A good tenant is worth their weight in gold. A solid tenant pre-screening process can greatly increase the likelihood that a landlord will end up with good renters. It’s a crucial part of a successful property management business.

Every tenant pre-screening process must comply with the local laws. The Fair Housing Act prohibits discrimination on the grounds of race, color, national origin, religion, sex, familial status, and disability. Before you begin, it is wise to check the laws specific to your area.

An important aspect of a fair and equitable tenant pre-screening process is to ask the same questions of every applicant. Repetition lends itself well to automation. With the right software your tenant pre-screening can be streamlined to save you time and money.

Every tenant pre-screening begins with the application. The next step is to conduct history and background checks on prospective tenants. With these pre-screening elements out of the way, those individuals that make the cut can move on to the interview.

The Application

It’s a good idea to make the application process easy and convenient for potential tenants by utilizing online applications. With this tool tenants can easily enter their details and quickly submit completed applications with no hassle. Online applications are received instantly which allows for faster processing.

The right software will make it easy to build applications. It’s important to match your online application with the paper version to ensure you are not inadvertently discriminating against certain groups or missing out on valuable information. Look for a customizable form creator when choosing software to meet your tenant pre-screening needs.

Think about the big picture when browsing for software to meet your needs. Digital forms are versatile and smart programming can leverage this. The best software will transfer all of the data entered on the application into your system eliminating the need for data entry and ultimately reducing errors.

An integrated ability to collect the application fee online streamlines the process for both prospective tenants and landlords. Good software should allow you to set your application fee and let people easily make online payments. With convenient payments you can quickly move on to the next step in the pre-screening process.

History and Background Checks

Once a potential tenant completes the application process and it all looks good, it’s time to move on to the next step in the tenant pre-screening process. It’s important to verify the information prospective tenants provide by running certain checks. The five areas of an applicant’s history and background that a landlord should screen are income, employment, criminal background, credit, and previous eviction and residence history.

Verifying income and employment allows a landlord to determine if an applicant can afford the rent now and if their ability to pay is likely to change in the future. A general rule of thumb is to keep rent at around 30% of income, although depending on the area this might vary. Contact the applicant’s employer to verify that the information they provided is accurate and try to get an idea if the employer feels that your potential tenant is a valuable employee.

It is often wise to check an applicant’s criminal history provided there are no legal restrictions for a landlord to do so. You will need to notify your prospective tenant that you will be conducting a criminal background check and obtain their permission before you proceed. Check state and federal criminal records and make note of any criminal history.

A credit report is one of the most valuable tools in the tenant pre-screening process. It can tell a landlord if an applicant has a tendency to pay their bills on time or is likely to fall behind. A credit report can also show you how much debt a prospective tenant has. You should consider the amount of debt compared to income.

Probably the best indicator of what kind of tenant an applicant will be can be determined by what kind of tenant they were in the past. A prospective tenant with a prior eviction may not be the safest choice, especially if the eviction was recent. Speak to previous landlords to find out if an applicant paid their rent on time or if there were any problems. Make sure you check back with several previous landlords as a current landlord might give you a favorable review just to rid themselves of a bad tenant.

Good software can help you streamline your tenant pre-screening process with integration and automation. Save time and boost productivity by automatically pulling background checks and reports on potential tenants. The right software should link directly to a top credit reporting agency such as TransUnion and allow you to view results without having to switch applications.

The Interview

Once you have all your data and reports, you can proceed to meeting your applicant face to face. The interview is the time to verify all of your findings. You wouldn’t want to miss out on a great tenant due to a simple error or miscommunication.

The tenant interview is also a good time to get more information and proper context for your findings. If you found something concerning on the criminal background check or prior evictions you might want to ask for the details of those events. An applicant with a great job, good credit, and an excellent rapport with prior landlords shouldn’t be penalized for a mistake they made in the distant past.

Making Your Decision

When looking at all the information you obtained from your tenant pre-screening process, look at the big picture. It’s not necessary to search for the perfect applicant without a single flaw. Look for red flags and avoid applicants that don’t check any of the boxes, but don’t disqualify people for inconsequential issues. Nobody is perfect and you might miss out on a great fit if you fixate on minor details.

The right software can be an indispensable tool in the tenant pre-screening process. It can help you be consistent in the questions you ask and the quality of information you obtain. A good program can help you automate and integrate the data you collect to help you avoid potentially bad tenants without missing out on the good ones.