Why do landlords need a full tenant screening process?

It’s safe to say that every landlord wants reliable and respectful tenants. But sometimes it can take a while for the perfect tenant to request a viewing.  And you don’t want to let just anyone move into your property as this could end in disaster.

It’s important for landlords to incorporate a thorough tenant background check as part of the rental application process. A good tenant screening will reduce your chances of encountering problems with rent payments, neighbourly disputes or, in a worst-case scenario, having to evict your tenant.

To get a better understanding of the importance of background screening, here are five reasons why all landlords need a full tenant screening process.

Ensure tenants are financially responsible

Arguably, tenant credit checks are the most important part of any tenant background check. Carrying out a tenant credit check can help you get a clearer idea of a prospective tenant’s finances and how responsible they are. 

For example, if a prospective tenant has bad credit, this could be a sign that they will struggle to keep up with rent payments. Whereas, applicants who have a history of paying loans and bills on time are more likely to be trusted to do the same with their rent.

It’s really important that you can trust that a tenant will keep on top of their rent payments. After all, renting your property is a business at the end of the day. And among all the other responsibilities landlords have to juggle, you don’t want to be tracking down late rent payments too. 

If your tenant continuously fails to make payments every month, you may have to consider evicting them. Eviction is a stressful and arduous process for everyone involved, not just landlords. It can take anywhere between two weeks and six to eight months to evict tenants. To make matters worse, tenants sometimes refuse to leave, potentially forcing you to seek the services of a bailiff. Not only could this be more money out of your pocket, but also more stress on your plate. 

Keeping your other tenants safe

Landlords have a responsibility to protect all their tenants, especially when renting your property to two or more people who don’t know each other already. Not to mention, if you don’t carry out a thorough tenant background check and one of your tenants turns out to be dangerous, the blame could potentially fall on you. 

So in addition to checking a prospective tenant’s credit, you should also check their criminal history. Bear in mind that a criminal record doesn’t always accurately reflect whether or not a person will make a good tenant, particularly for minor misdemeanours such as a traffic violation.  It might be a good idea to have a conversation with the tenant to gain some more clarity on the situation if you feel safe doing so. This will allow you to make an informed decision about who to rent your property to for the safety of your other tenants as well as your own.

Prevent a high turnover rate

Having a low turnover rate is not always beneficial, particularly if you’re renting in an area where there are lots of students looking for temporary accommodation. Nevertheless, it can still prove useful. Not only will this save you time and energy looking for new tenants to rent to, but also a low turnover rate suggests that your property is the ideal place to rent. 

This can help win over prospective tenants whenever the time comes to find someone else to fill the vacancy. Carefully considering applications and completing a full tenant screening will reduce the possibility of eviction and, in turn, keep your turnover rate low.

Build relationships with quality tenants 

The property market can sometimes feel like an unfair game for landlords. Although we have entered ‘generation rent’ and the prospect of buying a home has fallen from 2 in 3 in the mid-1990s to 1 in 4 today, that doesn’t necessarily mean it’s gotten easier for landlords to find upstanding tenants.

That being said, being selective with who resides in your property could be the answer to finding quality tenants. If you include a full background check as part of your application process, tenants will hopefully take you more seriously and do their best to take care of your property. 

As a result, you should run into fewer issues with your tenants and if you do, they will likely be dealt with on time. Not to mention, this may help increase your reputation as a trustworthy and professional landlord, making it easier to build closer relationships with current and future tenants.

Learn about the tenant’s plans for the future

If the candidate ticks all the boxes on paper - good credit, no criminal history, good character - your first instinct may be to hand them the keys then and there. But it’s important to find out what your tenant’s plans are for the future. And we’re not talking about what they plan to have for dinner that night or their plans over the weekend- we’re talking about the big stuff! 

Do they plan on relocating in the future? Do they have any plans on changing their career path? Pretty much anything that could potentially impact the tenancy or cause it to end sooner than you’d like. After all, most landlords hope to find a tenant that will stick around for a while as we all know how difficult it can be to find upstanding tenants that take good care of your property. 

Take some time during the screening process to enquire about the applicant’s future goals. This may seem trivial, but this will help build honesty and open communication between you and your tenant. Plus, if they have an idea of when they are likely to relocate or be in between jobs, you can potentially prepare to start looking for a new tenant.    

While tenant screening can sometimes be a slightly lengthy process, it’s all about ensuring the safety of both you and those you’re renting to. 

Tenant screening helps reduce risk, however, things can sometimes go slightly wrong. Whether it’s vandalism or missed rent payments, you could ultimately end up footing the bill. To make sure that your income is not derailed, it’s a good idea to consider getting landlord insurance. Landlord insurance can help cover any unexpected costs that you may face whilst you rent your property, such as rent guarantee insurance.

If you need help finding the right policy for you, get in touch with one of our expert brokers today.