Tenant screening is very important when renting out properties to ensure a smooth and peaceful rental period. I used to be lazy when it came to screening tenants, but now we do a much better job, and get much better results. The timing of this guest blog from Michael Klazema could not have been any better for me! I hope it can help you with your screening as well. Don’t forget to check out my complete guide to investing in long-term rental properties for more information on my rental strategy.
Whether you are serving as a landlord at a popular apartment complex or are an independent citizen looking to take on landlord responsibilities by renting out a vacant room or house that you own, there is arguably no step more important to your job than screening your tenants.
Sure, maintaining your properties and being vigilant about repairs will make your “product” more desirable, and collecting rent each month is what will actually net you a profit for your hard work. However, having a thorough set of tenant screening procedures in place will save you the time and headache of dealing with unscrupulous tenants, both now and in the future. From the basic “first contact” questions to the actual criminal background check, we’ve collected five ways that tenant screening can work to make your life easier and less stressful.
1. Tenant screening will cut down on unnecessary meetings and property showings:
When you offer a property for rent, you will likely get a lot of responses very quickly. Some of the people you speak to may be great potential tenants. However, you can bet that you will also hear from a few very sketchy people. How can you determine which is which? By starting the tenant screening process right away—with a few informal “interview” questions after a potential tenant first makes contact—you should be able to quickly differentiate from the people you are interested in meeting and the people you want to stay far, far away from for as long as you live. This first screening safeguard will both cut down on the amount of time you spend showing your property and save you from having to meet unsavory and potentially unsafe people.
2. Tenant screening will help you create an illusion of demand:
If you don’t want to deal with hagglers who aren’t prepared to pay your asking rent rate, then try to make your property to appear as in-demand as possible. After your initial screening conversations, schedule two or three property showings and ask multiple tenants to stop by each one. Your potential renters will see that you are screening several other parties, and will be more willing to pay your rates – and be generally easier to deal with – as a result.
3. Tenant screening will scare away the riff raff:
Unscrupulous tenants who see that you are serious about running a formal screening process will often jump ship rather than jump through hoops, usually because they know that something in their background will disqualify them from consideration anyway. Make everything legal and official by requiring a formal application and a contractual lease. The riff raff will be largely scared away by your preparedness, and you will be left mostly with tenants who are honest, reputable, and serious about renting your property.
4. Tenant screening saves you from liability and loss:
No matter how honest and friendly your potential tenant may seem though, a background check could still uncover a nasty history. If a potential tenant has a history of making and distributing meth, that’s something you need to know about. After all, you don’t want to be held liable if said tenant turns your rental unit into a meth lab, accidentally blows the place up, and hurts or kills your neighbors – or you – in the process.
5. Tenant screening helps you sniff out potential trouble from the get-go:
Once you have decided on a tenant, walk him or her through your lease, section by section before finalizing everything. If the tenant expresses concern or anger at your “No Smoking” policy, your “Pet Rent” provision, or your “Rent Due” dates, then you can take that as a sign that said tenant might cause you trouble in those areas down the road. At this point, it’s your prerogative on whether to re-explain the rules to your tenant or tear up the lease and go back to square one.
Michael Klazema has been developing products for pre-employment screening and improving online customer experiences in the background screening industry since 2009. He is the lead author and editor for a background check blog and community. He’s the director of marketing at Backgroundchecks.com. He lives in Dallas, TX with his family and enjoys the rich culinary histories of various old and new world countries.
The thing that scared me the most after reading this article was the meth lab situation. I think a meth lab may be the land lords worst nightmare, because meth can destroy a house, but insurance won’t cover it. If your house burns down from a meth lab, then yes insurance might cover it (which happened to me), but a home could need to be completely gutted if a meth lab is discovered. Here is another related article on how to avoid disaster when buying a rental property.
For more information on how to buy the best rentals which will make the most money, check out my book: Build a Rental Property Empire: The no-nonsense book on finding deals, financing the right way, and managing wisely. The book is 374 pages long, comes in paperback or as an eBook and is an Amazon best seller.