After you create the perfect listing for your Chesapeake rental properties, you'll start getting a flood of applications for potential renters. It's exciting! It can also be overwhelming to know which applicant will be your ideal tenant—or which prospects should not live in your investment properties.
It only takes one bad tenant experience—which generally tend to be very costly, as well—to realize how important it is to carefully screen tenants for your rental properties. Bad tenants can quickly become a nightmare:
- They don't pay the rent on time (if they pay at all)
- They refuse to follow the rules of the lease agreement
- They can cause significant damage to your property.
Avoid dealing with an expensive tenant mistake! Here's how investors can properly screen tenant prospects for their Chesapeake rental properties.
Use a Legitimate Screening Service
You can find plenty of low-cost online background screening services—but these are not the screening services you need to do an ethical and thorough tenant screening. Researching and selecting tenants is not where you want to save a buck to try and boost your bottom line! Keep in mind that selecting a sub-par screening provider not only puts your properties at risk—it puts you at risk, too.
Stay Within Compliance
Landlords need an FCRA-compliant screening partner for all tenant background research and reporting. The Fair Credit Reporting Act (FCRA) provides guidelines for how private information should be used, reported, and stored. You and your screening service need to understand the guidelines and make sure you're compliant.
- Do your research before choosing a partner to screen your tenants.
- Mishandling tenant applicant information can result in penalties.
- These penalties can affect your ability to generate the income you need through your rental properties.
If you're struggling to find the right partner, consider pairing your portfolio with a Chesapeake property manager. Property managers already have a vetted third-party screening provider for placing tenants.
Completing a tenant screening isn't a time-consuming process, but you need to be thorough. Most tenant screenings are complete within 24-48 hours. Be sure you receive a complete history for each tenant, including:
- Credit history: Potential tenants with a history of bankruptcy, large amounts of debt, or defaulting on loans might not be your ideal tenant.
- Employment and income history: Can an applicant afford the monthly rent and the fees for your property? Are they currently employed? Verify that a tenant can cover the financial responsibilities of living in your investment property.
- Criminal history: Be careful when reviewing and using an applicant's criminal history when deciding to select or deny them for your property. While a criminal record can be a red flag for a tenant, landlords cannot deny a tenant based solely on having a criminal record. Consult a lawyer or a Chesapeake property manager if you're not sure how to handle an applicant with a criminal record.
- Past rental history: Check the references provided on a potential tenant's application. Talk with prior landlords and ask about the tenant's behavior while they lived in that property. If an applicant has a history of evictions, late rental payments, or broken leases, you might want to choose a different tenant for your Chesapeake rental properties.
Don't be afraid of asking plenty of questions to understand the reality of a potential tenant. Your property is a significant asset to help build your long-term wealth! Be careful about who you allow to live in your property. Look for tenants who can afford your property and have a good track record of paying bills on time.
Be Choosy—Without Discriminating
How do you collect information and choose a worthy tenant without violating discrimination laws? It can be a challenge to navigate the tenant selection process—but with some guidance, you can find your ideal tenants and stay within the law.
- Before you begin your screening process, set your criteria.
- Create a static list of what you want in a tenant—and use the same standards for all tenant applicants.
- Never waiver from your criteria: this protects you and your properties from discriminatory practices.
Landlords cannot choose (or exclude) a tenant based on race, gender, age, disability, and other factors covered by the Fair Housing Act. Violating anti-discrimination laws can result in expensive lawsuits—and also cost you the ability to own and operate your Chesapeake rental properties.
- What does your ideal tenant look like?
- Are they millennials or Baby Boomers?
- Will you allow tenants with pets?
- Is your home a good place for a family with kids?
Make these kinds of decisions before you start accepting applications. With pre-set criteria, you lower your risk of an applicant claiming they were denied as a result of discriminatory actions.
Let the Chesapeake Professionals Help You Choose!
A Chesapeake property manager is your best source of information to navigate the tenant screening process. They understand anti-discrimination laws and follow the FCRA's best practices to protect you and your investment portfolio.
The Professional Landlords at Renter's Warehouse Hampton Roads have the resources and experience you need to screen and place your ideal tenants. We'll work with you to develop your criteria, then run every tenant applicant through our thorough screening process.
It can be challenging to recognize a bad tenant without doing the right research and following a standardized process. We understand how hard it is to undo the placement of a bad tenant in your rental property, and we're here to help you find the best quality tenants! Prevent a terrible tenant from the start by downloading our FREE Tenant Screening Checklist!