The Ultimate Guide On Choosing Tenant Screening Services For Your Rental Business

The Ultimate Guide On Choosing Tenant Screening Services For Your Rental Business

By Dana Hughes | Business Contributor on February 28, 2019
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couple buying real estate fraud business

Every landlord’s priority is to protect their business and property. Screening potential tenants prior entering into a lease agreement is the best way to secure business assets. Rental business owners have two options on screening tenants, either do-it-yourself screening process or partner with a company expert that provide tenant screening services.

There are a lot of tenant screening services and finding out the best fit for your rental business is a bit challenging. In this article, we will list down some tips on choosing the best tenant screening service. But before that, let’s answer this simple question.

What is a tenant screening service?

Tenant screening services are usually provided by property managers or consumer reporting agencies to conduct thorough investigation on potential tenants. The purpose is to assess tenant’s likelihood to follow the lease contract agreement and will take care of the rental property. The screening package usually includes full FICO score, credit reports and nationwide criminal background checks. Included in the credit reports are credit information, payment history, bankruptcies, judgement and other red flags. While criminal background checks include nationwide search, sex offender data, fraud alerts, identity verification and DEA, FBI, ODAC databases that includes most wanted lists. Some agencies include detailed and comprehensive eviction history report as an add-on option.

Tips on how to choose tenant screening services

Let’s admit, tenant screening services is not built the same way. Rental business owners need careful assessment before partnering to any companies in order to get high quality service that will result to finding a good tenant. Here’s some tips to consider when choosing the best tenant screening service company:

  • Multiple databases on criminal background check.Check if the tenant screening company provides nationwide criminal background check report from multiple database such as DEA, FBI and ODAC. Make sure that sources have at least one governmental database.
  • FICO Score Credit Reports.Make sure that screening package includes full FICO score for credit reports. This is the best way to assess the potential tenant’s credit history.
  • Eviction History Report. Some tenant screening companies offer full credit history report and criminal report but does not have eviction history report. Eviction report will tell you if prospective tenant has prior evictions which is an indicator of a bad tenant.
  • Customer Service.Choose the one that have high level customer support. Not being able to get your personal questions answered is quite disappointing.
  • Average market price for a complete tenant screening package starts at $30. Consider this as your base price when looking for tenant screening services.

Partner with a tenant screening service companies is highly recommended. Here’s why:

  • Professional screening for tenants.They are trained to conduct the most effective screening method. With their resources and experience, you’ll end up finding good tenants who will rent your property longer, pay rent on time and take good care of your property.
  • Fewer worries on legal issues.Some business owners are not aware of any law that applies between the lessee and the lessor. Tenant screening service provider will take care of any legalities and make sure that any potential lawsuits will be addressed.
  • Protection from rental scams.Scam is everywhere, and rental business is no exception. Rental scammers will target inexperienced property owners. They will pretend as rental applicant only to find way to sue landlords for legal reasons such as discrimination. With their standard application process reviewed and confirmed by lawyers, tenant screening service provider will ensure the safety of landlords.

How to screen potential tenants?

Now that you know what tenant screening service means, things to consider in hiring the best service and some benefits – let’s get to know how tenant screening process is done.

  • Request an application.Have the potential tenant complete the application form. It’s important that the form covers all areas that landlords need to know about a tenant such financial status, employment and personal information. Don’t forget to write down terms of agreement and have it signed by the tenant.
  • Check current and previous credit status.The cost of running credit check will be shouldered by either the tenant or the landlord depending on any applicable law or agreement between tenant and landlord. Always consider checking credit history and current debt when reviewing credit report.
  • Run a background check. It’s important to check the potential tenant’s past such as criminal and eviction backgrounds. Although, it’s not easy to run a background check – you need to ask it from an authorized agency by supplying the tenant’s personal information like an identification number. The best way to get this done is through partnering with a reliable tenant screening service company.
  • Interview the potential tenant. A quick interview will also help landlords assess potential tenants’ personality and lifestyle. Ask questions like work shift, hobbies in life, find out if he smokes and if he have plans to look for a roommate in the future.
  • Check tenant’s employment status.You may want to ask for his employment and verify if he’s telling the truth. This is one way of checking if he has stable job and capable of paying monthly rent.
  • Contact the former landlord.If the potential tenant has previous landlord, you may also want to communicate with them to check and get feedback. Ask questions about late payments, any outstanding debt and issues or reasons why the tenant left.
  • Treat all tenants equally during the screening process. Most importantly, landlords must not discriminate any prospective tenants. If you not familiar with the Federal Fair Housing Act, then you should study it now. This law is designed to prevent any discrimination against classes of people in any housing related matter. You cannot discriminate based on race, color, nationality, religion, sex, familiar status and disability.

As rental business owners, you can do all the screening process stated above to get a good tenant. But you don’t need to turn into a detective and based your decision on credit history or criminal background reports. Don’t ignore your guts – use your instinct and get a feel about the tenant.

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