Tenant screening is one of the most important tasks a landlord or property owner can do to safeguard their property and investment. A properly conducted screening can ensure the reliability and responsibility of tenants and can help maintain the value of your property down the line. But how do you screen tenants, exactly? Discover the ins and outs of this important process, including detailed steps in our expert guide.
Initial Application Review
Tenant screening involves a lot of different steps, but the first one should always be to collect as much information on your potential tenant. Here is all the information you should gather through an application form:
Personal Information
Start with the basics and get their personal identifying information, including their full name, current address and date of birth, which you should confirm with a photo ID.
Renting History
Inquire about their rental history; the last few places they’ve lived and ask for their previous landlord’s contact information for references.
Employment History
Ask them where they work, their current position, as well as their supervisor’s contact information for reference.
Financial Information
Ask your potential tenant if they have any outstanding debt, and whether they give you consent to check their credit.
Once you’ve gathered this information and are willing to move forward with a prospective tenant, you’ll need to verify the information professionally.
Credit and Financial Background Check
When it comes to tenant screening, understanding your prospective tenant’s financial situation is one of the most important steps. This check will provide valuable insights into their ability to meet rent obligations consistently and on time. A financial background check will review:
Credit Score
A credit score is a numerical representation of creditworthiness, based on credit history. A higher score generally indicates responsible financial behaviour, while a lower score may raise red flags.
Outstanding Debt
Reviewing outstanding debt helps assess a potential tenant’s current financial obligations. This includes credit card balances, loans, and other forms of debt. High levels of existing debt may suggest that the tenant could struggle to meet additional financial commitments, such as rent.
Payment History
It’s also important to check the potential tenant’s payment history on existing debts. This includes late payments or accounts sent to collections. A consistent history of on-time payments indicates that the tenant is likely to be reliable in paying rent as well.
Once finances are checked, it’s time to verify the prospective tenant’s employment and income.
Employment and Income Verification
Verifying employment and income can help ensure that a potential tenant has the financial means to pay rent consistently. There are several steps you can take to confirm this information, starting with contacting the tenant’s current employer to verify their employment status and income. This involves speaking directly with HR departments or supervisors to confirm the details provided in the tenant’s application.
Reference Checks
Finally, conduct multiple reference checks to assess the character of your prospective tenant. Request references from their current employer, previous landlords, and a few personal contacts. Ensure that the provided contact information is accurate and leads to the correct individuals. To verify an employment reference, consider contacting the employer through the main company line. Ask questions that focus on the tenant’s character and confirm the details provided on their application.
Screening your tenants may seem like a tedious and lengthy task, but it is crucial to safeguarding your investment and ensuring a prosperous landlord-tenant relationship. For more information on tenant screening and how GIL can help you through the process, contact us or request a free property management consultation!
