Of everything you do in the process of filling your properties, tenant screening is arguably the most important part.
Properly screening tenants will ensure that you get responsible people in your units: people who are likely to care for your property, follow the rules outlined in your lease, and (most importantly) pay their rent on time. Failing to properly screen tenants can lead to a number of negative outcomes that will cost you time, money, and energy — and could potentially put your property at risk.
That’s why it’s in your (and your property’s) best interest to leave tenant screening to the professionals. Allowing an experienced property manager to handle the tenant-screening process will ensure that each potential tenant is properly vetted and the best tenants are the ones who end up with the rental agreement.
But what makes an ideal tenant? What could happen if you don’t get the right tenants into your property? And why is it in your best interest to allow your property manager to screen tenants?
The Ideal Tenant
Properly screening potential tenants is the best way to ensure that the people who end up renting your units fit the bill of an ideal tenant.
But what exactly is an ideal tenant?
An ideal tenant is a person who will:
- Pay the rent on time every month
- Treat your property with respect
- Adhere to the lease agreement
- Cause no damage to your property (other than normal wear and tear)
- Cause no issues with other tenants
An ideal tenant will be reliable and cause minimal issues throughout the rental process. The only way to identify them is to properly screen them.
An ideal tenant will have:
- A good credit score (which indicates a history of paying bills on time)
- No criminal record
- A stable employment history
- Positive references from past landlords
Renting to an ideal candidate will make managing your rental property significantly easier.
What’s at Risk
On the flip side, renting to a less than ideal candidate puts your property at risk. Renting to undesirable tenants can lead to property damage, loss of income, issues with other tenants, … The potential costs, both financially and in terms of time and energy, can be huge.
An unideal tenant is someone who will:
- Pay the rent late (or not at all)
- Cause problems with other tenants
- Ignore the lease agreement and do as they please
- Damage your property
But luckily, just as proper tenant screening helps to identify ideal candidates, it can also help identify the people you DON’T want to rent to.
During the tenant-screening process, red flags will emerge that will let you know a person is not an ideal renter. Some of those flags include:
- A criminal history (particularly with violent crimes, like assault or burglary)
- A poor credit score
- Prior evictions
- An erratic work history, including long periods of unemployment
As a rule, past behavior tends to be a predictor of future behavior. So if a potential tenant has a history of stealing, not paying their rent on time, violent behavior, or not being able to hold a job, chances are that behavior will continue in the future. And the last thing you want is for that behavior to continue on your property.
What About Friends and Family?
Now, obviously, most tenants that go through the screening process will be strangers; the screening process helps to identify whether they’re an ideal candidate for your property.
But what about renting to people you know?
If you have a friend or family member who’s in the market for a rental and you feel this person is responsible, reliable, and will take good care of your property, you might want to consider renting to them. As long as you set proper boundaries and your friend or family member understands that the rental agreement is a business arrangement, having someone you know and trust in one of your properties can be a great situation.
However, mixing family or friends and business doesn’t always work. What happens if that friend or family member loses their job? What happens if they cause an issue with another tenant or damage your property? The pre-existing relationship can add an extra layer of complexity to dealing with potential tenant issues and can make it more challenging for you to take action if you need to.
You also risk putting a strain on the relationship if anything with your rental agreement goes south. Before you decide to rent to a friend or family member, it’s important to a) properly screen them to ensure they’re an ideal tenant, b) set proper boundaries and expectations about the rental agreement, and c) be prepared for potential issues in the relationship should anything go wrong with the rental situation.
Bottom line: if you want to rent to friends and family, proceed with caution.
Why Your Property Manager Should Handle the Tenant-Screening Process
Whether you’re renting to strangers or to people you know, passing off the tenant-screening process to an experienced and qualified property manager is the best bet for you and your investment.
Property managers are the ideal choice for tenant screening for a number of reasons, including:
Property managers know how to properly screen tenants. Their years of experience in tenant screening have taught them what to look for, which tools to use, and which criteria are the most important when choosing tenants. This experience will ensure that you get the best tenants in the door of your properties and protect your investment.
One of the major draws of having a property manager handle your tenant screening is their ability to stay objective.
They’re not swayed by sad stories and don’t let their emotions get the best of them.
No Personal Relationships
If you do decide to go the friends-and-family route, having a property manager handle the screening process is ideal. Because they don’t have a personal relationship with your friend or family member, they’ll screen them just like any other tenant. That also gets you off the hook if your friend or family member doesn’t pass the screening process; since you didn’t manage the process yourself, they won’t be upset with you if it doesn’t work out.
Their Tenants Will Make You More Money
Because property managers are so skilled at providing tenant-screening services, they’ll get the best, most reliable tenants for each of your properties: the kind of tenants that pay their rent on time. Having reliable tenants in your properties — tenants who don’t pay their rent late or not at all — means more money for you in the long run.
Properly screening tenants should be a non-negotiable. Passing the responsibility off to a qualified property manager will ensure only the best tenants make it through the screening process.