Proper screening is the number one activity that any landlord can practice to maximize their potential profits from owning a rental property. A good quality tenant will do so much good for your property. In the same way, a poor tenant will do great damage to your rental property. Because of this, it is important to take care of your investment by taking the screening process seriously.
Today, we will be sharing some of the practices we have implemented while screening tenants at Keyrenter Tulsa.
Why Screening Your Tenants is Important
At Keyrenter, we find that landlords come to us for many reasons. However, one of the most common reasons a landlord will attain our services is because the screening process they were using was not working as it should.
Maybe the tenant did a good job of disguising the truth about their situation while they were applying for the property. In some cases, a landlord is simply so anxious to rent the property that they fail to see the red flags that would’ve prevented them from renting to that individual.
Unfortunately, this is a common problem. Many landlords are far too casual about the way they screen tenants for their rentals. When a screening process fails, a landlord might find themselves having to evict a tenant.
By making assumptions based on how the tenant presents themselves, and not based on facts, landlords find themselves renting to tenants who can not afford the property.
Two Types of Tenants
Every property owner realizes that there are two types of potential tenants. Top-quality tenants will take care of your property. They will treat the rental as if it is their own and address any minor issues themselves. When they move on to a new housing situation, they will leave your rental property in excellent condition. The only downside to top-quality tenants is that they may leave to purchase their own home at the end of the lease.
On the other side of the spectrum are bottom-tier tenants. These are the tenants that landlords should try to avoid at all costs. A bottom-tier tenant will create a loss of income by not paying rent or causing other expenses. When they move from your rental, you will likely have higher cleaning and renovation costs due to the damage they cause.
Additionally, bottom-tier tenants are often evicted from the property. Renting your property to bottom-tier tenants will cause headache, heartache, and great frustration. For this reason, it is crucial to thoroughly screen each tenant before they sign a lease for your property.
How to Screen Your Tenants
Screening tenants for your rental properties is much like putting together the many pieces of a puzzle. When all the pieces of the puzzle come together, you are provided with a clear picture. In a similar way, the many parts of the screening process come together to provide a landlord with a clear vision of their potential tenant.
Tenant screening for rentals is all about connecting the dots and recognizing red flags that pop up. It is important to not suppress your gut feeling when something just feels off in a situation.
Some of the most important parts of the screening process that we use at Keyrenter Tulsa include the following:
- Credit Score
- Criminal Record/History
- Evictions/Negative Landlord History
- Questioning Current/Former Landlords
- Questioning Current/Former Employers
- Speaking with References
- Internet Research (Google & Facebook Searches)
Each individual over the age of 18 that will be living in the property is required to go through the screening process. By conducting thorough research in these areas, you will be provided with valuable information as to whether the potential tenants would be a good fit for your property.
Beginning the Screening Process
At Keyrenter Tulsa, the screening process begins before the potential tenant even views the property. To view a rental property, each individual must fill out a pre-screening questionnaire.
This includes things such as their move-in date, pets, income, and other basic questions. We will not show a property to an applicant that does not meet the income requirements we have established. We require three times the monthly rent in proven income. They will be required to prove this income upon submitting a rental application.
By starting the screening process early, you are able to save time by only showing the property to candidates who pass the basic qualifications.
We realize that finding the right tenant for a property could take a bit of time. Because of this, we will often begin the pre-screening process approximately 60 days before the house will be vacant. This provides us ample time to properly screen interested tenants. Our ultimate goal is to have a new lease signed once the property becomes available.
Starting the Rental Application
After the potential tenant has viewed the property and decided to submit an application, they will also be required to pay an application fee. Requiring an application fee ensures a modest level of commitment to the property. It also increases the likelihood that the individual is serious about moving into the property if their application is approved.
Screening the Tenants
At Keyrenter Tulsa, we use a property management software to screen for FICO credit score, criminal record, sexual offender registry, and eviction/negative landlord history. The ideal situation for a landlord is finding a tenant who has an excellent credit score with no demerits or criminal records. However, tenants with an excellent credit score will almost always move on to purchasing a home of their own.
In most cases, we try to avoid renting to tenants who have a low credit score or great amounts of debt. The one exception to this policy is when the debt is due to medical or educational fees.
We also have screening questions that allow us to verify rental history, employment history, and personal references.
Using Online Research for Screening
One important part of the screening process that is sometimes overlooked by landlords is conducting internet research. By doing a simple search on Google or Facebook, you may learn some interesting information you would not otherwise know. For example, a Google search for the individuals’ names may provide you with additional information about their life. On Facebook, you may find pictures of the tenant with their pet even though they said they do not have a pet.
This online information is easily accessible to the general public. It can provide you with additional insight into situations that are not covered by a credit report or criminal record.
Final Thoughts on Screening Practices
Practicing proper screening practices for your tenants will take a significant amount of time and effort. We have spent many years developing our screening process. We truly believe that proper screening is the best way to maximize the income from a rental property.
The most important thing to keep in mind during the screening process is that it is better to wait to find the proper tenant than to rush into a situation that is less than ideal. Rushing into a rental agreement with a tenant that is not a great fit can result in a loss of income. It will also be a source of great frustration for you as the landlord. By properly screening potential tenants, you can find a tenant that will make your job as a landlord both easy and enjoyable.
At Keyrenter Tulsa, we are proud to help our clients find tenants that will take care of their rental properties and provide them with a positive landlord experience. If you are interested in learning more about our screening process, or if you would like us to help you screen your tenants, contact our team here.