As a landlord, it’s important to protect your investments and make sure that a given applicant will be a reliable and qualified tenant. A guarantee that a tenant aligns with your priorities goes a long way, and conducting a thorough tenant screening is a necessary step to getting there.
Screening an applicant for their credit, eviction, and criminal histories are standard elements of this process. You should also contact references from previous landlords and employers. Going through this process for individual applicants requires extra effort and resources, and you may be wondering if all the extra time is worth the investment. Here are three reasons why tenant screening is integral to the success of your business and why you should start screening right away.
- Ensure Timely Payment
Tenant screening often includes credit and income checks for applicants. The credit information will give you insight into an applicant’s history with credit payments and whether they have outstanding debts that might interfere with their ability to pay on time.
The hassle of dealing with late payments is unpleasant, especially if you are awaiting payment for multiple amenities like trash, water or internet. A tenant who has a tendency toward late payments is more likely to become one that eventually stops paying.
Knowing that an applicant has a positive history with credit payments is a breath of relief as a landlord, and the effort that goes into finding this out is undoubtedly worth confidence in timely, reliable payments.
- Keep Your Property Safe
You spend a lot of effort, time and money maintaining your rental properties, and therefore it is necessary to ensure that your tenants treat it with respect and care.
Standard tenant screenings also often include contacting previous landlords. Doing so may give you insight into how the applicant behaved as a previous tenant. Landlords understand the business angle that you’re looking at applicants from and may provide important information on the reliability and behavior of the applicant, such as whether they upheld the property and treated it with respect.
Especially if you are renting out a multi-unit property, it is essential that any new tenants treat the property with respect. The last thing you want is a bad apple who runs perfectly good tenants away. Taking steps in the screening process to determine if a tenant is qualified might prevent these headaches down the road.
- Prevent Evictions
One of the biggest reasons to try to minimize the headaches of a difficult tenant is to avoid the difficulty and strain of evicting a tenant. If the above issues like late payments or disrespect to the property get serious enough to warrant eviction, the process that follows is strenuous, costly, and includes a court date. Your resources are better spent elsewhere.
Additionally, following an eviction, you are left with a new vacancy as well as the responsibility of turnover. This includes cleaning and paying for repairs on the space and finding new applicants to rent it out. This is a costly process, and all the while you’re missing out on rent payments.
Having trustworthy tenants makes all the difference. There is less of a likelihood that there will be issues that lead to evictions and more likelihood that they will remain tenants for a longer period of time. Front-loading the effort of identifying these qualified, trustworthy tenants is worth steering clear of evictions, turnovers, and the strain that they are bound to cause.
Conclusion
Tenant screening is an investment, but so is managing rental properties. This article takes a look at the big picture of why investing resources at the beginning of the process is so important, but there are a number of additional reasons that you will pick up on moving forward.
Adopting the tenant screening process allows you to think critically about what you expect out of your tenants and their relationship to your property. It also gives you the peace of mind that your property is in good hands and is a way of future-proofing your real estate business. If you haven’t already started tenant screenings, now is as good a time as any to start.