mine below what I think market value is in order to keep long term tenants. I get good tenants, and I keep them as long as possible by making them happy.

   After all tenant turnover and damage is the single greatest expense due to maintenance and vacancy in the rental business. Good tenant screening practices reduce this cost to a minimum.

Tips & Warnings

• Treat your rental business like a business! Charge late fees, don't accept non-payment, and pursue perpetrators who fleece you.

• Become involved in a local landlord club and pass around names of bad apple tenants as well as referrals.

• If you find a good low maintenance tenant, offer them lower rent (even $5) the following year to keep them around.

• Don't follow your heart, follow your head. If the numbers or the reports say no...you say no too.

• Avoid the lazy bone that makes you think this renter is okay. Do the hard work to make sure. You aren't in the business of guessing on character. Let the numbers, reports, and references take the guess work out of renting.

Resources

• Earn More Money with Ehow This Month
• Internet's #1 Background Check Software: Net Detective
• Legal Lease Agreements for Any State