Finding the right tenants is crucial for a successful landlord-tenant relationship. In this blog post, we’ll conduct a tenant screening masterclass, guiding landlords through the essential steps to identify reliable and responsible tenants.
1. Establish Clear Screening Criteria:
Create a defined list of documents you require from all tenants, and hold firm to it unless extenuating circumstances exist that would make it impossible for the applicant to provide the information. An example would include a self-employed individual being asked for pay stubs.
In unique circumstances, getting creative is encouraged. For example, self-employed individuals may be able to provide bank statements, invoices or the previous year’s Notice of Assessment.
Here’s our go-to list of required documents:
- Two or more consecutive pay stubs from the most recent pay periods
- Job letter
- Credit report
- Government-issued ID
- Completed rental application
2. Request Comprehensive Tenant Applications:
Require prospective tenants to complete comprehensive applications. This should include personal and financial information, rental history, and references. Thorough applications provide valuable insights into a tenant’s background.
3. Run Background and Credit Checks:
While requiring a tenant to provide a credit report is essential, we always recommend the Landlord purchase their credit report for the applicant, too. The average person may not be able to detect a fraudulent credit report, and it happens more often than you’d think. Another reason to pull a report, is because sometimes a tenant will conveniently choose the credit report from the reporting company that provides a more attractive profile. Not all trades and credit history may have been reported to all credit reporting companies.
4. Verify Rental History and References:
Contact previous landlords and personal references provided by the tenant. These conversations offer valuable perspectives on the tenant’s behaviour, reliability, and suitability for your property. You’d be amazed at how often professional tenants hire individuals to act as a previous landlord or employer.
By asking questions that only a person in that position would know, such as “how many bedrooms did the rental property have?” “How much were they paying in rent?” or “How long has the company employed Mr. Tenant?” may reveal a fraudster.
5. Perform a Face-to-Face Interview:
Always finish off with an in-person or virtual meeting. It’s easy to lie on documents; not everyone is cut out to do it in real-time. Sometimes, these meetings will solidify your confidence in the tenant, or maybe there’s a personality conflict that you’re uncomfortable with handling as a Landlord.
Tenant screening is a critical aspect of property management. By establishing clear criteria, requesting comprehensive applications, running background checks, and verifying rental history, landlords can make informed decisions that contribute to a positive rental experience. Stay tuned for more expert insights on successful property management.
