Posted by Mitchell Vinnitsky

4 Signs Your Tenant Screening Process Needs an Overhaul

Screening potential tenants can help protect your investment and maximize your profitability. When you are able to weed out the bad apples, you’ll end up with better quality tenants who will not only care for your properties, but also be more likely to stay long-term. Lower turnover means fewer expenses for your business. So, how can you tell whether your tenant screening process is working as it should? Well, here are a few signs it’s not quite up to par and could use some improvement.


Payment Issues

One of the primary reasons for screening tenants is to confirm that they can afford to pay the rent, in full and on time, every month. If you’ve noticed your tenants paying late – or worse – not paying at all, it could trace back to poor screening.

To prevent this from occurring again with future tenants, conduct a thorough analysis of each applicant’s financial health. Run a comprehensive credit report and review it carefully. It’s also a good idea to ask for a letter from their employer confirming their annual income and verifying their length of employment.

Property Damage

Repairs and routine maintenance are par for the course when managing properties. Furthermore, accidents happen, which is why you (hopefully) collected a security deposit. That said, if you’re finding that repairs and renovations far exceed normal wear and tear and you’re either having to dip into security deposit funds – or worse – cover excess costs out of pocket, your tenant screening could be to blame.

Make sure you’re checking landlord references and specifically asking about what condition the property was left in and whether any portion of the security deposit was withheld.

Interpersonal Conflict

Good tenants want to live in peace with their neighbors and get along with their landlords. Toxic tenants, on the other hand, will not only cause issues with the people around them, but they can often trigger bad behavior from others in return. This can result in good tenants being driven away, increasing your turnover, and subsequently, your expenses.

An uptick in complaints could be an indicator that the tenants you’ve chosen weren’t screened thoroughly enough. Again, ask prior landlords to weigh in on any potential behavioral red flags. And don’t forget that criminal background check. Things like domestic disputes or property damage could be an indicator of anger issues – something you should steer clear of.

Early Lease Termination or Non-Renewal

Once you’ve found a great tenant, the goal is to keep them as long as possible. This includes locking them into a lease and, hopefully, getting them to renew when that lease is up. While not everyone will stay, most should. If you’re finding that an increasing number of tenants are either breaking their leases or opting not to renew, it could be two things. First, it could be that you’re not doing enough to keep tenants happy. Second, it could be due to poor screening.

When interviewing applicants, ask them about their future plans to assess whether they are looking for something long-term. Also, take a close look at their rental history. If they tend to hop from place to place, that’s something to be concerned about.

Keeping your properties filled with long-term, responsible tenants is the ultimate goal. If you’re noticing an increase in payment issues, property damage or conflict, or a decrease in your lease renewal rate, it’s time to re-evaluate your tenant screening process. This will enable you to proactively prevent turnover, protect your investment and improve your bottom line.

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