Finding good tenants and avoiding the not-so-good ones is every landlord’s goal.
But how do you know what kind of tenant you’ll be renting to before you actually start renting to them?
The most effective way is to conduct a thorough tenant screening. This includes a tenant application, credit report, background checks such as criminal reports and eviction reports, and a list of references.
While this may seem like a lot of work to do before beginning a lease, a rigorous tenant screening can save you a lot of headaches and money down the road. And nowadays, property management software makes this process a whole lot easier by doing a lot of the legwork for you.
Here are five of the benefits of tenant screening:
- Avoid Bad Tenants
There are tenants who:
- Consistently do not pay on time
- Are disruptive to their neighbors
- Do not respect your property
These tenants are the kinds of tenants you want to avoid. While these tenants can sometimes be evicted, their actions often do not meet the severity to legally warrant an eviction. In this case, you are stuck with them until the end of their lease, which will cost you money and trouble.
If you screen tenants beforehand, you can distinguish which applicants will be problematic and avoid renting to them.
- Avoid Evictions
In the instances where an awful tenant can be evicted, it will be a costly and stressful process for you. Evictions can cost you anywhere between $3,500 and $10,000 in legal fees and lost rental income. Not to mention all the time and energy spent on the eviction process.
Tenant screening allows you to weed out applicants who are at risk of leading to an eviction. Background checks such as eviction reports can tell you about a tenant’s rental history and any previous evictions they might have had.
- Legally Deny Applicants
Without tenant screening, Fair Housing laws dictate that you are at the mercy of “first come, first serve.” This is very risky, as it gives you little control over the tenants you will be renting to.
By screening tenants, you are able to deny applicants who do not meet your standards. Requiring tenants to meet specific benchmarks makes it easy to justify your decision to reject an applicant.
- Reduce Tenant Turnaround
Having a constant cycle of tenants moving in and out of your property is costly. After a tenant leaves, you must ready the unit for new tenants—which means cleaning, painting, replacing carpet and appliances, and so on. Then, you have to start looking for tenants, showing the unit, doing background checks, and signing a new lease. All the while, you aren’t receiving rent money because there’s a vacancy.
Having tenants who stay longer and minimizing vacancies is more profitable. In order to find tenants who will sign longer leases and be likely to renew a lease, you must screen them ahead of time in the application process.
- Attract Good Tenants
And finally, the thing you’re actively searching for. If you’ve been a landlord for a while, you know how valuable a good tenant can be.
Good tenants pay their rent on time, don’t disturb their neighbors, and don’t require constant maintenance requests. You also won’t have to worry about eviction. You save so much time, money, and headache by renting to someone who is a high-quality tenant.
Making sure you are renting to a good tenant should be accomplished before you sign the lease. Effective tenant screening allows you to attract tenants who meet your standards. Tenant screening also allows you as the landlord to identify these good tenants and weed out the ones who don’t meet your standards.
Finding tenants that meet your standards can seem like a daunting task with many uncertainties. By conducting tenant screening, you can sift through the bad tenants and find the good ones ahead of time. Being proactive with tenant screening will make managing your properties much more pleasant in the long run.