As a rental management professional in Colorado, tenant screening is one of the most productive steps to protecting your property investments.
It’s important to create solid processes of tenant pre-screening, tenant approval, and the rejection of applicants. These processes will help differentiate the “good” from the “bad”. Pinpointing responsible individuals that will pay on time and protect your property is one of the best skills to learn.
Tenant Screening – At a Glance
What is tenant screening? It is a process or group of processes that will allow you to delve into the background of a rental applicant’s past to discover that which they have engaged in, the behaviors exhibited at previous residences, and to discover exactly who the individual is that you are considering developing a professional relationship.
Screening is more than just an application process. The content contained on applications may be falsified or inaccurate. Rather, it is a method by which you research the information that your tenant has provided. In doing so, you will also be provided with a vast array of outside information which you can analyze to determine if the applicant will be an ideal tenant.
The Qualities and Characteristics of a Potentially “Good” Tenant
As a rental management professional in the State of Colorado, you have a huge advantage. Due to the demand for property within the state, a lot of research has been conducted to determine the qualities and characteristics of a potentially “good” tenant. Before delving any further into this topic, we feel it is especially important to note that there is no 100%, fool-proof way to identify the “best of the best” when it comes to tenants; however, the qualities and characteristics listed below have been identified by most rental management professionals in the industry:
- Job Stability
- Level of Cleanliness
- Aversion to Illegal Endeavors and Activities
- Ability to Afford Rent
- Willingness to Uphold Their Responsibilities
Minimal Requirements or Expectations
In rental management, your tenant selection screening process originates with deciding upon your minimal requirements or expectations. Not all in the rental industry will have the same requirements or expectations. You must develop your own list and ensure that these requirements or expectations are clearly stated on your advertisements, your application, and in your rental agreement.
The following outlines a few requirements that are commonly agreed upon by those in rental management:
- Income Must Be At Least Three Times More Than Your Monthly Rent Fee
- Potential Tenant Must Have a Clean Criminal Background
- Potential Tenant Should Have No Prior Evictions
- Tenant Must Have Four to Five References Including Previous Landlord, Professional Acquaintance, Personal Reference, and Familial Reference
The First Phone Call
Upon advertising your property, you are sure to receive a multitude of phone inquiries. First, you should listen for sounds of desperation and whether or not the potential tenant appears to have an actual interest in the property that is available. You should ask the inquirer what you may tell them concerning your rental.
The best questions will pertain to the location of the property, descriptions associated with the properties, and landlord expectations and/or rules. In this conversation, you must decide if the individual sounds responsible, has an interest in the area that they will live, and if they sound as if nothing matters about the property, that they just need a place to live.
In the first phone call, remind the potential tenant about the minimal income requirement/expectation that you have previously outlined. Additionally, you should outline the fact that you will be conducting a full background check. This first call will allow you to eliminate approximately 80% of all potential candidates and will let the rest know and understand that you only have a desire to allow upstanding citizens reside within/on your property.
In rental management, you must be aware of and follow all rules associated with Equal Housing laws. The classes that must not be discriminated against are those that follow:
- National Origin
- Familial-Based Status
As a rental management professional, you may not engage in the following acts during the tenant selection process based on the criteria outlined above:
- Refusal to Rent
- Negotiation Refusal
- Suddenly Make Rental Property Unavailable
- Deny the Rental Property
- Change the Terms, Conditions, And/or Privileges
- Change Property
- Untruthfully Deny Availability
- Deny Access to Memberships, Services, Privileges Granted to Others Per Property Terms
The Remaining 20%
By this point, you should have a remaining 20% of applicants in which you may sort through. As a rental management professional, you should use the minimum requirements and/or expectations, ensure no discrimination, and run your background checks. It is best to opt for both criminal and credit history.
You may also want to carefully review and interview all listed references. There are other tactics that you may utilize in order to grasp a complete picture of who you are dealing with. These include social network screenings, inspection of their current residence, employment verification, and interviews with personal and professional references.