But the question we are always asked is "How can you effectively screen prospective tenants to ensure you make the right choice?"
When purchasing a rental property, landlords naturally aim to secure the best possible tenants. But the question we are always asked is "How can you effectively screen prospective tenants to ensure you make the right choice?"
As an experienced property manager, I have encountered numerous rental applications and believe that the screening process involves a combination of rigorous application, income and rental history checks, as well as evaluating the character of potential tenants. Giving time and consideration to picking the right tenants early on can avoid challenges and mishaps.
Here are the 7 key steps to thoroughly screen potential tenants:
Pre-screen potential tenants:
The screening process can begin even before tenants fill out an application. By asking a few simple questions and mentioning background checks or pet policies, you can gain valuable insights. Assessing their responses can help identify any red flags early on and save time by weeding out unsuitable candidates.
Additionally, in today's digital age, it is wise to review the social media presence of potential applicants, if their accounts are public. This can provide a glimpse into their lifestyle and how they might treat a home.
Proof of income and ID:
The rental application serves as a profiling tool for prospective tenants. Their answers can provide valuable insights. Most landlords prefer tenants with stable employment to ensure consistent rent payments.
Moreover, the ability to pay rent consistently and maintain the property's condition is crucial. Requesting relevant proof of income, such as recent pay slips or bank statements, helps verify these criteria and ensures applicants can afford the property.
Assess their character at the inspection:
In most cases, your property manager will show prospective tenants around the property. This presents an opportunity to have an informal chat and get a sense of their character. Through conversation, your property manager may learn about their job, frequency of moving, and any past rental issues.
Observing their behaviour during the inspection can also provide insights into how they may treat the property. If you desire additional certainty, consider joining the tour yourself.
The tenant interview remains a crucial part of the screening process. Your property manager should ask the right questions to gather the necessary information.
For example, some questions I often ask are what is the reason for their move? this can reveal valuable insights. A suitable tenant should have no trouble answering such a simple question. Additionally, asking about their current employment status or alternative income sources can provide further clarity.
The interview also provides an opportunity for tenants to address any concerns or questions raised by the landlord. For instance, if a tenant fails to provide recent paychecks, they can explain extenuating circumstances that led to the omission.
Conducting reference checks is a fundamental step in the screening process. Most tenant applications require at least three references, including personal referees, past employers, and previous landlords.
Your property manager should verify the accuracy of provided references and try to obtain character profiling information from them. Contacting the previous rental property manager(s) is essential to gather insights on the tenant's payment history, property maintenance, and bond refunds.
Employer references can verify income and provide an overview of the tenant's character, reliability, and responsibility. These checks offer valuable indications of the tenant's ability to meet rental obligations.
National tenancy database check:
If the applicant satisfies all previous steps, your property manager will conduct a final screening check on the National Tenancy Database.
This comprehensive report, although not free, provides information about the tenant's rental history, potential blacklisting, bankruptcy records, and court judgments, and validates the applicant's identity.
Checking the database before offering tenancy can prevent future difficulties such as non-payment of rent or property damage. It also allows you to make informed decisions about tenants with criminal convictions or bankruptcy in their past.
You have the final say:
Finally, when all is said and done we will present you with a shortlist of fully screened potential tenants and may offer recommendations.
If you have a property and are looking for a reputable property management company with comprehensible systems in place get in touch today.