As a landlord, you’re in the business of renting out rooms in your property and earning an income out of it. So, your aim is to make enough money so that you can run a profitable business. And that can only happen if your rental properties are filled with tenants round the year. Of course, no one can guarantee whether your tenant(s) will stay throughout the length of their lease.
Therefore, should they choose to move out, you’re forced to go through the entire process of posting your rooms for rent in Cirtru and looking for people to fill the vacancies. To save more time, effort, and money, you might be tempted to skip the tenant screening process and choose someone you feel is suitable.
In your hurry to find someone, your instincts may result in an eventual eviction, and you may end up spending more time and money in legal hassles! Therefore, to get a tenant who’s trustworthy and makes timely rental payments, it’s crucial to have a foolproof tenant screening process. We’ve compiled a list of seven reasons that should give you an idea of the significance of the entire process.
To determine your tenant’s latest financial status
According to a survey conducted by SmartMove, 79 percent of landlords revealed that they don’t care much about the details of the credit report; just the credit score is enough for them to determine the eligibility of a potential tenant.
At the same time, landlords must review the credit report of a tenant in its entirety. Why? Because critical information, such as their pending debts, credit application history, and so on, can be found here. These details give you an idea about their current financial position. Additionally, the credit report should share the credit history of your potential tenant, if any.
If they’re young and have just started out in life, they have yet to build a credit history. In such a situation,it’s sensible to ask them to get a cosigner who takes up the responsibility of making the rental payments if they can’t pay up for whatever reason, you can track their payment using the Stessa software.
In a word, a potential tenant’s financial situation helps you make an informed decision about whether they can be considered worthy of being shortlisted or not.
To find out whether your tenant can pay timely
Among the issues that landlords have with tenants, timely rental payments comprise the top one. Eighty-four percent of landlords cite this as their main problem, according to a TransUnion survey. The credit report provides a wealth of information about a tenant’s ability to pay on time. The report shares payment history details and tenant-related collections, which is when a collection agency is assigned the responsibility of collecting pending rents.
In addition to these, if a previous landlord files a lawsuit for nonpayment of rent against a tenant you’re considering, and the verdict requires them to pay the due amount, this would feature in the credit report. Would you want to have someone with a shaky payment history on your property? Of course not! Because it indicates that history will repeat itself, so there’s no reason why you should take on this kind of headache.
To know more about your tenant’s nature
Do you think only a credit report and a criminal background check can tell you anything about a person’s nature or personality? Not really, no. A background check is pretty comprehensive, so other details such as educational credentials, reference letters, and employment history can tell you more about the potential tenant.
If the grades, letters, and stable employment details tell you anything, the individual is credible and reliable. On the other hand, mounting debts, letters that reveal behavioral and payment issues, numerous job changes, and eviction details of a tenant tell you otherwise. Use them to your benefit.
To ensure your properties and other tenants are secure
One of your key responsibilities as a landlord is to ensure that your properties and other tenants are safe and secure. Thankfully, the tenant screening process includes a criminal background check, and its importance can’t be stressed enough. Be sure to review your applicant’s criminal history without being judgmental. Not all crimes fall under the ‘violent’ or ‘severe’ type.
According to stessa if your potential tenant had violated traffic rules or had committed minor wrongdoing several years ago, you can choose to let them pass. In your meeting with the tenant, check whether they’re willing to share need-to-know details with you of what happened openly or whether they’re trying to hide something. A conversation in person, coupled with your gut and the criminal history details, should help you decide whether they’re fit to live on your property.
To rent to trustworthy tenants
A lengthy and stringent screening process is a win-win for both landlords and tenants. Wondering how? Well, landlords get to shortlist only the best and most trustworthy tenants for their rental properties. As far as potential tenants are concerned, they realize that you mean business and don’t take things lightly.
So, those with bad intentions will automatically back out. What you’re left with are those who will respect you and your property and treat it well, besides ensuring that the rent’s paid timely. In the end, there’s a mutually cooperative and professional relationship you have with your tenants that keeps everyone happy.
To ensure a low turnover rate
Evading evictions is one of the primary reasons to have a proper tenant screening process. The eviction process takes up a great deal of your time and money. TransUnion reveals that the average expenses total to anywhere between $2500 to $3500 while the time involved might be three to four weeks or go beyond.
Moreover, the more evictions you have, the higher is your turnover rate, which is the exact opposite of what you need. A low turnover rate indicates that tenants are satisfied living on your properties, so your job is to ensure that they remain happy by staying connected with them and looking into their concerns. Last but not least, a low turnover rate attracts more prospective tenants in case of vacancies.
To be at peace
While you may think that your tenant screening process is impeccable, no process is perfect. But with a system in place, you’re at peace with yourself about having done the best that you could do to find a tenant who’s well-behaved, pays on time, and keeps the property neat and clean. As a landlord, you wish to get the most out of your rental property business with good, dependable tenants.
To get such tenants, invest as much time and effort as you need. Remember that skipping the screening process was, is, and will never be an option. Because doing so could mean you’re welcoming into your home, a hardened criminal, or someone with questionable credit history and no means to pay the rent. Yes, you’ll eventually have to throw them out, but it’s your reputation that’ll be at stake, impacting your business.