6 Mistakes Landlords Make Screening Tenants

by Chris on March 25, 2013

Every landlord understands the importance of choosing quality tenants. But not every landlord’s tenant screening policy is as effective as it could be.

A landlord who cuts corners with tenant screening is no different than another business owner who hires an employee without first verifying the person’s qualifications.

In both cases, the business owners risk theft, liability and income loss.

But unlike other business owners — who can simply fire bad employees — landlords have a much harder time getting rid of  problem tenants.

Avoid income loss in your rental business by avoiding these common tenant screening mistakes:

1. Not screening each and every tenant.

A landlord cannot predict with absolute certainty whether an applicant will become a problem tenant. But screening every tenant greatly reduces the risk of inheriting a bad tenant. Trusting an applicant’s appearance or demeanor and judging the rental application on its face without verification are risky mistakes. Problem tenants know how to play that game.

That’s why it is important to demand a tenant background check from every tenant, which includes all adults in cases of multiple occupants.

2. Not starting the screening process early enough.

Tenant screening is a process of elimination throughout each phase of leasing, and that process begins with the first communication. The longer the process lasts, the more information the landlord will have to reference, and the more likely any inconsistencies will be revealed. Starting early also discourages bad tenants from applying, and that will save time.

3. Not realizing a vacancy is less costly than a bad tenant.

In the rush to fill a vacancy, especially in a property subject to a looming mortgage payment, landlords run the risk of making mistakes. Professional tenants — the ones who burn landlord after landlord — are watching for this very situation.

Bad tenants don’t just skip out without paying rent — sometimes they fight the landlord’s eviction and remain in the property for months. While they live rent-free, they have no compunction about damaging the property. Because the potential costs to repair property damage or to prosecute a prolonged eviction are virtually unlimited,  it’s safe to assume it will cost less to allow the property to sit vacant a few days — or even a month — while searching for the right tenant.

4. Not applying the same tenant screening policies to everyone.

Screening policies that vary from tenant to tenant can give rise to discrimination claims — and the associated income loss.

What’s more, a standardized policy allows the landlord to use the best screening techniques for each new tenant. That greatly increases the likelihood of discovering a problem tenant.

5. Using the wrong criteria for evaluating applicants.

For screening to be most effective, the landlord must know the end game — the specific qualifications they are looking for in a tenant. Inappropriate criteria that don’t relate to ability to pay rent and care for the rental property limit a landlord’s choices, and can give rise to liability if an otherwise qualified applicant is rejected. For instance, one landlord rejected tenants for not maintaining an open line of credit and was sued for discrimination; another could only envision students in her rental, and turned away all other qualified applicants.

6. Not checking with current and previous landlords.

An experienced landlord writes, “I have rented to over three dozen tenants over the years and never had anyone call to check a reference on a former tenant. It’s scary how lazy and careless most landlords are.”

Harsh words, but they convey an important message. Imagine the frustration a landlord feels when a problem tenant has no problem finding a new landlord.

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 in 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.

{ 1 comment… read it below or add one }

Marv March 25, 2013 at 9:33 pm

TVS/ATS member received a set of Operating Instructions after sign up. The Tips therein advise the steps that you should take to minimize risk of rental income loss. That includes contacting the current and if possible the previous landlord. http://www.criminalfraud.com click on landlord fraud, gives you some insight with respect to interviewing a current or previous landlord. http://www.landlordfraud.com is another educational website for landlords and property managers. It takes 30 minutes to develop a tenant screening process that you can use in each and every instance. It will save you time in the long run, it will minimize your risk of rental income loss and it will ensure that you cannot be accused of rental discrimination if used for each rental applicant. Run your rental business like a professional…you will benefit from it. Educate yourself with your State/Provincial tenancy laws. Professional Landlord Abusers will take advantage of you if you don’t.

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