How to Comprehensively Screen Your Tenants

How to Comprehensively Screen Your Tenants

When buying a rental property, landlords naturally want the best tenants to take up residence in their home. So, how can you thoroughly screen prospective tenants to find the best ones? 

Experienced property managers see hundreds of rental applications and believe the process to be a mix of ruthlessly checking their application, their income and rental history, but also evaluating their character.  

The 7 Key Steps to Effectively Screening Potential Tenants

1. Pre-screen potential tenants 

The screening process can start before tenants have even filled out an application. By asking a few simple questions, such as inquiring about pets or mentioning that you will be running background checks, you can reap significant rewards. Gauging responses can turn up red flags, or make you want to pursue these tenants. Either way it is a great first step to weed out the wrong type of tenants without wasting much time. 

Along with asking a few pointed questions before taking an application, in the modern age it is also wise to have a look at potential applicant’s social media footprint. If their accounts are public, landlords can ascertain a good picture as to what their private life is like, and therefore how they would treat a home. 

2. Proof of income and ID

The rental application is essentially a series of questions to help you profile the prospective tenants. The answers that applicants record can be very insightful and valuable. In the application process, most landlords will want potential tenants to have employment as a way to guarantee that they can cover the monthly rent.

Moreover, being able to pay the rent on a consistent basis is a major consideration when screening a potential tenant. Illustrating the ability for maintaining a property and ensuring the place remains in shape is also extremely important when a tenant is being screened. As such, having the tenant provide quality and relevant proof that can support these criteria should go a long way in meeting these requirements.

However, some applicants may put down employment information that is either completely falsified or not current. Therefore the answers to the application questions are only valuable if they can be verified. 

As such, it is important your property manager ensures that applicants have given 100 points of ID and proof of income, preferably in the form of their three most recent pay slips and or a bank statement highlighting their income. That way landlords can see that applicants have not only been honest, but can actually afford to live in the property. 

3. Assess their character at the inspection 

In most cases your property manager will be responsible for showing prospective tenants through your property. This is a good way for them to interview potential tenants away from the formal format of an interview. As such they can get a better handle on what the tenants are really like.

With just a quick informal chat, your property manager may be able to find out what kind of person they are, how their job’s going, if they move often and if they’ve ever had trouble in previous rentals.

Not only that, but their physical interaction with the house will give an idea of how they might treat a property once they move in. If you want to have extra certainty when making the final call, it might be good for you to join the tour, too.

4. Interview

The tenant interview is of course still a very important part of the screening process.  Like any interview, choosing the right questions to cut through the waffle and get the necessary information is a vital part of the property manager's role.

One question a property manager may ask is why they're moving. No good tenant should have trouble answering such a simple question, while on the other hand, they may find out that they've been evicted from their previous rental property.

If you're keen to suggest some questions to the property manager, having them ask about their job is a good one - whether they're currently employed and if not, where they get their income from.

An interview can be a good place to air out any grievances while also giving the tenant the ability to respond to any questions that a landlord may have. For example, if the tenant cannot provide three recent pay checks, landlords may view this as a red flag. However, in the interview the tenant can relay that they have taken holidays in order to look after a sick relative or something along those lines. If the landlord liked this tenant but the lack of employment was an issue, giving the tenant a chance to explain could put them back in the running for the property. 

5. Reference check 

This is the most basic one. Most typical tenant applications require at least three references, from personal referees, past employers, and previous landlords.

It is the role of your property manager to do a double-check that the references they've provided are accurate, as well as try and extract some character profiling information from them.  

The first and most important reference check will be a phone call to the property manager of their last rental, and the one before that if possible. They should ask things like: what type of tenant were they, did they pay on time, did they look after the property, was the bond refunded in full, etc. Contacting the property manager of their last rental can provide valuable and accurate information as well as an insight into whether or not the applicant was a good tenant. 

The reference check step should also include asking their employer to verify their income and to give an overview of their character, how reliable and responsible they are. This can give you a good idea of how dependably they'll keep up with the rent.

6. National tenancy database check

If the applicant has ticked all the boxes, your property manager will most probably make the final screening check on the National Tenancy Database. 

This information is not free, which is why it isn’t done earlier. This will show if the tenant has been blacklisted, give a summary of their rental history, bankruptcy information, court judgments and validates the identity of the applicant.

Finding out this information before you offer tenancy to the applicant can save a lot of heartache down the line if, in the worst possible scenario, tenants go missing without paying rent or damage gets done to your property.  

It is completely up to the landlord whether or not they approve someone with a criminal conviction or bankruptcy in their past – however, these are key points about a person that is good to know before putting your property in their hands. 

If the database check turns up anything that doesn’t look too favourable, you haven’t yet offered the applicants tenancy so there is still time to have a conversation before terms are agreed upon, if at all. 

7. You have the final say 

Your property manager will present you with a short list of potential tenants that they have fully screened and in many cases may recommend a particular tenant over another. However, as the owner, you have the final say on who you select to live in your property. 

Under the Equal Opportunity Act you must not discriminate against any of the applicants based on their:

  • Gender
  • Age
  • Race
  • Religion
  • Marital status
  • Sexuality
  • Whether they have children
  • Mental illness
  • Pregnancy
  • Disability

Asking for Help 

At the end of the day, the choosing of the applicant who will eventually become a tenant is up to the landlord. However, with the services and means that property managers have access to, hiring a property manager isn’t just beneficial for when your property is occupied. 

A property manager can help a property owner screen and judge (on the basis of facts) which applicants will prove the best tenants for your particular property. This kind of advice can prove helpful during the screening stages, as landlords know that property managers are doing everything from checking references to being character judges in order to comprehensively screen, interview, and then offer tenancy to the best applicants. 

When looking to hire a property manager, look no further than an LJ Hooker property appraisal. Our team of property management professionals will ensure that through a comprehensive application process, the right tenants are chosen for your rental property. 

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