There’s no denying the importance of screening prospective tenants before approving them for an apartment lease or other residential property rental. After all, tenant screening can help weed out applicants who pose a financial risk to the property manager or who simply have a less-than-ideal criminal record.
Even among property managers who screen their applicants, however, there are some serious mistakes that are all-too-common.
1. Being Inconsistent with Procedures
One of the biggest mistakes some property managers make when they screen prospective tenants is simply not applying the same screening guidelines and criteria to everybody. For example, one property manager might think it’s okay to let a close friend bypass the application and screening process; after all, he knows the applicant well enough and isn’t worried about the applicant’s financial or criminal history.
Unfortunately, if the applicant is approved without screening and another prospective tenant (who was screened before approval) finds out, this could be grounds for an expensive discrimination lawsuit.
2. Overlooking an Applicant’s Credit Report
Another mistake that far too many property managers make is that of overlooking an applicant’s credit report. Instead, they may simply run a credit check to verify that the applicant is currently making at least three times the monthly rent (that’s the standard in the rental industry) before assuming he or she is financially responsible enough to make consistent rental payments.
However, if that property manager had bothered to look more closely at the prospective tenants credit report, it may have been discovered that the applicant has been late or outright missed several rental and credit card payments in the past–and that he or she is a serious financial risk for the rental property.
3. Not Asking for Bank Statements
Finally, it’s extremely important to ask for copies of an applicant’s recent bank statements before approving them for a rental unit. After all, while the prospective tenants place of employment might verify that he or she makes a comfortable salary, property managers have no way of knowing how much of that person’s salary is tied up in other financial commitments.
By taking a look at an applicant’s bank statements, it’s possible to see what the prospective tenant’s free cash flow is like and whether or not he or she has a substantial amount of money reserved in a savings account. This can give property managers a good idea as to whether or not the person would make for a reliable tenant.
By avoiding these common tenant screening mistakes and investing in quality screening software, property managers can enjoy greater peace of mind when processing rental applications.