Why You Should Do a Tenant Check?
Every landlord dreams of a trouble-free and solvent tenant. From arranging property repairs to covering missed rental payments, not having the right tenant can end up being a real burden in the long run.
That is why so important don’t underestimate the screening process. Thoroughly checking your potential tenant before you hand over your keys will give you valuable insights that will help with your decision-making process, and save you time and money later on.
Jointl’s guide explains everything you need to know about tenant screening to help you find the ideal tenant. Ultimately, carrying out even basic screening on an applicant will make sure they are who they say they are, can afford the rental payments, and can be trusted to look after your property.
What is a Tenant Screening? A tenant screening is simply a way to check whether a prospective tenant is reliable and able to keep up with monthly rent payments. The vetting process looks at a number of different areas, which can include:
Pre-screening
This stage will help to assess if a prospective tenant meets your minimum requirements and set out your expectations. A pre-screening check could be as simple as arranging a phone call to ask a few basic questions. The questions will depend on your requirements, but the most common ones are whether the applicant is in employment, what type of job they have, if they smoke or if they have any pets.
Proof of Identity
Photo ID is usually preferable, such as a driver’s license or passport. If this isn’t available, other forms of identification are sometimes accepted, such as a signed bank card. A driving license could be an ideal choice because you can then confirm their address at the same time.
Financial Situation
Most landlords’ primary concern is whether a potential tenant will be able to keep up with their monthly rental obligations. Running a credit check allows you to see proof of this. Usually, this part of the screening process includes:
- Proof of employment – such as a contract, a letter from an employer and/or recent payslips
- Bank statements, usually the previous three months (particularly if someone is self-employed)
Bank statement will help you to understand: (1) What they spend their money on, (2) When and how much they get paid, (3) How much disposable income do they have.
There are plenty of online sites you can use to carry out a detailed credit check on potential tenants, Experian, Equifax, and TransUnion are just a few of the agencies that offer credit checks for landlords. Typically, such screening will include information on whether they pay their bills on time, about credit card utilization, total debt, loans, civil judgments against the applicant.
First of all, remember that your prospective tenant has to consent to a credit check for you to legally run one on them. Someone who is unwilling to consent to a credit check, though, is showing you another red flag.
A person missing a couple of payments in the past or having a poor credit score doesn’t always mean they’ll be a bad tenant. However, if someone has large outstanding priority debts like mortgage arrears, they might be forced to pay those over paying their rent. For this reason, their current financial situation is much more telling than a tenant credit check.
If you’re concerned that a certain tenant may not be able to afford their rent, you can ask for a guarantor. If no guarantor is available, you can ask for a higher deposit upfront to cover any potential costs that may arise.
Criminal history report
In addition to running a credit check on your prospective tenants, a tenant criminal background check will reveal the criminal history of a prospective renter for previous felonies, sex crimes, and other relevant public criminal offenses.
Before running a criminal background check you should also receive consent. Most U.S. states will allow you to reject potential tenants if they have been convicted of violent crimes, sex offenses, or drug offenses.
References
Reference check is one of the most important parts of tenant screening. It is a reliable way to identify if the tenant is trustworthy that does not only include paying rent on time but also respecting both the property and the landlord.
Common Types Individuals Used as Tenant Reference Checks:
1. Employer References
Feedback from a current employer will help you verify the details of an application regarding employment. So, not sure what to ask? Below are examples of some great questions to have on hand:
- What was the tenant’s original date of hire?
- What are the terms of employment? Is there a trial or contract period?
- What is the tenant’s position in the company?
- Will the current employer continue to employ the tenant?
- How does the tenant get along with co-workers?
2. Previous Landlords
If the tenant has previously lived in rental properties, references from their previous landlords can be invaluable and present a good opportunity to identify any gaps in the applicant’s rental history or in the landlord contact details they provide. It might be a good idea to ask:
- Would they rent to this tenant again?
- Did the tenant cause any damage to the rental property?
- Did the tenant have any problems with the neighbors?
- Did the tenant receive their deposit back? If not, why?
3. Personal References
While family and friends can be biased, they can paint a more well-rounded picture of the lifestyle and character of the potential tenant. Questions to ask friends or family could include:
- How long have you known the tenant?
- How does the tenant spend their spare time?
- Does the tenant smoke?
- Does the tenant have pets?
To carry out a comprehensive tenant check you could take three or four references from previous landlords or employers, and friends.
Want to make it even easier and save time and avoid stress?
Jointl online reference check tool will help you to automate reference check and find out first-hand what the tenant is like. It’s simple, fast, and convenient for all: you, reference, and prospective tenants.
Create an account to start checking three tenants per month for free using ready-to-use reference templates.