The majority of landlords know the key things to look for when evaluating a prospective tenant: credit history, criminal record, and prior rental behavior. Let’s quickly review the most important elements of a full tenant screening, and then take a look at some of the more subtle ways to weed out tenants.
According to a 2016 SmartMove user survey, 90% of landlords feel they have a good understanding of what credit scores mean. Landlords who use SmartMove online tenant screening are provided with a ResidentScore, which is specifically built to look at the outcome of a lease and predict bad renter outcomes more accurately than a typical credit score. A low ResidentScore generally indicates that the tenant is less likely to make his or her monthly payments on time.
Good tenant screening should include a credit check, eviction history and background report. But there are less obvious aspects to evaluate. Read now.
A criminal background check is an important way to find out if your applicant could put your rental property or the neighborhood at risk. Not all criminal records may be deal breakers, but it’s important to uncover previous criminal convictions such as relevant violent felonies that could increase risks to other renters. Using a screening service with a criminal background check will allow you to find out the nature of a crime, if any, and from there you can use your best judgement. SmartMove searches 200+ million criminal records from both state and national databases, and provides accurate results in a matter of minutes.
TransUnion SmartMove data based on customer experiences found that total eviction-related expenses for property managers averaged $3,500 and can reach as high as $10,000. The eviction process is both expensive and time-consuming, especially when you consider that it could be prevented with a thorough tenant screening before they move onto the property. It’s important to order an eviction report as part of your tenant screening package since prior evictions are highly predictive of future evictions. TransUnion’s analysis of nearly 200 properties found that evicted residents have nearly three times as many prior eviction and rental-related collection records as non-evicted residents.
Be aware of these tenant screening warning signs
However, even beyond standard tenant screening reports there are certain measures to take in order to further cull your short list and make sure you’re renting to the best possible candidate. Trends indicate it’s a landlord’s market in many areas of the country, as there are many renters in the market due to a major shift away from homeownership and into rental housing. You can be more selective to whom you rent.
When it comes to reducing your risk as a landlord, the old saying “the devil is in the details” is worth keeping in mind. Taking a closer look at a potential tenant will help you make sure you’re not missing any of the less obvious warning signs that may come up during the tenant screening process. If the tenant falls into any of the categories listed below, you may want to take a closer look at these applicants’ backgrounds.
Here are some aspects to consider when doing a thorough screening
"Any applicant who asks you to skip the tenant screening step should be a big warning sign"
1. Asking you to skip formal tenant screening
Any applicant who asks you to skip the tenant screening step should be a big warning sign. Often these applicants are in a hurry to move and want to sign the lease right away. While it can be tempting to move someone into your unit quickly, this could be a sign that your applicants have information in their reports that don’t meet your screening criteria. To ensure your applicants meet your screening requirements, you’ll want to run tenant credit report, criminal history check, and eviction check before making a rental decision.
2. Wanting to give you a copy of their credit report
You may come across an applicant that wants to give you their credit report directly so you skip the formal tenant screening check. Think twice before accepting a credit report directly from an applicant since this information may be outdated or inaccurate. You’ll want to let your applicant know that it’s your policy to run your own background checks and obtain a copy of the report directly from a consumer reporting agency.
3. Moving too often
You may want to take a closer look at a tenant who has a history of moving frequently. Do they move frequently for work? Do they move because of issues with their landlord? An applicant who blames moving frequently on their prior landlords should make you think twice. If they move frequently for work, you should be prepared in case they break the lease early. Be sure to require a fee for breaking the lease and a minimum of 30 days’ notice for leaving early, and have it clearly written out in the lease.
4. Switching jobs frequently
Someone who changes jobs frequently may also need to change location frequently, which means breaking the lease early. Additionally, someone who frequently changes jobs may be unreliable or have unstable income, which could mean frequent late payments or even non-payment. While it’s true that they may still have stable income even with frequent job changes, you’ll want to be sure to verify their employment and other relevant references. You can also use LinkedIn to verify your applicant’s employment history.
5. Long gaps in employment
Perhaps they took a gap year after school to travel, or they were a stay at home parent. Double check to make sure the applicant has a valid explanation. The last thing you want is a tenant with unstable income.
6. In a hurry to move
An applicant that’s in a big hurry to move could be a warning sign. While there may be perfectly explainable reasons, be sure ask your applicants why they’re moving and to get an eviction report on your applicant to check their rental history.
7. Missing or inaccurate information
An applicant who only partially fills out a rental application should prompt you to ask follow-up questions. Additionally, think twice before renting to an applicant who gives you different information from what you find on their tenant screening reports. For example, if a tenant tells you they have no prior evictions but you find an eviction on their screening report, you may want to take that factor into consideration when making your decision.
The most critical step you can take to protect your rental property is to use a reputable screening service. Credit, criminal, and eviction reports will go a long way in helping you find the best possible tenant.
TransUnion SmartMove online tenant screening is the solution for great reports, great convenience, and great tenants. Designed for the independent landlord, SmartMove users receive a TransUnion credit report formatted exclusively for rental screening purposes, a criminal report drawing from hundreds of millions of national and statewide criminal records, a national eviction report, and a clear, reliable leasing recommendation.