3 Things Landlords Need to Know About Tenant Screening

by Chris on May 6, 2019

Tenant screening may the most important part of property management, but it doesn’t need to be the most difficult. Don’t make it harder than it has to be. Avoid these mistakes and keep your properties profitable for years to come:

Your Rental Ad Could Be Your Undoing

Wouldn’t it be frustrating to lose all the year’s profits before a tenancy ever begins?

That’s the risk some landlords run with rental ads. Facebook just announced it is revamping its rental ad platform after settling a major lawsuit claiming that its targeting options violate the Fair Housing Act.

Several private employers currently are being sued over their use of Facebook job ads. The same thing could happen to individual landlords who don’t change their practices. One discrimination claim can eat up a year’s profits — and the prospect doesn’t need to move in to make a claim.

The same problem can occur with other platforms, including posting rental ads only in exclusive settings like churches or affluent neighborhoods. Simply put, landlords cannot pick and choose which renters get to see ads for housing.

Words matter when it comes to rental ads. The ad should describe the property and amenities that benefit everyone. Avoid any words or phrases that would discourage some prospects:

References to family status like “married couple”, “singles”, “adults” or “children”;
Religious references such as proximity to a place of worship or parochial school;
Exclusions based on number of years of employment, previous drug or alcohol use, blanket criminal history, or subsidized income.

The Easy Way or the Hard Way?

The hardest way to screen tenants is to do it based on gut. Deciding whether the applicant is a good fit based on subjective standards means that a landlord must spend considerable time searching for the tell: Is this the perfect tenant, or the perfect con? The signs are there, but how much time will it take to uncover the mystery?

Don’t waste time attempting a psychological profile or playing private detective. Focus on qualifications. The best tenant is the one who is qualified.

Collecting the necessary information — and only the necessary information — speeds up the tenant screening process. Qualifying questions should include:

Why are you moving?
Are you ready to move?
Did you/will you provide notice to current landlord?
Do you have sufficient income to cover the rent?
Is that income independently verifiable?
How many people will be occupying the property? How many adults?
Are you able to meet the specific restrictions, such as no smoking?
Have you been evicted?
Can you provide previous landlord references that confirm on-time rent payments and no property damage?

Garbage In, Garbage Out

Bad tenants know the game. Unfortunately, they are better at scamming than some landlords are at screening tenants.

One common trick is to talk the landlord out of a tenant background check altogether. It is stunning to consider what a landlord stands to lose by falling for that scam. Other tenants will provide misleading or incomplete information to hamper tenant screening, hoping the landlord will get discouraged and give up. Some problem tenants are so brazen they will provide false information or fake their identities to throw a landlord off the scent.

A tenant background check is only as good as the information provided. That’s why it’s crucial to verify specific details of the rental application, beginning with checking a photo ID. A good credit report or stellar references are of little use if they don’t belong to the applicant. Tenant screening is all about verification and cross-referencing. Scammers cannot fake independent information, like a tenant credit check. That’s why they don’t want you to look.

This post is provided by Tenant Verification Service, Inc., helping landlords reduce the risks of renting with fraud prevention tools that include Tenant Screening, Tenant Background Checks, (U.S. and Canada), as well as Criminal Background Checks, and Eviction Reports (U.S. only).

Click Here to Receive Landlord Credit Reports.

Disclaimer: The information provided in this post is not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.

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