As a property manager or landlord, have you ever felt dizzy over the tenant screening process? How do you sift applicants to find the perfect match for your rental property— without violating laws or using an expensive tenant screening service? We understand the pressure that comes with these responsibilities. That's why we prepared this article to simplify your tenant screening process and remove the stress surrounding it.
With our screening partners, TransUnion and TazWorks, we give you the power to conduct detailed and efficient screenings so you can make the right decision about your rental.
Let's dive into the five strategies to get you started with tenant screening, evolving that Mount Everest climb into a walk in the park.
5 Strategies for Better Tenant Background Checks, Summarized:
- Establish clear screening criteria compliant with Fair Housing Laws.
- Take advantage of screening tools designed for credit and background checks, such as TenantCloud, TransUnion, and TazWorks.
- Pre-screen tenants with a detailed application process.
- Conduct thorough reference and background checks, verifying employment and previous tenancies.
- Use a property management platform to streamline the entire tenant screening journey.
1. Establish Clear Screening Criteria
It’s important that landlords and property managers start off on the right foot in order to avoid any issues during the screening process. But what does this even mean? Your goal is to set clear, fair, and legally respectful screening criteria. Our goal is to simplify these steps for everyone. Let’s break down the essentials.
Know the Laws
Before you jot down your rental criteria, familiarize yourself with the Fair Housing Laws, the Fair Credit Reporting Act (FCRA), and the Fair Housing Act (FHA). These laws protect applicants from discrimination and ensure their privacy and rights are respected.
- Fair Housing Laws ban discrimination based on race, color, religion, sex, disability, familial status, or national origin.
- The Fair Credit Reporting Act (FCRA) governs how you can use consumer report information, including credit reports and background checks.
- The Fair Housing Act (FHA) further highlights the illegal grounds for refusing to rent to potential tenants based on the protected classes.
Drafting Your Screening Criteria
Adventure time! Now, you can start preparing your tenant screening checklist. Here’s what we recommend to include:
- Income to Rent Ratio: Shortly, the potential tenant’s gross monthly income should be at least three times the rent. We want them to comfortably afford the rent after other expenses and without having to count every last cent.
- Employment History: Pro tip - consider asking for tax returns or pay stubs as proof of income for gig workers or freelancers.
- Rental History: Previous landlord references can provide insights into a tenant’s reliability.
- Credit Check: A credit report can reveal a tenant’s financial responsibility.
- Background Check and Criminal Background Check: Beyond financial responsibility, you’ll want to know if there are any criminal records.
Using Technology to Your Advantage
Once you have your criteria set, consistency is key. Apply this tenant screening checklist to all applicants to avoid any claims and protect yourself. In today's world, it's best to keep consistent records, that's why we created a cloud solution for all your rental details. We also streamline the tenant screening process for you, by allowing you to conduct thorough credit and background checks right through our platform from almost every smart device (unless you’re still using a beeper or Palm Pilot).
Rental criteria are the mother Earth of a successful screening. Think of it like pearl hunting; the process takes effort, but in the end, you find a shiny new, ideal tenant. Follow these tips for establishing your rental criteria.
2. Utilize Comprehensive Online Screening Tools
There are plenty of online screening tools available to make your life easier. That’s why we partnered with TransUnion and TazWorks to offer the most comprehensive tenant screening service on the market. Here is how these tools can be your ally in the tenant screening process:
Credit Check
A credit check gives insight into the tenant's financial responsibility. By partnering with TransUnion, we ensure you get access to detailed credit reports, presenting a clear financial picture of your potential tenants. This helps you make an informed decision and reduces the risk of late payments or financial disputes.
Background Check for Renters
Rental background check provides a complete look into a potential tenant’s past. This step is not about judgment but about ensuring the safety and security of your property. It’s about peace of mind.
Income Verification
If you don’t want your business to become a charity, verifying a tenant’s income ensures they can afford the rent. This step can prevent future challenges with unpaid rent. With TenantCloud, tenants can easily submit their proof of income online, which you can quickly review and verify.
Eviction Report
Past evictions can be a red flag and possibly indicate a problematic applicant. Our eviction history reports give you a glimpse into the applicant's rental background, helping you to avoid potential issues down the line. Checking an eviction record is like uncovering a plot twist in a mystery novel—essential for making sure you’re making the best choice for your property.
How We Can Help
With the importance of the tenant screening process in mind, we created different bundles with tenant screening reports tailored to your needs. Now, there is no need to wait for a rental application; you can request all the information with the click of a button.
- Credit Check powered by TransUnion provides a detailed financial history, credit score, and payment history of potential renters.
- Background Check through TazWorks offers a comprehensive look into a tenant's criminal history and past evictions.
- Income Verification ensures tenants can afford the rent, reducing the risk of financial issues down the line.
- Eviction Report highlights potential red flags in a tenant's rental history.
We’re continuously improving the tenant screening process to make it as efficient as possible, including the recent addition of the Income Insights Report and County Search Add-On. These packages offer more peace of mind when looking for ideal tenants.
3. Pre-Screen Tenants Through Initial Communication
Pre-screening, or initial communication, can greatly help in finding the perfect tenant. Here's an effective approach to take:
Include Renter Details in Your Listing
A well-crafted online rental listing is your first line of defense against applicants who don’t fit your criteria. Include as many necessary details about your property in your listing to eliminate non-qualified applicants, such as the rent amount, pet policies, and any specific qualifications you require (like a minimum income threshold). This clarity helps potential tenants determine if they qualify before contacting you.
Related: How To Write a Rental Listing Description
Utilize a Detailed Rental Application
If you value time and money (and who doesn’t), use a detailed rental application form when screening prospective tenants. Here’s a proven recipe:
- 1 tablespoon of sections for personal information
- 2 ounces of employment history
- ¾ cup of previous landlord references
- 6 cups of consent for credit and background checks.
You can also read the detailed landlord's guide to tenant screening that we prepared for you.
The Role of Landlords in the Pre-Screening Process
If you want transparent answers, be honest and direct. (We remind ourselves this every day.) Communicate clearly, listen carefully, and assess objectively. The goal is to ensure that prospective tenants understand the terms and conditions of the lease and that they meet your established criteria.
By following these steps, you can effectively filter prospective tenants before moving on to more in-depth checks. The first impression goes both ways. Being professional and transparent in your initial communications sets the tone for a respectful and successful landlord-tenant relationship.
4. Conduct Thorough Reference and Background Checks
After navigating the initial screening and application process, the next step is diving into reference and background checks. Here's how to do it efficiently and thoroughly:
Verify Employment and Income
Confirm your potential tenant's job and income. Ask for recent pay stubs or bank statements, and call their employer. This reassures you of their ability to pay rent and offers insight into their stability.
Reach Out to Previous Landlords
Contact former landlords for valuable information on the tenant’s habits and payment punctuality. A key question is, "Would you rent to this person again?"
Run a Comprehensive Tenant Credit Report
Access detailed credit reports through our partnerships with major bureaus like TransUnion. It’s not about perfect credit, but understanding their financial habits. High debt or late payments could be red flags.
Conduct Background Checks
Powered by TazWorks, our background checks reveal any criminal history or eviction records. This step is crucial for making informed decisions while adhering to the Fair Housing Act for non-discriminatory practices.
Follow these steps and find the best fit for your property all from your favorite couch.
5. Leverage Technology for Efficient Screening
In today’s digital age, using technology is not essential, it's an everyday routine for most. People check their phones an average of 58 times each day. And the same goes for landlords and property managers. With so much useful technology at your fingertips, there’s no reason you need to stick to the same outdated, time-consuming management system you’re used to.
With TenantCloud, you can simplify every aspect of property management so you can spend more time with your family and less time with your emails. Our cloud-based platform streamlines the entire rental process, from tenant screening and applications to rent collection and maintenance requests.
Conclusion
Congratulations. You now know how to master the background check like a boss. By creating a robust tenant screening checklist, setting clear rental criteria, using comprehensive online tools, engaging in pre-screening, conducting thorough checks, and leveraging technology, you can save time and find the right tenants quickly.
