If you’re new to the world of rental properties, or if you simply want to dig in and learn more about tenants, you probably have questions.
That’s great! We have answers.
The process of working with tenants and understanding how to do screens can be a confusing and sometimes overwhelming one. Thankfully, you’re not alone, and many other people have been down the same road you’re on. There are resources available to you to help you make great decisions and move forward with all the knowledge you need to be a great property owner. Thankfully, there are resources like this online tenant screening service https://www.ezlandlordforms.com/tenant-screening-services/ that make this process easy.
Here are a few common questions and answers about the tenant screening process.
Questions and Answers
“What is tenant screening?”
Tenant screening is a process available to private-property landlords and managers to help determine a potential tenant’s worthiness for a property rental. The purpose of the screening is to evaluate whether the tenant can fulfill the lease/rental agreement, and will be able to take care of the property. This process involves a set of evaluations that look at the potential tenant’s history, financial metrics, and so on, as well as things like referrals, employment verifications, and more. The tenant screening process finalizes in either the acceptance or denial of the prospective tenant.
“Why do I need to do a tenant screen?”
Simply put, if you don’t know anything about your tenant, you’re taking a risk. They might be a great tenant, but they could also be a nightmare. When you screen your prospective tenant to understand their history, you learn a lot about how they are likely to behave in the future based on how they behaved in the past. Yes, sometimes people change and improve and won’t repeat the same mistakes from the past. But this is more of an exception than it is the rule. If you don’t screen your prospective tenants, you’re taking a big risk that people who have willfully or negligently made mistakes in the past will make the same mistakes with you.
“How does online tenant screening work?”
The tenant screen process typically involves the potential tenant submitting an application, which usually involves an application fee.
These applications take in important intake of personal identification information (things like name, social security, birth date, etc.) and other items like address, employment history, criminal history, past eviction history, and more. The prospective tenant gives authorization that their data can be pulled.
Oftentimes, landlords will use a tenant screening company to build a screening report – taking into account things like important credit information, public records, and other info for evaluating potential tenants.
“What are the main elements of a tenant screen?”
Tenant screening reports typically utilize these components, and sometimes more:
- A consumer credit report from 1 of the 3 national credit bureaus (Experian, Equifax, or Transunion). This evaluates a potential tenant’s recent financial history and overall trustworthiness and dependability to pay their rent consistently.
- Bank statements (usually reflecting a three-month period)
- Eviction history search. This lets the landlord know whether the potential tenant has a history of nonpayment.
- Criminal records search. This gives background to a potential tenant’s criminal history.
- Sex offender registry search.
- Rental references.
- Employment verifications.
“Am I legally required to screen my potential tenants?”
No, but it’s a wise idea to screen your tenants to avoid problems in the future.
“How long does tenant screening take?”
Tenant screening typically takes a few days depending on the report provider.
“Do I have to ask tenants about their pets?”
Like many questions for tenants, the technical and legal answer is no. However, it would be a bad idea to not ask this question as you evaluate tenants.
Some people value their pets, and some people have many pets. If you’re willing to take on tenants with pets, you want to move forward very carefully, because pets have the potential to cause significant long-term damage to your property. Fish in an aquarium are one thing; a tenant with 15 house cats is something entirely different. It’s important to ask tenants about their pets and intentions, and quite simply, it may be a better outcome for you, in the long run, to opt for tenants who don’t have pets.
“Isn’t it a little personal to ask for bank records and detailed information about a prospective tenant’s finances?”
Again, legally and technically, you don’t have to ask this of the tenant. Some tenants might be a little bit sensitive to divulging their bank statements to you and allowing you to see into their financial records.
But the simple fact is, as a landlord you’re taking on significant risk by having a tenant in your home. If they don’t pay or refuse to pay, this can create a nightmare for you, something that might make you not want to rent your properties out anymore.
It’s important to understand a prospective tenant’s financial situation in great detail because this lets you know whether they make the income sufficient to live on your property. If you don’t know this information, you’re taking on a big risk.
For some landlords, a simple credit check might be enough, but a credit score and credit report don’t sufficiently detail whether a potential tenant will be able to pay their rent on time each month because it doesn’t describe their income.
