Why a Proper Tenant Screening Process Is Important

Screening tenants thoroughly and consistently is the important first step to a successful and positive rental experience. Good tenants will likely pay rent on time, communicate honestly, help you take care of the property, and follow the expectations and responsibilities spelled out in the lease agreement. Bad tenants will do the opposite, and they may cost you money with late payments, property damage, and evictions.

If you’re not sure you have the time, knowledge, and resources to effectively screen your tenants, you should consider hiring Peak Property Management to protect your investment. We have systems and processes in place that can ensure tenants are screened properly.

There are a few essential things to look at when you’re screening your potential tenants.

Rental Criteria and Fair Housing

Before you begin collecting applications and screening tenants, it’s important that you understand the fair housing laws. You cannot discriminate against applicants based on race, color, national origin, sex, familial status, religion, or disability. Most landlords don’t discriminate intentionally, but the way you handle each application could lead you to discriminate unintentionally, and that can lead you to an expensive lawsuit. Screen every applicant consistently.

Every applicant will have a unique set of circumstances. It is critical to format your application in such a way that each applicant can be evaluated fairly. An effective application process is the first step in acquiring quality tenants. When you have this in place and you follow it every time you screen, you won’t make an expensive fair housing mistake.

National Eviction and Criminal Checks

Your first step should be to check for a criminal history. Make sure you do a national search, not just a local one. When you’re putting together your criteria, decide whether you will allow a tenant who has a criminal history. Be sure to be aware of current HUD guidelines and directives that apply to applicants with a criminal history.

Look for past evictions as well. Again, use your best judgment when you decide whether you will accept a tenant with a prior eviction. Just be consistent. Maybe someone who was evicted 10 years ago but has done a good job establishing a solid rental history since then is acceptable but an applicant with four evictions in the last five years is not. Set some standards.

Credit, Income, and Financial History

Check credit, but don’t get too hung up on the credit score. Finding someone with perfect credit will be difficult. You’re looking for someone who demonstrates financial responsibility and a record of paying their housing bills on time. A history of late or unpaid utility bills might be a red flag. You don’t want to see any debt that’s owed to former landlords, apartment buildings, or property managers, either.

Checking Rental References

A good way to get a feeling for how a tenant has behaved in the past is by checking rental references. Call or email current and former landlords. Find out if rent was paid on time, the lease was followed, and any property damage was left behind. Ask about pets and whether proper notice was given before the tenant moved out. These reference checks can be invaluable in evaluating how tenants have performed in previous rental homes.

If you need help with tenant screening or you have any Bozeman property management questions, please contact us at Peak Property Management. We’d be happy to assist you.