Tenant screening is an important process for landlords and property managers to assess potential renters. It ensures the reliability and responsibility of tenants and can help maintain the value of a property down the line. But what’s involved in this process exactly? And what are the costs of tenant screening? Discover everything you need to know in our expert guide.
Why is Tenant Screening Important?
There are many benefits to screening tenants before renting out your space, and even more consequences if you skip the screening process. Here are some of the main benefits of screening tenants:
Reducing Risk
Letting a perfect stranger rent from you comes with risks. However, knowing who your tenants are before they rent from you will allow you to identify potential red flags such as past evictions.
Ensuring Reliable Tenants
As a property owner, you know the importance of reliability when it comes to monthly payments. A proper screening will help you find tenants who are likely to pay rent on time and abide by the terms of your lease.
Protecting Your Property
Your property is your investment, and as such you’ll want to protect it from getting damaged. Tenant screening will help you minimize the risk of property damage and maintain a safe living environment for you and other tenants.
Screening your potential tenants can save you a lot of trouble down the road, but what are the costs associated with tenant screening?
The Cost of Tenant Screening
Here’s a breakdown of the typical costs that come with tenant screening:
Background Checks
The background check process includes employment verifications, credit checks, and previous landlord checks. Previous landlords are contacted to discuss their experience with the tenants being checked. The cost of a background check typically ranges from $20 to $60 per applicant.
Credit Report
It can be important to verify that your potential tenant hasn’t had any trouble making payments in the past. A credit report check will help you decide based on the financial health of your tenant. These checks can range from $25-$50 per applicant.
Additional Verifications
There are additional considerations to keep in mind when screening potential tenants, such as employment verification. Checking the employment history of your potential tenant can confirm the applicant’s current employment status, income, and stability.
Who pays for these verifications is ultimately up to the property owner/landlord. Some landlords absorb the cost of tenant screening as part of their business expenses, viewing it as an investment in property protection and risk management. Taking on all these costs can also make a rental more appealing to potential renters, potentially reducing vacancy periods.
For more information on tenant screening and how GIL can help you through the process, contact us or request a free property management consultation!
