Even after the recent federal eviction moratorium, many U.S. renters still struggle to make their rent. One study found that renters are behind on their rent by $3,700 on average across the nation.
For landlords, this debt can be worrying—not only because it means lower income, but also because it could lead to the long-term frustration of the eviction process.
Of course, one key way to avoid this mess altogether is by avoiding common mistakes in tenant screening. Because the initial screening process gives you the opportunity to find a prospective tenant you can trust for the long term, it’s important to pull out all the stops in an effort to get it right. If you’re hoping to find a stable tenant with a solid financial background, here’s what to avoid during the screening process.
1. Failing to Screen Tenants At All
If you find yourself hurrying to secure a new renter, especially if your unit has been sitting vacant for a while, it may be tempting to skip the screening process altogether. Worse, you might try picking up a habit that certain property managers use: only screening tenants you’re skeptical of.
However, failing to screen tenants is one of the biggest mistakes you can make.
Screening your tenants allows you to make sure that each prospect has the means to pay rent for the long term. It also gives you a chance to screen each adult who will live on your property, allowing you to get a better idea of their income, criminal history, and more.
Avoiding this step might allow you to place a tenant sooner, but it’s often not worth the hassle of fighting for unpaid rent or going through a grueling eviction process. Take the time to screen each prospect and all co-applicants!
2. Starting the Screening Process Too Late
To avoid letting your property sit vacant for too long, it’s always a good idea to start the tenant screening process as soon as you have an interested prospect on the line.
It might feel tempting to start screening at a time when you feel more sure about a tenant, such as after a tour or an interview. However, delays can not only mean waiting to fill the property, but they can also frustrate your prospects, giving them time to secure a similar deal somewhere else.
3. Failing to Ask for the Right Documents
In addition to a tenant application, it’s important to ask for a few specific tenant screening documents. The right files can help verify the information your prospective tenant provides in their application.
To prove that your new tenant can cover the rent, ask for pay stubs, W-2 or W-4 forms, bank statements, or employment contracts. You can also ask for a statement from the employer to verify the terms of their employment. For more information on getting proof of income, look here: https://rentsafe.lease/tenant-proof-of-income/.
In addition, you’ll need to get a credit report to get a better sense of your prospective tenant’s past payment history. It’s also important to do background checks for tenants as well as any adults who will live on the property.
4. Skipping the Interview
If your prospective tenant looks great on paper, it might seem like an interview would just waste your time. After all, if they meet all of your criteria with flying colors, what could go wrong?
Interviewing potential tenants gives you an opportunity to make sure that all of the details you’ve seen on paper match what they tell you in person. After all, it’s often harder to lie face to face than it is by sending over a document.
A casual interview with some basic questions also gives you a chance to build rapport and check for a personality match. Both of these things can be helpful in the long run if your new tenant ends up on your property for years to come.
5. Not Checking References
It’s a good idea to ask for at least three references from each prospective tenant and co-applicant. Always be sure to ask for professional references and non-relatives, and don’t forget to ask for references from past landlords as well.
In addition, note that it’s not enough to simply ask. Rather than assuming that the presence of these references is a sign of good character, make sure to call each reference to verify the information your tenant provided.
Take any hints of lying or misinformation as a major red flag. Some tenants give out friends’ numbers as employment references or previous landlords, so if their answers don’t match your tenant’s application info, it may be a bad sign.
6. Ignoring Housing Laws
As a landlord, it’s your responsibility to comply with all federal and local housing laws. These laws protect tenants from discrimination based on factors like their gender, race, religion, or marital status.
It’s crucial to stay up to date on these laws, which may change periodically and which often differ from city to city. If you fail to comply with the regulations in your area, a prospective tenant may be able to hit you with a lawsuit for discrimination.
7. Not Using a Tenant Screening Service
Sure, it’s true that you can screen tenants on your own by collecting the right documents and paying for a few additional services and fees.
However, the process can be lengthy and frustrating, especially if you have multiple properties or are casting a wide net in your search for tenants. With a tenant screening service, you’ll have an agency on your side to take care of all of the steps above.
Avoid These Mistakes in Tenant Screening
Finding the perfect tenant takes a great deal of time and effort, and avoiding common mistakes in tenant screening can help. Knowing what documents to collect and what regulations to keep an eye on are crucial, as is talking to your prospect and their references as soon as possible. Make sure to do your homework by using the tips above before you select your next tenant!
Looking for more of the real estate insights you need to know? Be sure to take a look at our other content for additional tips and tricks.
