Careful Tenant Screening
by John Nuzzolese
From the time of first contact with the prospective tenant to the time you sign a lease with him or her, you are still in the tenant screening process. Keeping in mind The LPA article, How to Screen and Qualify Tenants in 5 Easy Steps, it is very important to decide beforehand that you WILL NOT accept anyone who does not meet ALL of your screening requirements.
Often, landlords overlook certain "red flags" that indicate the prospect is NOT qualified to rent from you. It could be a sign of the tenant's financial stability, personal habits, respect or attitude toward the landlord. The important thing I'm saying here is, do your homework.
What are your screening requirements? It's important not to forget some of the key ingredients when screening a tenant.
- Rental Application
A fully completed and signed LPA Rental Application.
- Identification.
Be sure you get a copy of the applicant's drivers license or other valid picture ID. Is it possible that a deadbeat would use someone else's identity and credit to get accepted as your tenant? You bet. It happened to me!
- A Non-Refundable Deposit.
A serious applicant will have no problem leaving a substantial non-refundable earnest money deposit with you to secure the rental. If you reject the applicant, it is refunded, but they lose the deposit money if they change their mind or don't rent from you for some reason.
- A Non-Refundable Screening Fee
It came to my attention that a local management company was charging an "Application Fee" or "Screening Fee" when ever anyone applied for one of their rentals. What a great idea! Since then I've been doing that too, and I learned there is a double benefit to it:
- No more paying for credit reports!
In the past, I paid for credit reports on rental applicants out of my own pocket. When screening a large number of applicants for a number of popular renatls it would get quite expensive, especially if there were a lot of rejections.
- Bad tenants disqualify themselves faster!
They may be willing to submit an application and waste your time and money checking them out if it doesn't cost them anything. They'll take a chance. "Maybe the landlord's to cheap to do a credit report", they may think. But when a small screening fee is required, suddenly they fall out of love with your rental. A screening fee rarely stops a good tenant from renting a quality rental.
- Verification of the references on the Rental Application.
Be sure to take the time to make calls to verify the information on the application is true. When verifying the landlord reference, I recommend the
Landlord Reference Qualifier.
Occasionally, negotiations over price, security deposit and other matters may become heated with a prospect. It was always my first impulse to "can" the deal if I don't like the tenant's attitude. You may feel like killing it at that point, but don't...yet. Step back for a moment and think about whether the tenant has a valid point or position. Is his attitude a result of a wounded ego? I found that many deals can be worked out with certain tenants that seem to have an attitude or seem arguementative. Sometimes, they turn out to be the best tenants. They just need to know they are not being taken advantage of and they'll begin to respect you. So, it's up to you to be a diplomat and a psychologist to see if it's worth making a deal with the prospect.
Remember, "95% of tenant problems can be eliminated in the screening process."
Copyright © 2006 The Landlord Protection Agency, Inc. All Rights Reserved.
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