Common Tenant Screening Mistakes: 6 to Watch Out For When Renting Your Next Unit
Some of the worst mistakes you can make as a landlord happen during the tenant screening process. When you fail to screen your tenants thoroughly and properly, you end up with severe headaches with rent collection, co-applicant ghosting, and unit repairs which equate to rental income loss, eviction costs, and safety risks. Here are 6 tenant screening mistakes to watch out for when you go to rent your next unit out.
1. Skipping the Tenant Screening Process.
As a landlord, it is always in your best interest to screen your prospective applicants, and charge an application fee for those who are interested in your unit’s listing. Even if the unit has been sitting vacant for months, and you are desperate to fill it, going through the proper screening process is going to save you a lot of potential problems down the road. Always get those credit checks early on, and if a prospective applicant gives vague reasons for not providing required information, give them a hard pass. Don’t be lulled into a false sense of security from potential tenants that have a few months of rent ready to go, or those who make promises on “coming up with” the deposit at a later date.
2. Choosing Instant Screening Services.
It is very tempting to go with automated, instantaneous screening results, as quicker results means maximizing profits by filling units as quickly as possible. Unfortunately, when using these kinds of instant methods to gain information, you don’t have a good frame of reference of what is accurate data. This means that you may get screening information that is false regarding a tenant’s background, which can cause problems for you. Always manually access tenant screening information, hand-compile your own reports, and fact-check the data.
3. Not Reading the Full Credit Report.
While knowing a single number when it comes to a credit check report is a good indication of whether someone may be a great tenant for you, a single number isn’t the full story. Every individual has unique circumstances that contribute to the number you see, so keep in mind that a low credit score may not be an immediate red flag if the individual can prove that they pay all of their monthly bills on time. So, make sure that you are taking the time to read the entire credit report. Also, always run a credit check yourself to ensure that their numbers match up; yes, people will use Photoshop if they are desperate.
4. Opting Not to Screen Co-Applicants.
Everyone who is applying to live in the unit needs to be heavily screened, including co-applicants. If you opt out of screening them, you could end up with major problems down the road if they choose to suddenly stop contributing to rent or choose to simply move out with no notice. The same goes with married co-applicants and their children, as well as, co-applicants who are in a relationship with one another. Look for things like prior evictions, low credit scores, and criminal history.
5. Failure to Comply With Local Housing Laws.
Always make sure that you know the fair housing laws in your area before beginning the tenant screening process. These laws are enforced to prevent discrimination against tenants for things like their gender identity, race, religion, or marital status. If you fail to comply with these housing laws, a prospective tenant could file a lawsuit against you.
6. Not Thoroughly Checking: Employment, References, & Bank Statements.
Always have prospective tenants and their co-applicants fill out a full application form that includes their references, bank statements, and employment history. However, don’t just take their word on the information they provide; make sure to double-check their claims so that you don’t end up dealing with fraud. For instance, if you suspect that they’ve provided a friend’s number as their previous landlord, ask open-ended questions about the details surrounding their move-in and move-0ut to expose the lie.
At Kanga Property Management, we are committed to helping property owners avoid common tenant screening mistakes. We can take over all the responsibility of being a landlord so you can focus on other things. Call us at (877) 589-3591 or contact us today to start making the most out of your real estate property.