Landlords and property managers must rely on objective data from background checks for tenant screening, avoiding subjective criteria to prevent legal issues, and today, screening a tenant is easier than ever. Technological advancements streamline the process, providing extensive data, efficiency, and compliance. Simplifying tenant screening involves clear criteria, screening services, consistent processes, and effective communication. Choosing the right software eases screening, minimizes risks, and optimizes productivity, leaving you more time to focus on other aspects of managing your rental properties.
When it comes to finding good tenants, at a base level, you want someone who can (and will) pay their rent every month. But what other criteria are important for turning a good profit on your rental property?
Objectively speaking, how about someone who maintains the property? How about someone who follows the property rules, like adhering to the pet policy and putting their trash in the right receptacle? Those all sound good, right?
I also think it’s important to find a tenant who will uphold the safety and security of the property and surrounding neighborhood. By that, I mean someone who is not violent and who won’t damage the property.
When it comes to these objective behaviors of good tenants, landlords and property managers can make screening decisions based on facts discovered in an applicant’s background check.
For instance:
- Does the applicant have income that meets your property’s income requirements? As verified by a paystub, bank statement or income verification report.
- Does the applicant have a history of paying bills on time? As seen on a credit report.
- Does the applicant have a debt-to-income ratio that can be maintained given the monthly rent amount? This can also be verified on a credit report and supported with verifiable income.
- Has the applicant been evicted before? Calling references and checking an eviction history report can help you verify this. (But be careful on this one, as some states are limiting the use of eviction history as a reason for declining a rental applicant.)
Landlords can enter a gray area (or even completely black area) of tenant screening if they want to make a screening decision on subjective criteria or personal preferences that are not related to legal tenant screening practices.
While I always like working with “nice people” that is entirely my opinion, and I cannot approve a rental applicant based on my personal assessment of their personality. Subjective tenant screening decisions are considered illegal because they might violate Fair Housing laws, which prohibit housing decisions based on a protected class like race, religion, national origin, color, familial status, sex, and disability.,
So, let’s take a look at ways to easily screen a tenant that are objective, legal, and appropriate for landlords and property managers. As you consider your options, you’ll find it valuable to develop a tenant screening process that is also quick and convenient, especially since you are eliminating your personal opinion from making a housing decision. You can rely on reports and facts, and avoid any potential judgment or disparate impact with the right system that always adheres to Fair Housing laws..
The Tenant Screening Process
Historically, tenant screening has always been a part of the application process. In the early days, landlords would spend hours vetting potential tenants by conducting extensive in-person interviews, checking references, and meticulously reviewing paper documents such as pay stubs, bank statements, rental history documents, and letters of recommendation.
While I say historically, it often surprises me the number of landlords that still deep dive into their rental applicant’s background during the tenant screening process. I see it most often with new landlords or individuals who own only one or two properties.
I think it’s important to be diligent with tenant screening, as this can lead to the most lucrative profit on your rental property, but there are ways to optimize the process so you can approve an applicant quickly and efficiently.
With the right tools, landlords can streamline the process and rest assured that they’re making the best decisions when it comes to selecting the most ideal tenants for their property.
Technological Advancements in Screening
Technological advancements in tenant screening have introduced a paradigm shift in the way landlords and property managers select potential tenants. As these technologies continue to evolve, they are poised to further refine and optimize the screening process, ultimately benefiting both landlords and tenants.
1. Access to Extensive Data
Online platforms and specialized software have facilitated access to a vast array of applicant information. Landlords can now retrieve detailed credit reports, which include credit scores, outstanding debts, payment histories, and insights into an applicant’s financial behavior, making it easy to streamline the screening process.
2. Comprehensive Reports
Besides credit histories, screening platforms give you access to comprehensive reports that often include eviction histories, criminal records, and sometimes even employment verification details. This consolidation of data makes the evaluation process easier and also provides a holistic view of an applicant’s background in one accessible document.
3. Efficiency and Time-Saving
By digitizing the screening process, technological tools have significantly increased efficiency and saved time for landlords. Rather than manually gathering and collating information from disparate sources, these platforms automate the process, generating reports swiftly and accurately.
4. Improved Accuracy and Reliability
Digital tools and online platforms often source data from reliable databases and credit bureaus, enhancing the accuracy and reliability of the information provided. As a result, this minimizes the chances of errors and ensures that landlords base their decisions on credible and up-to-date information.
5. Customization and Integration
Landlords can often customize these platforms to align with their specific screening criteria. They can set parameters and thresholds for credit scores, rental history, or criminal records, enabling tailored reports that suit their preferences and requirements.
6. Streamlined Communication
In addition, these platforms often feature integrated messaging systems that make communication between landlords and applicants more convenient and seamless. They enable landlords to interact with applicants, share necessary documents, clarify queries, and schedule appointments, all within a centralized platform. By offering a consolidated channel for communication, tenant screening platforms enhance efficiency, reduce the likelihood of missed messages, and provide a transparent and organized way to manage interactions throughout the application process.
7. Compliance with Legal Regulations
Advanced screening platforms also incorporate features that ensure compliance with federal, state, and local housing laws. They are intentionally designed to flag potential areas of concern regarding discrimination or illegal screening practices, thereby assisting landlords in adhering to legal requirements.
8. Enhanced Security and Privacy
Top-tier screening platforms prioritize data security and privacy, employing encryption and other security measures to safeguard sensitive applicant information. Landlords can trust that the data they collect and store meets high security standards.
9. Remote Access and Mobility
The digital nature of these screening tools allows landlords to conduct the screening process remotely which is particularly beneficial for property managers or landlords overseeing multiple properties or those located in different geographic areas.
Challenges in Tenant Screening
Despite technological advancements, challenges persist in tenant screening. Here’s some you should be aware of:
Misleading Information
Applicants can intentionally provide inaccurate or misleading details, aiming to hide negative aspects of their rental history or financial standing, which poses a challenge in assessing their true suitability as tenants.
Complex Interpretation
Interpreting the gathered information demands a nuanced approach. Landlords need to exercise judgment and discretion while evaluating applicants. Not all negative aspects found in an applicant’s history might disqualify them outright, as some situations might require additional context or clarification for fair evaluation. Understanding that each case may have unique circumstances impacting their history is essential for fair and comprehensive assessment.
Legal Restrictions
Compliance with fair housing laws presents challenges. Some jurisdictions restrict the use of certain information, such as criminal history, in tenant screening, requiring landlords to navigate these legal limitations.
4 Ways To Simplify Tenant Screening
1. Clear Screening Criteria
Establishing transparent criteria for tenant selection, including minimum credit scores, income requirements, and a clean rental history, streamlines the evaluation process. This is where you want to be diligent in establishing your objective screening criteria and apply the criteria to every single applicant equally.
2. Use of Screening Services
Leveraging reputable tenant screening services automates and consolidates the process, providing comprehensive reports to help you with decision-making. Ask your tenant screening company what they have done to adhere to tenant screening requirements. For instance, using a company that specializes in tenant screening for criminal backgrounds should limit the report criminal background to info that can only be used for tenant screening purposes.
3. Consistent Application Process
Implementing a standardized application process for all applicants ensures fairness and compliance with legal requirements. You can consider a pre-screening criteria to easily eliminate unqualified applicants. Again remember to always be objective and apply the pre-screening criteria fairly to every applicant.
4. Communication and Documentation
Clear communication with applicants and meticulous documentation of the screening process are crucial for transparency and legal protection. This ensures both parties understand the process and protects the landlord in case of legal disputes.
How Choosing the Right Software Makes Tenant Screening Easy
Minimizes Risk Through Income Verification Screening
When an applicant submits documents, especially ones with sensitive information, tenant screening software can help verify them. By using software with automated tools that verify bank information and active income sources, landlords can reduce the risk of misleading, outdated, or forged documentation.
Streamlines Data Management and Eliminates Manual Tasks
Tenant screening solutions help landlords seamlessly capture all tenant records, so that they don’t waste time with manual data entry or gathering paperwork.
Keeps Applicant Information Secure
Using tenant screening solutions gives landlords peace of mind, knowing that tenant information is securely stored and their data remains protected. It also increases trust among applicants while minimizing the likelihood of human error or data breaches.
Optimizes Productivity
Instead of chasing down missing application information, tenant screening software enables landlords to schedule reminders and automate follow-ups with applicants, as well as other tasks to help free up time for bigger responsibilities.
Efficient Tenant Screening Made Simple with Rentec Direct
With services like Rentec Direct, landlords gain access to comprehensive applicant screening tools that include credit reports, criminal background checks, and eviction histories. Its user-friendly interface allows for seamless navigation, enabling landlords to customize screening criteria, set parameters, and generate detailed reports.
In addition, prioritizing integrations with trusted data sources ensures the accuracy and reliability of the information provided, minimizing errors and streamlining decision-making. The emphasis on compliance with legal regulations, robust security measures, and its ability to facilitate remote access make it an invaluable tool for landlords seeking a hassle-free and legally compliant tenant screening experience.
