Tip of the Month - October, 2020

Understanding the Importance of Screening

Source: Property Management for Dummies
             By Robert Griswold

If you are like many rental property owners, you may be thinking; “Screening? Isn’t that a waste of time? After all, I trust my gut instinct when I meet people, I know which ones are good and which are just trouble.” Although it does take time to verify all the information on your prospective tenant’s rental application, it is time well spent.  Relying on your instincts is a very inaccurate, arbitrary, and above all, illegal.

In order to increase your chance of finding a long-term, stable tenant, and in order to avoid charges of discrimination, your tenant selection criteria and screening process should be clear, systematic, and objective.  Put it in writing to ensure that the process is applied consistently and fairly to all rental applicants.

Setting up a systematic screening process is particularly critical if you only own a single rental or a small multi-unit rental property.  Professional dead-beat tenants (people who go from property to property damaging units or not paying rent) are experienced and shrewd. They know that the large, professionally managed rental properties have detailed and thorough screening procedures that attempt to verify every single item on their rental application.  If certain items do not check out, the professional property manager does not just trust her feelings on the prospective tenant.  The professional deadbeat tenants, who always have something to hide, know that small rental property owners are easier targets, because the novice property owner is more likely to bend the rules than the professional.

Sometimes the mere mention of the tenant screening process is enough to make the rental prospect fidget and then shift into the classic “I’m just looking” mode.  Do not rush or allow a prospect to hurry you through the tenant screening and selection process.  The wrong decision can be financial devastating, particularly if you have just a couple of rental units with monthly debt payments.

Establishing solid tenant-selection criteria and performing a thorough tenant screening process does not guarantee a good tenant, but it does significantly improve your odds.

This web page was updated on 09//292020.