Reasons to Screen
No one but a criminal would want to move into your property if there are criminals there. The price you as a property owner or manager will pay for not conducting a thorough tenant screening
is very significant. When destructive tenants such as drug dealers or other types operate out of your property, your property value declines, and you can be held criminally liable or negligent and the entire neighborhood suffers from lowering of property values.
Additionally, the cost of repairs and the rental revenues lost while preparing the property for the next tenant are real problems for landlords. Property damage is common with bad tenants, either from abuse, retaliation or neglect. The cost to get rid of this tenant can be added to the cost of repairs.
When you invite bad tenants to your property, you can bet that the desirable tenants will leave your property. When you let a criminal move in next door, you send the message to that great tenant (who takes care of the property and always pays on time) that you don’t value them. In addition, when a bad tenant makes it through your tenant screening efforts
(Hopefully you make the effort!) he usually tells his friends how easy it is to move into your property.
Eviction is very expensive! You won’t be able to rent that unit for 90 days or more. And you will be saddled with legal process fees and all of your time spent working on the effort. Simply stated, it’s a lot easier to keep them out than to get them out!
The U.S. Department of Housing and Urban Development (HUD), arguably the largest property management firm on planet Earth requires that housing applicants be screened. Their guide (Public Housing Occupancy Guidebook) states; "Mistakes in admission can be costly to Public Housing Authorities… If families with serious lease compliance or criminal problems are admitted, their behavior is likely to consume the limited time and resources of property management staff and drive out the best residents." With the level of expertise represented at HUD, this strong direct statement should clarify that thorough tenant screening reports are JUST GOOD BUSINESS.Selecting a Tenant Screening Provider
There are many companies in the tenant screening
industry today. While comparing their products is relatively difficult, due to the fact that the information they give you has varying levels of depth, it is important that they are providing reliable data that is relevant to a landlord. Remember, as with most things in life, you get what you pay for. If one product is priced well below the others, you should be asking very pointed questions of the vendor as to the source and depth of their data. Imagine the costs associated in ridding yourself of that sex offender you just leased to because you wanted to save a buck or two!
The most complete tenant screening
services would include the credit report
, eviction report, possibly a criminal report
, and would verify the applicant’s current job and their residency history. Spending a little extra on tenant screening services is well worth the minimal extra cost. We at http://www.aaacredit.net/
can tailor your report to fit your needs.
All of the items in a credit report (see below) are included in tenant screening reports, plus the following:
- Rental history verification for current and previous rentals.
- Employment verification (and salary where possible).
- Checking account fund verification (with submitted copy of tenants deposit check).
- Optional inclusion of criminal record checks in tenant screening reports.
Complete credit reports are included in our tenant screening reports.They are nationwide and contain the following:
- Social security number check to identify misused or recently issued numbers and numbers of deceased persons.
- Address check to identify misused addresses and potential problems such as mail receiving services or prison drop addresses.
- Employment information verification where available.
- Public record items if they exist, such as:
* Tax liens (reported for 7 years after the lien is filed)
* Judgments (reported for 7 years after the judgment entered)
* Chapter 7 bankruptcies (reported for 10 years following the bankruptcy)
* Chapter 13 bankruptcies (reported for 7 years following the bankruptcy)
* Collection items (if they exist) and their status
- Up to 7 years of credit history
- A list of companies making inquiries into the individual's credit file
- A list of member companies (creditors) and their phone numbers
Tenant Screening is Crucial in Difficult Times
When Economic indicators are down and apartment occupancy drops, the natural temptation for those charged with filling apartments is to reduce applicant screening efforts. One way to reduce expenses is to settle on reduced data in your screening reports. It is easy to understand the drive to fill an empty unit, but by not screening effectively you are reducing the standards of acceptance for your rental community. The results are predictable and not favorable.
By looking back at the past couple of years we see the upward swing in vacancy rates in metro areas around the country. Many property managers reduced their standards by either not screening well enough, or by looking the other way when they saw information that would normally cause them to reject an applicant. While that may have solved the immediate problem of filling a unit, it didn’t solve the real and lasting problem of having that unit produce income. These landlords must now deal with lost income, court costs, and in many cases damage to the unit and the resulting repair costs. Diligence Pays.
Apartment dwellers with good credit take advantage of historically low mortgage interest rates and purchased a home. The remaining pool of available tenants therefore has a lower average credit rating. It just doesn’t make sense to reduce your screening efforts or your standards of acceptance in an environment like this. At times like these you need to more vigilant than ever, to prevent a further increase in your eviction rate. Remain Diligent and Profit!