It can be challenging to find high-quality tenants, but with the help of tenant screening and a tenant scoring system, you can start attracting the best applicants.
Tenant screening systems can tell you which candidates will be good tenants, and which are risky. To get a complete picture of each applicant, you’ll want to check their criminal history, credit score, and previous evictions, plus verify their income and talk to their references.
It may sound like it takes a lot of time and effort to get all this information, but property management software makes it easy.
Here are the top five benefits of a tenant screening and scoring system.
Avoid Legal Trouble
The Fair Housing Act and local housing laws mandate that you use the same screening process for everyone. Not having a solid tenant screening process may force you to adopt a “first-come, first-serve” model to avoid running afoul of the law.
Clearly, this is not ideal. You don’t want to fill your units with just anyone. Tenant screening and scoring gives you the ability to fill your units with tenants that meet your standards, as set forth in your tenant scoring system. If challenged, you can prove you weren’t discriminatory by showing exactly why you denied their application.
Be aware of state and local laws, however. Some states have placed restrictions on using an applicant’s criminal history, rental history, and credit score to deny them housing. Talk to a real estate attorney in your area for more information.
Systematically Organize Applicants
Every landlord wants more high-quality applicants for their unoccupied units. However, the more applicants you receive, the more difficult it is to identify the best applicant.
Using tenant screening and a scoring system, you can see which applicants would make great tenants and organize them based on their resident scores. This score is a cumulative grade based on all the factors previously mentioned—criminal history, credit check, and so forth. Therefore, the applicant with the best score will most likely be the best tenant.
There is nothing worse than finding an applicant, getting the lease signed, and having them move in, only to find out that they are a destructive tenant who doesn’t pay their rent.
Unfortunately, landlords are often pushed to the point where legal action is required to force the tenant out of the unit. And the time and legal costs needed to evict a tenant add up quickly.
With tenant screening, you can minimize the risk by seeing their financial and eviction history and filtering out all the bad candidates. This has the potential to save you thousands of dollars in court costs and lawyer fees, not to mention all the hours of your time that the eviction process eats up.
Dodge Low-Quality Tenants
Evictions aside, there are several reasons to weed out low-quality applicants, including late rent payments, property destruction, broken leases, and so on. Renting to tenants with a history of these problems will open you up to a variety of issues that consume your time and money.
A scoring system and tenant screening can help you dodge problematic tenants. By looking at their previous rental history and the other factors previously mentioned, you can get a better idea of the type of tenant they will be.
Increase Lease Duration
Using tenant screening and a scoring system, you can find the best tenants currently looking for rentals in your area. One of the most overlooked qualities of a great tenant is a longer lease duration.
Yes, good tenants pay on time and cause less property damage, but they also typically renew leases. Not only do you get to keep a good tenant, but you also eliminate all the downtime needed to clean the unit and find a new renter.
These are the top five benefits you can get from tenant screening questions and adopting a tenant scoring system. You can probably think of a few other advantages of finding great renters, including keeping the rest of your tenants happy by giving them good neighbors.
The main takeaway is that when you screen your applicants, you make sure your new tenant meets your standards. You may also encourage them to get renters insurance to avoid litigation in case the possession of your tenant gets damaged or stolen. If your rental unit is located in Arkansas, G&G Independent insurance can help your tenant find the cheapest renters insurance in Arkansas. And that means you can spend less time worrying and more time relaxing.