Much like the hiring process, finding a suitable renter for your property can get quite competitive. Just as you’d like to hire the perfect candidate for a job opening, you want to find the perfect renter for the property you have put so much work into representing.
Tenant verification is the best way to find said perfect renter. The results of the tenant screening are often the deciding factor when choosing who you want living in your rental property.
Referring a bad renter can ruin your reputation as an agent and end valuable relationships with landlords. That being said, you need to make sure your tenant verification process is comprehensive and reliable. In order to make your screening process as efficient as possible, we have debunked several myths about tenant verification.
Tenant Screening Myth No. 1: Tenant Verification is a Time-Consuming and Expensive Process
Because real estate agents are extremely busy, they will often rush a depthless tenant screen in order to save time. For example, they will ask a renter to provide a credit score and go no further in verifying them.
This is problematic because there are tenant verifications that provide instant, comprehensive reports on applicants. With a few clicks, you can get all the information you need to make an informed decision regarding your tenant in the time it takes to tie your shoe.
In order to get an instant, complete screening report you’d think you’d have to pay a premium. While most tenant screening services cost money, agents don’t have to be the ones paying for them.
In most states it is legal to charge the applicant a screening fee so you don’t have to go out of your pocket to pay for a service. In California the maximum you can charge is around $42. Therefore, there’s no excuse for you to be skipping out on these tenant verification services.
Tenant Screening Myth No. 2: Good Credit Score = Good Renter
While a credit report is an important factor in deciding if your applicant will become a good tenant, it is not the only thing you need to consider. A background check and eviction history are essential to every tenant verification.
A credit report provides important information like open trade lines, payment timeliness, credit inquiries, student loans, and mortgages. It is important for you to know if your applicant’s payment habits as well as the amount of loans he or she currently has.
While this is all necessary information, a background check provides criminal history including if your applicant is a registered sex offender. For obvious reasons, this is critical information about whether or not you should approve an applicant or not. Misdemeanors often don’t have an affect on a credit score, therefore a credit report alone won’t provide this information.
In addition, an eviction history is also a must-have for every tenant verification. If someone has an eviction on their record, it should be a red flag no matter what their credit score is.
Finally, just because someone has a good credit score doesn’t make them a good person. You should call previous landlords and references to get an idea of your applicant’s character. It is important you call more than one landlord because the current landlord might hate your applicant’s guts and will say anything to get rid of them.
Tenant Screening Myth No. 3: Any Tenant is Better Than No Tenant
It’s been two months since you started representing your rental property and the applications aren’t quite flooding in like you expected. You finally get an application in and jump to approve it. Not so fast.
While it may be frustrating to have a lack of applicants, trust us when we say that dealing with a bad renter is much worse. Take the time to verify every applicant no matter how many or few you have.
The last thing you want is to become involved in a drawn-out eviction proceeding. The average cost of an eviction is around $5,000 dollars. Another consideration is the headache associated with the process. Don’t hesitate to take an extra few weeks to make sure you find the right tenant and conduct a thorough tenant verification.
Tenant Screening Myth No. 4: Your Applicant is Who They Say They Are
We’d love to trust every applicant. We really would. However there are a few bad apples that ruin it for everyone. Fraudulent applications are a real thing and falling for a phony makes you look bad.
For the same reason we can’t trust a credit report from an applicant, we can’t blindly believe that the person applying is who they say they are. Make sure the social security number they provide matches with their information. The best way to do this is to always be sure to get a copy of their driver license or other form of state-issued identification. With this, you can cross-reference the information to make sure the tenant is who they say they are.
Tenant Screening Myth No. 5: All Credit Inquiries Damage Applicant’s Credit Score
Some applicants may be reluctant to have a credit inquiry run because of the potential damage it may cause to their score. While a hard inquiry will ding your credit score by up to five points, a soft inquiry does not damage a score at all.
Tenant verification services like TransUnion’s SmartMove utilize a soft inquiry, so you can conduct tenant screening without damaging your tenant’s credit score.