How best to screen prospective tenants
How can you thoroughly screen prospective tenants to find the best ones? Experienced property managers see hundreds of rental applications and believe this is a mix of ruthlessly checking their application, their income and rental history but also evaluating their character.
Outlined below are 6 key steps to go through to effectively screen potential tenants
1. Proof of income and ID
The rental application is essentially a series of questions to help you profile the prospective tenants. These answers are only valuable if you verify the answers as sometimes applicants may elaborate the truth. It is important your property manager ensures they have given 100 points of ID and proof of income, preferably their three most recent pay slips and or a bank statement highlighting their income.
2. The Reference Check & Screening
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 what type of tenant they were, did they pay on time, did the look after the property, was the bond refunded in full?
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.
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 a formal format of an interview, they can get a better handle on what your 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 them an idea of how they might treat your property when 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 tenants
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.
5. 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.
6. 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:
Whether they have children
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