As a landlord, you need a reliable way to screen potential tenants and help ensure they’ll be responsible, pay on time, and respect your property.

That’s where tenant screening services come into play. But with the many options available, each offering various features and pricing structures, how do you choose the best one for your needs? 

In this guide, we’ve done the legwork for you, evaluating the top-rated tenant screening services. Using criteria like price, comprehensiveness of background checks, ease of use, data security, additional features, and customer support, we narrowed the list down to these 10 platforms:

• RentPrep
• SmartMove
• Experian Connect
• Apartments.com
• My Rental Spot
• RentRedi
• Avail
• MyRental
• RentSpree
• TurboTenant

Criteria for evaluating a tenant screening service

Before comparing the features of each service, here are some key factors to look for as you weigh your options: 

• Price: Select a service with transparent pricing and no hidden fees, ensuring you get the most value for your budget while still receiving comprehensive screening. In our experience, the cheapest options usually come up short and expose you to more risk than necessary. There’s no point in saving a few dollars when it might cost you thousands down the road.
• Comprehensive background checks: Opt for services that provide extensive background checks, including criminal history, credit reports, eviction records, and employment verification, to give you a complete picture of your potential tenant. Avoid services that only offer a credit report.
• Ease of use: Choose a platform with an intuitive interface that helps simplify the screening process such that your applicants can respond quickly and easily. This will also save you time and reduce the likelihood of errors.
• Data security: Confirm the service uses robust encryption and follows stringent data privacy protocols to protect sensitive information about you and your applicants.
• Additional features: Look for extra functions like automatic notifications, customizable screening criteria, and integration with property management software to help streamline your operations.
• Customer support: Select a service with responsive and knowledgeable customer support that can assist you promptly in case of any issues or questions. 

Top 10 tenant screening services

1. RentPrep

RentPrep stands out as a premier tenant screening service tailored to the needs of landlords and property managers who prioritize both thoroughness and efficiency in their rental processes.

With a history of serving over 150,000 landlords and conducting over 2 million tenant screenings, RentPrep has built a solid reputation around reliability, ease of use, and highly trained customer support.

Unlike many other platforms, RentPrep offers more than automated credit and background checks. FCRA-certified screeners are deeply involved in delivering the service, which helps ensure accuracy and compliance.

RentPrep is also designed to streamline the tenant screening process, which makes it easier for applicants to provide the necessary information and authorization required for a detailed and comprehensive background check. In the end, this makes finding the best possible tenants simpler and more effective for landlords.

Whether you manage a few properties or oversee a large portfolio, RentPrep adapts to your specific requirements, offering everything from detailed background checks to full credit reports with scores, income verification, and more.

Its user-friendly interface, complemented by the option to have tenants pay for their screenings, adds a layer of convenience and flexibility that RentPrep customers appreciate.

For those who manage and/or own larger portfolios, RentPrep Enterprise introduces customizable workflows, dedicated account representatives, and enhanced add-on searches, catering to a wide range of industries from single-family rentals to vacation rentals and beyond.

Key features of RentPrep:

• TransUnion ResidentScore®
• Nationwide eviction, judgment, and liens reports
• Bankruptcy searches to assess financial stability
• Comprehensive nationwide criminal and sex offender searches
• Pre-verified tenant identities to streamline the screening process
• FCRA-certified screening practices for reliable results
• Easy-to-use, centralized dashboard for managing screening requests
• Mobile-friendly platform for access on the go
• Fast and efficient screening requests, enabling quick decision-making
• Add-on options for income verification and credit decision reports
• High-volume tenant screening solutions with RentPrep Enterprise
• Customizable workflows for tailored screening processes (Enterprise)
• Dedicated account representatives for personalized support (Enterprise)
• Diverse industry applicability, including RV campgrounds, storage units, and more
• Automated or manual Enterprise account options to suit different operational styles
• Support for property managers and non-property managers alike

Pricing

With options from basic screenings to comprehensive, high-volume Enterprise solutions, RentPrep’s pricing plans are tailored to suit various requirements and budgets.

Here’s a closer look at each of the three primary plans offered by RentPrep:

1. RentPrep background check for $21

If you prefer a focused approach to background checks without the full credit report, RentPrep offers a custom solution for this:

• SSN validation: Confirms the validity of the Social Security Number provided
• Nationwide evictions: Identifies any past evictions across the United States
• Bankruptcies: Checks for any bankruptcy filings
• Judgment and liens: Includes details on judgments and liens, offering a clearer financial picture of the applicant

Note that The Credit Decision Report generates a report that can give you a simple pass/fail score based on a custom FICO credit standard established by the landlord.

Add-ons

• Nationwide criminal & sex offender search (additional $6): Extends the screening to cover criminal and sex offender databases
• Credit decision report (additional $11): Delivers a summary report of an applicant’s credit history
• Income verification (additional $10): Confirms a tenant’s stated income

2. TransUnion full credit report for $40

TransUnion’s full credit report via SmartMove is a robust option for landlords, offering in-depth insights into a potential tenant’s creditworthiness and background:

• Full credit report: A detailed overview of an applicant’s credit history
• ResidentScore®: A unique scoring system designed to predict rental outcomes more accurately than evaluating traditional credit scores
• SSN verification/address history: Validates an applicant’s Social Security number and traces their address history
• Nationwide criminal & sex offender search: Offers peace of mind by screening for criminal records and sex offender registrations across the country
• Nationwide evictions: Searches for any eviction records that could indicate a risk
• Bankruptcies: Reveals any bankruptcy filings to assess financial stability

Add-ons

• Judgment and liens (additional $7): Provides insight into any judgments or liens against the applicant
• Income verification (additional $10): Verifies an applicant’s income, helping ensure they can afford the rent

3. Enterprise High Volume Tenant Screening

Tailored for larger owners and property management companies, this plan supports high-volume resident screening with efficiency and customization (contact RentPrep for pricing):

• Dedicated account rep: Offers personalized support and assistance throughout the screening process
• Automated workflows: Streamlines operations, making the screening process more efficient
• Applicant pay options: Allows applicants to bear the cost of their screening
• Tier screening: Supplies different levels of screening based on landlord requirements
• Yardi integration: Ensures compatibility with Yardi property management software for seamless operations
• API integration: Enables integration with other systems for a unified workflow
• Advanced search capabilities: Provides enhanced search functions for comprehensive checks

Who RentPrep is ideal for

RentPrep is perfect for rental property owners that understand how important tenant selection is and value the peace of mind that comes with a human-validated background check. Fully automated screening services may sound quick and efficient, but they can be prone to false identity matches and missed red flags.

2. TransUnion/SmartMove

SmartMove(R) leverages TransUnion’s extensive database to provide detailed background checks, credit reports, and eviction histories. It offers landlords quick and generally reliable insights into the risks that may be associated with a prospective tenant.

Highlights

• Provides comprehensive reports quickly, including credit checks, criminal background checks, eviction records, and income insights
• Offers a unique ResidentScore that claims to help predict rental eviction risk 
• Allows flexibility in payment options, letting landlords choose whether or not applicants cover the cost of the screening

Shortcomings

• The Criminal Report and Eviction Related Proceedings Report are subject to federal, state, and local laws, potentially limiting or restricting the availability of certain records and leading to incomplete background checks
• May be more expensive than other tenant screening services, a possible drawback for budget-conscious landlords
• Requires tenants to complete the screening process online, potentially causing delays if not completed in a timely manner

Pricing

• SmartCheck Basic ($25): Offers ResidentScore and criminal background report
• SmartCheck Plus ($40): Includes Basic features plus credit and eviction-related reports 
• SmartCheck Pro ($45): Includes all features plus an income insights report 

Who SmartMove is ideal for

SmartMove offers detailed reporting options and is great for landlords who want to move as fast as possible.

3. Experian Connect

Experian Connect allows landlords to efficiently screen potential tenants through comprehensive credit reports and background checks, leveraging extensive data for detailed insights. Its partnership with Zillow(R) integrates tenant screening with the rental application process, offering landlords and property managers a seamless and reliable solution.

Highlights

• Integrates seamlessly with Zillow’s rental application process
• Offers consumer-permissioned reports that prioritize tenant privacy and allow applicants to maintain control over personal information

Shortcomings

• Dependent on tenant consent, potentially limiting the availability of information
• Takes 1–2 business days for the manual review process, potentially delaying the screening result

Price

Renters incur a $35 fee for the application and screening reports and can use the reports for multiple Zillow listings.

Who Experian Connect is ideal for

This platform is best suited for landlords seeking integration with Zillow’s rental application process.

4. Apartments.com

Apartments.com() tenant screening offers key information, including income-to-rent ratios, employment status, and rental history, helping landlords make quick and informed decisions. With the TransUnion ResidentScore, landlords can predict an applicant’s likelihood of paying rent on time, and tenants can share their application and tenant screening reports for 30 days with up to 10 participating landlords.

Highlights

• Utilizes TransUnion’s ResidentScore, a predictive credit scoring system that evaluates an applicant’s likelihood of paying rent on time
• Offers the ability to screen tenants quickly, helping assess qualified renters quickly

Shortcomings

• Allows applicants 30 days to share reports, potentially resulting in outdated information
• Lacks the option for landlords to pay for tenant screening if they wish to do so

Price

The platform charges potential renters $29 plus tax for their application and tenant screening reports, which can be shared with up to 10 participating landlords for 30 days.

Who Apartments.com is ideal for

For landlords seeking a fast tenant screening solution that integrates credit, criminal, and eviction histories, along with employment and rental background checks, Apartments.com is a good option. 

5. My Rental Spot

My Rental Spot offers a screening service paid for by the tenant ($30) that leverages TransUnion data, providing property managers with background checks, eviction records, and credit reports to assist them in selecting reliable tenants without incurring extra costs.

Highlights

• Integrates with an array of property management tools, including automated rent payments, customizable lease agreements, and detailed income and expense tracking
• Simplifies the tenant screening process through its online wizard to quickly generate and manage screening documents and lease agreements

Shortcomings

• Relies on applicants to facilitate the screening process, potentially resulting in delays if necessary steps aren’t promptly completed
• Offers extensive features and options, possibly overwhelming users seeking a straightforward, minimalist tenant screening service

Pricing Plans

Tenant screening is $30, paid by the tenant, with either pricing plan:

• Basic (free for landlords): Includes a personalized listing page, application and tenant screening, lease tracking and management, financial tools, and maintenance request tracking
• Essential (coming soon, starting at $45/month): Offers all Basic features plus repair coordination services and connections to local leasing agents for extensive property management support

Who My Rental Spot is ideal for

This platform is best for landlords seeking a cost-effective tenant screening service that integrates with property management tools.

6. RentRedi

RentRedi offers landlords an all-in-one property management solution that facilitates tenant screening with TransUnion-certified background checks, including comprehensive credit, criminal, and eviction reports. The platform also provides Plaid-certified income verification add-on, and its features are all accessible through a user-friendly mobile app.

Highlights

• Utilizes TransUnion-certified background checks coupled with Plaid-certified income verification for thorough tenant vetting
• Offers a user-friendly mobile app to both landlords and tenants for convenient property management and complete screening processes on the go

Shortcomings

• Charges a $39.99 tenant screening fee for screenings without income and asset verification settings , possibly deterring some applicants
• Integrates multiple functions into a single platform, potentially leading to a steep learning curve for new users, especially those who only require basic tenant screening services

Pricing

All RentRedi plans have a tenant screening fee of $39.99, paid for by the tenant, with add-on services like premium maintenance via Latchel available at an extra cost for landlords.

Who RentRedi is ideal for

Landlords seeking a comprehensive subscription-based property management solution that combines tenant screening with mobile app functionality may find RentRedi to be a decent option. 

7. Avail

Avail provides landlords with detailed online tenant screening services, including complete TransUnion credit reports, with screening options that include nationwide criminal history, and eviction records, helping ensure a thorough evaluation of prospective tenants. The platform also allows tenants to securely authorize and verify their reports, resulting in instant availability for landlords without impacting the tenant’s credit score.

Highlights

• Offers three tenant screening report options, giving landlords a comprehensive overview of prospective tenants
• Offers additional in-depth features, such as automated residence and employment reference checks, income verification, and customizable screening questions

Shortcomings

• Relies on tenant participation for authorizing and verifying reports, potentially causing delays if steps aren’t completed promptly
• Includes an extensive list of features, possibly overwhelming landlords who only need basic tenant screening services
• Screening report costs vary based on geography due to state laws, leading to inconsistent pricing that can be confusing for landlords

Pricing

The cost of tenant screening through Avail plans differs by location due to state laws, and landlords need to select the required reports for each applicant. Tenant screening report fees can be covered by either the tenant or the landlord, depending on the landlord’s preference.

Who Avail is ideal for

For landlords seeking a detailed and customizable tenant screening service, Avail offers comprehensive credit, criminal, and eviction reports along with automated reference checks and income verification, all initiated securely by the tenant.

8. MyRental

MyRental provides landlords with an extensive tenant screening service, offering a range of detailed background reports such as credit checks, housing court data, multi-state criminal searches, and the proprietary TU Rental Score to predict lease fulfillment risk.

Highlights

• Simplifies the screening process with a mobile-friendly online rental application, allowing applications to be sent and received on most devices
• Includes specialized searches, such as sex offender registry and terrorist database checks, adding an extra layer of security

Shortcomings

• Offers extensive features, potentially overwhelming or unnecessary for landlords who only require basic tenant screening services
• Varies in cost for screening packages and individual reports, possibly complicating budgeting for landlords, especially when factoring in additional address information and custom report requests

Pricing

Landlords can choose from two MyRental bundled package plans or purchase individual reports:  

• Basic ($24.99/applicant): Includes housing court data, additional address information, terrorist alert, multi-state criminal and multi-state sex offender reports
• Premium ($37.99/applicant): Includes all Basic features plus a credit report, TU Rental Score, and a renter pay option

Individual report options:

• Credit report: $14.99
• Housing court data: $7.99
• Multi-state criminal: $19.99
• Statewide criminal: $9.99
• County criminal: $14.99

Who MyRental is ideal for

MyRental is a great option for landlords that prefer an a la carte pricing approach and want to pick and choose each element of their screening reports.

9. RentSpree

RentSpree offers comprehensive reports powered by TransUnion, including credit checks, background checks, and rental histories. The platform is designed for ease of use, allowing landlords and agents to generate screening requests in minutes.

Highlights

• Allows landlords to manage and complete rental tasks from virtually anywhere with an easy-to-use centralized dashboard and mobile-friendly platform

Shortcomings

• Necessitates printing or saving tenant screening reports to avoid data loss as they expire after 30 days

Pricing

• Standard ($39.99/applicant): Offers essential tenant screening services like credit checks, background checks, and rental histories 
• Premium ($44.99/applicant): Includes all Standard features plus additional functionalities like income estimate and automated reference requests
• Application only (free): Allows landlords to receive a rental application online and conduct their own tenant screening
• RentSpree PRO ($19.99/month): Provides advanced tools like tenant screening, rental marketing, and payments to optimize the tenant management process and includes a 30-day free trial

Who RentSpree is ideal for

Landlords seeking a variety of pricing options, including free application-only services and advanced plans, may find RentSpree’s comprehensive tenant screening and management tools most beneficial. 

10. TurboTenant

TurboTenant offers a comprehensive tenant screening service that includes credit, criminal, and eviction checks powered by TransUnion, all integrated into a user-friendly platform. 

Highlights

• Allows landlords to invite tenants via email or text to a user-friendly platform and receive detailed screening reports quickly, streamlining the screening process
• Offers additional features like rental advertising, lease agreements, rent payments, and maintenance requests, making it an all-in-one solution for landlords

Shortcomings

• Limits income verification, custom questions, and a reduced tenant screening fee to the paid Premium pricing plan
• Offers a full suite of rental management services, potentially less suitable for landlords seeking a streamlined tenant screening process

Pricing

TurboTenant does not publicly state their tenant screening fees, but does mention that the cost is covered by the tenant.

Who TurboTenant is ideal for

TurboTenant is best suited for landlords interested in a comprehensive, cost-effective tenant screening service that’s part of a full rental property management platform.

Additional things to consider as you evaluate different tenant screening options

Choosing the right tenant screening service means looking beyond the basic features offered. Here are some additional considerations for choosing a platform that meets your needs and can enhance your overall experience:

• Income verification: Detailed income verification reports, including average monthly net income and current balances, provide a clearer picture of an applicant’s financial stability.
• Customizable workflows: The ability to tailor the screening process to your specific requirements can improve the efficiency of your operations. Services offering customizable workflows can help you better manage your tenant screening process.
• Hand-compiled reports: Look for services that offer hand-compiled reports to ensure higher accuracy by cross-referencing multiple databases, reducing errors and omissions.
• Integration with property management software: Seamless integration with property management platforms like Stessa can save you time and minimize errors, making it easier to manage tenant information.
• Scalability for large portfolios: Services that cater to both small portfolios and large property management companies, offering solutions for high-volume resident screening, can accommodate growth and varying needs.
• Volume discounts: If you manage a large number of units, look for services with volume pricing. That can significantly reduce your costs and provide tailored solutions for high-volume needs.
• Dedicated account representative: Personalized support through a dedicated account representative can help ensure your specific needs are met quickly and effectively, providing an enhanced experience.
• Educational resources: Access to a resource center, helpful blog articles, and state landlord-tenant laws can expand your understanding and management of rental properties.
• Professional associations: Affiliation with reputable organizations, such as the Professional Background Screening Association (PBSA) and the National Apartment Association (NAA), reflects a commitment to high ethical standards and industry best practices.
• Consumer protection: Affiliation with groups like Concerned CRAs helps ensure that the tenant screening service is dedicated to consumer protection and follows industry best practices.

Get started with RentPrep today

Ready to take your tenant screening process to the next level and protect your rental investments?

RentPrep’s seamless and comprehensive approach delivers accurate and compliant reports. With features like customizable workflows, dedicated account representatives, and integration with property management software, RentPrep is tailored to meet your specific needs.

Join the many thousands of landlords who use and trust RentPrep’s extensive resources.

Get started today. Set up your free RentPrep account and experience the ease and reliability of a top-rated tenant screening platform. Learn more about RentPrep and start screening with purpose and confidence.

The post 10 best tenant screening services [2024 edition] appeared first on RentPrep.

Background checks allow landlords to identify red flags and avoid problematic tenants.

But what is a rental background check, really? And how can it help landlords looking for the right renters? We can help you answer those questions with the help of one of our TransUnion reports for reference.

What Is A Rental Background Check?

A rental background check is a tenant screening tool that allows landlords to see various aspects of a rental applicant’s past behavior.

The majority of the data you’ll see comes from the three major credit bureaus:

• TransUnion
• Equifax
• Experian

This data helps to paint a picture of how responsible a tenant might be by providing landlords data on applicants’ credit scores and other details.

Where Do Credit Bureaus Get Their Data?

Credit bureaus collect financial information from sources like your bank, credit card issuer, or auto finance company. They also compile publicly available information about you, such as your property or court records. It may seem redundant for there to be more than one major credit bureau, but each one looks to different sources for information, so their reports may not all be exactly the same. This helps potential landlords to feel more confident about the data they’re reviewing, since much of it has been double or triple-checked!

You can read more about credit bureaus and how they collect their data at the Federal Reserve website.

What Does A Rental Background Check Show?

Here is what one of our TransUnion rental background checks consists of:

• Personal Details – provided by the applicant (pba)
• Address (pba)
• Income (pba)
• Full Credit Score (called ResidentScore by TransUnion)
• Address History
• Employment History
• Tradelines
• Collections
• Consumer Statements
• Inquiries
• Public Records
• Eviction Records
• Criminal Records
• AKAs

Personal Details

The first step of a rental background check is for the potential tenant to provide the following required personal information:

• Full name (first and last)
• Date of birth
• Social Security Number
• Phone number

The rental applicant must provide as many of these personal details as possible – particularly their name, birthdate, and Social Security Number. With almost 330 million US residents, the more identifiers someone includes on their application, the more likely they are to get the correct information about them. 

If the person applying to rent your property doesn’t have a Social Security Number or is unwilling to provide it to you, we have you covered with this blog post

Tenant’s Current Address

When going through the tenant screening process and conducting a rental background check, it’s a good idea to get an understanding of the applicant’s current living situation. Don’t assume that your potential tenant is currently renting, as they may own their current home but need to rent from you due to external circumstances. 

A simple pre-screening question such as “Do you currently rent, and if so, where?” should help you better understand their current situation. It’s a good idea to keep notes throughout the tenant screening process so you can reference back to them later.

The most important thing to consider in this phase of the rental background check process is that the applicant’s current address should match the information provided on their rental application.

Tenant’s Applicant Income

The next step in running a background check in your tenant screening process is to have the applicant provide you with their income. Be sure to lay out your minimum income requirements in your tenant screening criteria so that potential tenants are well aware of your preferred rent-to-income ratio. 

When having potential renters provide their own income information, you’ll want to check the following:

• Does the income listed on the rental background check match what they listed on their rental application?
• Does the income listed on the rental background check meet your minimum income standard?

Tenant Applicant’s Resident Score

Running a rental background check through RentPrep provides you with a TransUnion Resident Score ranging from 350 – 850. This Resident Score can be compared to credit scores provided by other credit reporting agencies.

In general, you can have confidence in an applicant if their TransUnion Resident Score is equal to or above 538. The scoring ranges are as follows: 

• Decline: 350 – 523
• Conditional: 524-537
• Low Accept: 538-559
• Accept: 560- 850

As was mentioned above, there is usually a discrepancy between the credit bureaus and what they report for a credit score since each bureau uses a different FICO model to assess credit.

The scale we’ve provided is specific to the TransUnion ResidentScore used with TransUnion. If your applicant runs their own credit through a different service, the numbers may differ.

The score itself is determined by several factors, each of which is weighted differently in the calculation. TransUnion has created its own ResidentScore that has been tailored to the rental industry by giving more weight to payment history, as this information is more important to a landlord.

For instance, Credit Karma uses a VantageScore model whereas TransUnion is based on a FICO model, which is what the large majority of banks use when assessing credit for a mortgage.

Address History

It’s no secret that corporations are buying, tracking, and selling our personal information to databases. If you signed up for a magazine 10 years ago at one residence and had a cell phone plan billed to your last residence, there’s a chance that information was sold and eventually ended up in one of the databases that TransUnion pulls information from.

This is how a background check is able to pull up previous address history. Keep in mind these addresses are pulled from external sources, and therefore are not verified. It’s also important to remember that an applicant may not have been renting at one, or any, of these addresses.

Compare the address history to what was included in your rental application. Where possible, you’ll want to call and verify with the current and previous landlords that the applicant was a tenant.

Good rental history is a sign of a stable renter. If you are considering renting to someone with no rental history, be aware that you may be taking on additional risk. In these instances (usually young or student rentals) many landlords will require a co-signer and/or increased security deposit.

Employment History

Similar to address history, employment history records are cultivated from large databases. These records are not verified, so it’s important that you call the current employer to verify information.

Tradelines

Trade Lines (or tradelines) are accounts on a background check or credit report.

This image shows the trade lines associated with our TransUnion reports.

The most common accounts for renters are revolving (credit cards) or installment accounts (anything with a fixed payment plan such as an auto loan or student loan).

Collections

Landlords should make sure to take note of any collections that show up when running a potential tenant screening. When a renter has a trade line that doesn’t get paid – such as utilities, credit cards, medical debts, or cell phone bills – the account can be sent to collections.

A one-time late payment can be considered a mistake, but a collection on your report shows a pattern of non-payment. Most services do not go immediately to collection upon payment being late, and many creditors do not send an account to collections until six months of non-payment have elapsed.

Some collections can garner wages. This can only happen if the creditor takes the consumer to court and is awarded a judgment.

If you have a renter with garnished wages, it means those funds are removed from their pay before they even see their paycheck.

Consumer Statements

A consumer – or, in your case, a tenant applicant – has the opportunity to issue a consumer statement on their report. This is a concise statement that gives the consumer an opportunity to explain things in their report.

The above image comes courtesy of creditcards.com and is a sample of what a consumer statement looks like. In this case, the consumer was making a statement to TransUnion to explain an incident of identity theft that affected their credit score.

There are two kinds of statements (according to Experian) that a tenant can request to have added to their credit report.

1. An account-specific dispute
2. General statement

The account-specific dispute is linked directly to the account in question. If that account is removed from the report, the statement is removed at the same time.

The general statement lasts up to two years on a credit report and is not deleted when a specific account is removed from a report.

This could be helpful in explaining if a potential tenant’s credit was negatively impacted due to fraud, medical debt, or an error or dispute with a business.

Inquiries

In this section of the renter’s background report, you’ll see credit inquiries on your potential tenant’s record.

Credit inquiries are requests by a “legitimate business” to check your credit. If, for example, your applicant applied for an auto loan with a bank, the bank would create an inquiry to check the applicant’s credit history.

Credit inquiries are classified as either “hard inquiries” or “soft inquiries,” and only hard inquiries have an effect on a FICO score (source: MyFico).

Our TransUnion reports and credit checks are a soft pull on credit, so doing credit checks through RentPrep allows you to investigate a potential renter’s credit history without affecting their credit score.

Student and auto loan applications are each treated as one inquiry, regardless of how many applications are made, since shopping around for the best student loan or auto loan is expected. Each credit card application, however, is counted individually, as someone might be considered a higher credit risk if they’re trying to open multiple lines of credit in a short amount of time (source: MyFico

Personal Records

Public records consist of bankruptcies, civil judgments, or tax liens.

Chapter 7 bankruptcy remains on a credit report for 10 years from the filing date if there were no repayment efforts, while Chapter 13 bankruptcy is deleted from a credit report seven years from the filing date because there was full or partial repayment.

This is why some landlords will make concessions for tenants with a Chapter 13 bankruptcy, such as renting to them with an increased security deposit, but will not accept an applicant with a Chapter 7 on record.

If your potential renter has a civil judgment against them, this means they lost a civil lawsuit and they must make court-ordered payments. Civil judgments remain on credit reports for seven years.

Tax liens occur when a tenant applicant has not paid their taxes. Unpaid tax liens remain for 15 years, while paid tax liens remain for seven years from the paid date.

The public record will note whether the judgment or lien has been paid, discharged, or settled. (source – Experian).

Eviction Records

Previous rental history is a good indicator of how a renter will be in the future. That is why eviction history is one of the most telling items on a background report.

Part of what you’ll receive in one of our TransUnion reports is the eviction records of your potential tenant. The image above shows a template of what is provided on an eviction record in one of our reports. Each report includes:

• The state where the eviction took place
• The county where the eviction took place
• The case type, which will read “Forcible Entry/Detainer” for an eviction
• The name of the plaintiff in the case (typically the landlord, apartment complex or property manager)
• The judgment amount of the rent owed, if any
• The action date, or the date the eviction was processed in court
• The name of the evicted person
• The address from which the person was evicted

TransUnion did a study where they analyzed records from nearly 200 properties comparing tenants who were evicted to those who were not evicted.

They found that 21.7% of the evicted tenants had a prior eviction on record, whereas only 5.5% of the non-evicted group had a previous eviction.

What does this data mean?

It means that if your tenant applicant has an eviction on record, they’re much more likely to be evicted again.

Criminal Records

How criminal records are to be considered when screening potential tenants is an ever-evolving issue. Landlords should no longer use a blanket criminal policy with rentals and it’s important to check local laws to make sure there aren’t additional considerations in your area.

However, criminal records are permissible screening tools if you can draw a connection between a criminal record and why someone wouldn’t be a good renter.

A background check will gather all available criminal data that is reportable from courts all over the country.

With our TransUnion reports, there are over 200 million records searched at the State and Federal level.

A criminal record, such as being arrested for or charged with a crime, is reportable for up to 7 years under the rules of the FCRA, while a criminal conviction is reportable indefinitely.

What Shows Up On a Criminal Record?

A criminal record will show whether your potential tenant has been arrested, charged, convicted, or sentenced in connection to a crime. The differences between these items are detailed below.

If an applicant was arrested, it means they were taken into custody but not necessarily charged with or convicted of a crime.

If your potential tenant has been charged with a crime, the prosecutor’s office decided to formally pursue legal action against them in connection with the criminal offense.

A conviction means the renter has been proven or declared guilty of the offense for which they were charged. If your potential tenant has been sentenced, a formal judgment has been issued for their punishment as a result of the conviction.

Why Does The Type Of Criminal Record Matter?

The different items that show up on a criminal record should be treated in different ways in the tenant screening process.

The Department of Housing and Urban Development (HUD) spells out that a landlord should not deny an applicant based solely on an arrest without conviction:

“A housing provider who denies housing to persons based on arrests not resulting in a conviction cannot prove that the exclusion assists in protecting the resident safety and/or property.”

This 10 page HUD document boils down to two paragraphs in the conclusion.

“Policies that exclude persons based on criminal history must be tailored to serve the housing provider’s substantial, legitimate, nondiscriminatory interest and take into consideration such factors as the type of the crime and the length of the time since conviction. Where a policy or practice excludes individuals with only certain types of convictions, a housing provider will still bear the burden of proving that any discriminatory effect caused by such policy or practice is justified. Such a determination must be made on a case-by-case basis.”

Basically, if you’re going to use a criminal record in your tenant screening process, you must make a viable case for why that crime jeopardizes the residents’ safety and/or property.

AKAs

AKA stands for “also known as” and is an alternate name or alias that a tenant might go by. For example, if your applicant’s name is “Michael Smith” an AKA might be listed as “Mike Smith.” A maiden name is the most common example of an AKA.

In the criminal sense, if the person committed a crime under a known alias (or pseudonym), that alias would show up under this section.

Some people have a known alias that acts as a nickname, while others have gone through the legal steps to change their name.

Here’s a list of famous athletes that would most likely have an AKA show up on their background check.

• Babe Ruth (George Herman Ruth, Jr.)
• Bubba Watson (Gerry Lester Watson, Jr.)
• Chad Ochocinco (Chad Javon Johnson)
• Dabo Swinney (William Christopher Swinney)
• Karim Abdul-Jabbar (Sharmon Shah)
• Spud Webb (Anthony Jerome Webb)

The post What Does a Rental Background Check Show? appeared first on RentPrep.

Your Free Rental Application Includes…

Permission from the applicant for you to run a background check, gather credit information and call references.

You want to make sure you never run a background check on a tenant applicant without proper written consent.

This can be found on the 2nd page of our free rental application form.

Helpful Tip #1: When you hand out the free rental app we strongly advise that you institute a “No Blank Space Policy.”

This means that you don’t accept rental apps unless they have filled out every single blank space on the application.

We’ve run close to 100,000 background checks on tenant applicants and we require a signed rental application from every single tenant applicant.

What we’ve found is a direct correlation between rental applications with blank spots and background reports with plenty of reportable data.

If the applicant leaves the SSN or previous landlord information blank, it’s probably because they have something to hide.

It may feel uncomfortable but simply tell the applicant that you have a No Blank Space policy and do not accept the application until it is fully filled out.

This is one of the easiest screening techniques you can implement on your own that will make a big difference in the quality of the tenant applicants you receive.

Helpful Tip #2: Charge a rental application fee

You do this for a few reasons. The number one reason is that if you want to run a background check on the applicant, it will be paid for by the application fee.

An ancillary benefit is that the application fee itself acts as a screening tool. It tells tenant applicants that you’re serious about running a background check. If the applicant knows something may pop up, they’re more likely to move on to the next available rental.

You will get fewer applications when charging an application fee but they’re typically higher-quality applicants. Hope these tips helped you and be sure to grab our free rental application above. If you have any questions feel free to ask in our Live Chat box and we’d be happy to help you run a background report on your applicants.

The post Tenant Screening Form [Free Rental Application Download] appeared first on RentPrep.

• Different types of showings
• How to reduce no-shows (automatically)
• Safety considerations
• Showing an occupied rental property

It begs the question, what’s the best way to show your rental? We polled our Facebook Group and got a lot of great answers on this topic.

Different Ways To Show a Rental Property

In this poll, there were three main ways that landlords and property managers used to show their apartments.

• Individual Showings
• Individual showings scheduled in a block of time
• Hold an open house

The fourth option is the same as an open house with a different context. We will cover that briefly as well.

Individual Showings

This one is straightforward. You find an agreed-upon time and you meet the interested renter to do a walkthrough.

Pros

• You can be hands-on and really highlight the rental. A good realtor does this when they’re trying to sell a property.
• You can easily keep an eye on an interested renter. You can walk with them to make sure that nothing in the rental gets legs, this is crucial for occupied rentals.

Cons

• A renter may not show up which could throw off the entire showing schedule.

Individual Showings Scheduled in a Block of Time

If you’re showing an apartment, it really shouldn’t take more than 10 minutes. In these situations, you can schedule your showings in 15-minute increments.

Pros

• Save on trips to the rental
• Still, give individual attention

Cons

• If someone is late, it can throw off your schedule
• Not as flexible for the interested renter

For more information on how to deal with no shows, check out this video:

Hold an Open House

When Apple first launched the iPhone, they purposefully made it a huge event and limited the supply. It created a buyer’s frenzy where people would camp out to buy a phone.

Pros

• The laws of supply and demand still ring true when you show your rental. You create a sense of demand when eager renters see competition in the form of other interested renters. If there are not a lot of rentals on the market, this can certainly drive a lot of demand for your rental.

Cons

• It’s difficult to highlight features, and it makes the process a little more hectic. When you walk the rental with one person, you can take note of cues they give you. Perhaps they’re nitpicking every aspect of the rental, or they dragged mud into the rental. When an open house gets busy, it’s hard to see and hear everything. You might just be looking at a stack of applications at the end with little idea of who is who.

What If The Open House Gets Too Crazy?

If there’s a huge demand in your market and you don’t have time for anything but an open house, here’s what you do. Charge an application fee to run a background check. This fee can be collected as a check or you can make it known the renter will pay directly for the background check.

If you make this known in the initial pre-screening interview, you will weed out a lot of tire kickers. It all depends on the demand in your market. If it’s very high, you can make this information known earlier on.

5 Extra Tips for Showing a Property

Here are 5 winning tips that you can employ when it comes to showing your vacant rental property:

Tip #1. Dress for Success

You are a business owner and you need to dress like one. Now, that doesn’t mean an expensive pantsuit or shirt and tie, although that can give a favorable impression and show that you do mean business. As long as you ensure that you are dressed in a clean and neat manner, and are well-groomed, you will definitely give a great first impression to your prospective tenants. Check your personal hygiene, like your nose, your breath and your teeth, just as you would for a job interview because in essence, that’s what this is.

The visitors are checking you out to see if you seem like a reasonable, businesslike landlord they would want to deal with. Give them the best version of yourself and you’ll find that like-minded people will be drawn to you.

Tip #2. Smile and Greet

Even though showing your rental property is a serious part of filling a vacancy, you must make sure you are putting everyone at ease with your demeanor. Feeling relaxed around strangers can be difficult for those who are not used to meeting formally and a forced smile and stiff personality may be a turn-off for those perfect applicants.

Treat everyone like they are exactly the tenant you are looking for, especially by using their name in your conversations and making them feel comfortable and welcome. Imagine you are a worker in a shop who must greet customers as they enter and help them find what they want. Keep in mind that at this moment in time, they could be just what you are looking for.

Tip #3. Provide Information

You’ll definitely impress visitors to your property when you have a convenient information packet to hand them. It won’t take long to create documents that look professional and have exactly what you want visitors to remember.

Include a rental property information sheet that has a photo of the place, the square footage, the monthly rent and security deposit amounts, the number of bedrooms and bathrooms and list any extra features like free cable. Make sure you include your contact information loud and clear on this page.

Other items you can include in the information packet might be a printout of area schools, a list of nearby attractions or features like museums or bike trails, and proximity to major roads for commuting. Put all this in a new folder or staple it neatly.

Tip #4. Leave Them Alone

After you’ve given the tour and answer questions and things seem to be wrapping up, give the visitors some time alone in the rental unit. This gives them a chance to speak frankly with each other if it is a couple, family or potential roommates. If the visitor is a single person, being alone for a few minutes allows them to collect their thoughts and formulate more questions for you.

Above all, you want the visitors to envision themselves living in the unit, so giving them a few minutes to visualize this can be very powerful. Simply say that you want to give them a few minutes to look around on their own and that you’ll be in the front room or right outside when they are ready to ask any more questions. It’s a nice technique that walks the fine line between being too pushy and not getting involved.

Tip #5. Do It All Over Again

You won’t know which visitors will be the ones to apply, and even then you won’t know whether you like what you find once you run the background check. It bears repeating: Treat every visitor as if they are the ideal tenant. That means keeping the same standards of dress and hygiene, the same level of enthusiasm, and spending the same amount of time with them on the tour.

While it can be hard to get psyched up for each showing, take care of yourself and don’t stress out. It can be really draining to be “on” in front of strangers frequently, but it’s worth it to ensure that the quest to find the ideal tenants will be a success.

The way you present yourself and your rental property during an open house visit is probably the single most impactful thing you can do to turn curious visitors into committed applicants. Don’t lose those ideal tenants by dropping the ball during the visit.

Have you discovered any tips or techniques that help you out when showing a rental property to visitors? Please share this article and let us know your thoughts in the comments below.

The post How to Show a Rental Property: 3 Common Ways + Tips for Each appeared first on RentPrep.

Marketing a vacant rental property means you will be getting emails and phone calls from interested prospective tenants with all kinds of questions. Save time for both you and the interested caller by conducting a pre-showing interview (over the phone) that reveals whether you are right for each other.

You can also introduce a “pre-screening survey” via Google forms into your process to automatically weed out some applicants. After answering the caller’s questions about the rental property, mention that you have a few questions of your own that will help them determine whether the rental property is a good fit for them.

It also gives you a chance to see whether the caller meets your initial criteria for screening.

Top Questions to Ask Potential Renters

So, you’re at the point where it’s time to come up with questions to ask potential renters. How exciting! Here are a few top screening questions to start you off that you can ask over the phone before showing the property:

1. Do you currently rent, and if so, where?
2. How long have you lived in your current home?
3. Why are you looking for a new place to live?
4. What date would you want to move in?
5. What kind of work do you do?
6. What is a rough estimate of your income?
7. How many people would be living with you?
8. How many people living with you smoke?
9. How many parking spaces would you require if you rent here?
10. How many pets do you have?
11. Do you think your current landlord will give you a favorable reference?
12. Does your current landlord know you are thinking of moving?
13. Have you ever had an eviction?
14. Are you familiar with our rental application process?
15. Are there any issues I should know about before I run a background screening for all the adults in the household?
16. Have you filed for bankruptcy recently?
17. Will you be fine to pay our lease application fee of ($ amount) if you fill out the application?
18. Would you be able to pay the security deposit of ($ amount) at the lease signing?
19. Are you willing to sign a 1-year lease agreement?
20. Do you have any questions for me about the process?

Based on what kind of answers the caller provides, you may be able to save both of you a lot of time and energy. For example, after you ask about the caller’s pets and you explain your pet policy, you both may come to the understanding that their application would be denied based on pet ownership.

They may also learn something about the rental that doesn’t suit them and declines to pursue the property any further. Either way, you have conducted an efficient pre-showing interview that gives you time to work with truly qualified applicants.

How to Create a Pre-Screening Survey Using Google Forms

A Google Form can be a handy tool in your landlord toolbelt. In the video below we show you how to create a Google Form to automatically weed out bad applicants from your rental listings:

How to Screen Applicants After Initial Questions

The purpose of the pre-screening questions is to limit the number of bad applicants you show your rental unit to. If the applicant sounds good over the phone and passes your initial criteria, you will want to show them the rental.

Next up, we share tips for showing your rental property.

The post 20 Key Questions to Ask Potential Tenants appeared first on RentPrep.

Landlords: Ask These Questions Before Advertising Rental

Let’s first figure out who might be naturally attracted to your rental. It’s illegal to discriminate in your advertising, but we can still take an honest look at what type of renter your rental will attract.

Ask yourself questions about the rental such as…

• Is my rental located close to a college?
• Is my rental close to downtown attractions or tourist spots?
• Is my rental located close to large hospitals?

When you understand who you’re likely to attract then you can make sure you don’t miss opportunities. Let’s use the hospital’s question as an example.

You can make a good amount of revenue by renting short-term furnished rentals to traveling nurses. This niche of renter tends to find their housing via referrals and niche groups online. You can go to Facebook and enter “Traveling Nurse” into the search bar to get ideas.

Just in this one search, you can find several places to advertise and connect with your niche renters. It’s important you understand who is likely to be attracted to your rental, so you can go find the places online where these people are likely to search for housing.

And consider making additions to the rental based on your renter’s avatar. For example, for college housing, you may consider USB electrical outlets. For the elderly, you may consider handrails and grab bars and for traveling nurses, maybe consider semi-furnished. Understand what your renter’s avatar looks like so you can cater the rental to their preferences.

Some Tips Before Advertising Your Property Online

Before we jump to online listings, let’s discuss a few traditional advertising methods. There is value in these methods, but on the whole, more renters are looking online than anywhere else. Here are a few tips on what to include in your rental advertisement.

Put Up The Classic “For Rent” Sign

There is value in these, but just not as much as it used to be. If you have a busy street a “For Rent” sign can be helpful. It’s more likely to attract someone with familiarity with the neighborhood.

Perhaps you’re interested in traveling nurses, and you know someone who can pin up a flyer in the hospital break room.

Take Amazing Rental Photos

There’s a reason Instagram sold to Facebook for a billion dollars, and people said it was a steal. Pictures are valuable. They’re easy to view and require little mental energy to digest. The majority of us are not going to read an entire listing (rent or buy). We look at location, price, and pictures.

Let’s talk about taking better pictures, so we have quality images to share on your listings. Simply paying attention to framing and lighting can go a long way with your photos. Watch the video above to learn how to take better photos for your rental listings.

Edit Your Photos

You want to go the extra step and edit the photos to give them a nice touch. In the video above we discussed paid and free options for editing your photos. Pixlr.com is a free photo editing software, and Fiverr.com is a cheap option for getting your photos retouched. These photos can be reused if you’re consistent with your paint options and the rental is updated.

Where You Should Advertise Your Rental Property

Here are a few of our top pciks:

Zillow

Zillow can syndicate one listing out to several sites at once. When you post via Zillow Rental Manager your listing will automatically be shared on the following sites:

• Zillow
• Trulia
• HotPads
• AOL Real Estate
• MSN Real Estate
• MyNewPlace

When you post to Zillow, your rental listing will be active for 30 days. Here’s a how-to video on how to post your rental to Zillow:

Craigslist

The other usual suspect is Craigslist. We’ve heard from our clients that it really just depends on your market as Craigslist can be a little sketchy in some markets. But, it’s free and it’s a start! Here’s an entire guide on how to list your property on Craigslist.

Facebook Marketplace

Facebook has pros and cons when it comes to listing your rentals. Some landlords don’t like the personal nature while others appreciate having insights immediately available through social media. On our podcast, we debated the merits of advertising on Facebook vs. Zillow and Craigslist. Check it out here.

Here Are The Questions Discussed In This Episode:

• Using Facebook Marketplace to market your rentals

• How much weight do you put on credit with a background check?

• How do you tell someone you don’t want to show property after pre-screening?

We’ve also had other clients share that they’ve had success with local “For Rent” groups and other buy/sell groups on Facebook. In episode #177 of our podcast “RentPrep For Landlords,” we talk specifically about using Facebook groups for marketing your rentals.

Cliff Notes of podcast guests

• Justin from Scranton, PA – Likes being able to post multiple pictures, and post to several group sites such as yard sales, renter groups, and personal page. He likes being able to see the background of their profile pictures.
• Natalie from Illinois – Uses Facebook to market her properties and finds it very helpful. She likes to go to groups specific to her county. She recommends always including the price and all details, so you’re not getting unwanted messages. She also has a rental with a large garage that has a nice workshop in it. She posts this rental to local woodworking groups.
• This is a great example of understanding your rental and how it might be attractive to a certain type of renter. This, in turn, helps guide your advertising efforts.
• Jennifer from Maryland – She uses Facebook rent groups and recommends trying to get engagement on the post as it will get more views. The more comments and likes you get the more reach your post will get.

It might be worth it to try and stir up engagement on the post and encourage people to comment on your posts in Facebook groups.

What to Include In Your Rental Listings

So we’ve covered a few options on where to post and how to take good photos, now let’s discuss what to write. Here are a select few pieces of advice from some well-known realtors around the country:

Highlight Your Property’s Best Features

Skip boring and think attention-grabbing. Highlight the property’s features. Is it located in a popular part of town, does it have an open floor plan, or what about the fact that you have an inside laundry room as opposed to being in the garage? Think of what is a plus and elaborate on it.

For example, hate doing laundry in the garage? Then you’ll love the property’s interior laundry room. Or how about: You’ll love the home’s open layout that is perfect for being together with family and friends. You get the idea – it’s about creating a picture of what the property is like that would pique the interest of prospective tenants.

Include a Captivating Description

Nothing can grab the attention of a tenant more than a listing’s description. You can make almost any rental sound attractive if you just use the right words in your advertising copy.

Boring copy will have prospective tenants, skip right over your advertising. And by all means, if writing attractive words isn’t your thing, you’d certainly benefit by hiring someone to write a descriptive, appealing copy for you.

A legendary ad writer by the name of Roy H. Williams encourages you to write in the second person present tense when writing an advertisement. Your rental listing is nothing more than an advertisement to interested renters. Here’s how Roy explains this on page 28 of his book The Wizard of Ads.

The most irresistible word in the English language has only three letters. The most powerful of all words is “you.” “You” engages the imagination of the listener. It puts the action of your spot in the present tense active. Skillful use of the word “you” makes the listener a participant in your ad. Another thing Roy recommends is to use verbs because they are visually active.

Example Of A Good Rental Property Description:

1. The kitchen is spacious with plenty of natural light
2. Your new kitchen features sweeping marble counters highlighted by cascading natural light

The first bullet point is descriptive but bland. It lacks any feeling of movement or possession. The second bullet point is written in the second person (Your) with present tense verbs (sweeping & cascading). These little additions help the reader to imagine themselves in the rental. If you can engage the imagination, you’ll increase your response rate with your listings.

Include Some Screening Criteria In Your Rental Ad

Have you ever had a salesperson call you and go right into a long pitch? Meanwhile, you’re trying to find the time to tell them they have the wrong number.

If that salesperson started their call by confirming your name they’d save a lot of wasted calls on wrong numbers. The same is true with your rental listings. Some people are not a good fit and you don’t need to run a background check to figure that out.

Here’s what to include in your screening criteria:

• Stance on pets
• Stance on Smoking
• Your rent-to-income ratio
• Lease terms
• Do you run a background check

Here’s a first-hand example of what a rental property ad included:

• No pets are allowed
• No smoking is allowed in or near the premise
• We require the renter to make at least three times the monthly rent in income
• Our lease is for 12 months, and we do not offer month-to-month options
• We run a complete background check on applicants

The idea behind these statements is to weed out bad applicants from even expressing interest in your rental. You’ll still get those emails that say “Do you accept dogs?” or “Would you consider a six-month lease?” but stating these items will reduce the amount of low-quality leads you to receive.

Stating that you run a background check will deter many renters with a questionable past. As mentioned earlier, people tend to look at pictures more than text. That is why you’ll still get calls from people who should realize they don’t qualify.

Screening Criteria Hack

Here’s a little hack to help deter unqualified renters who skim listings. Include your screening criteria as an image in your listing. This will bring your criteria to a more prominent location helping you to weed out bad applicants.

If you have a hot rental market, you can add your criteria as the second image. If it’s a slower market, you might want to make it the last image, so the message doesn’t come off as strong.

Rental Ad Checklist

Here’s a small checklist we’ve put together to help you get the best tenants possible.

1. Assess your rental and understand your renter avatar
2. Take great photos of your rental & spend time (or money) getting them edited
3. Post to Zillow, Facebook, and Craigslist and keep track of your results
4. Write your ads in the second person present tense “Your new kitchen features sweeping.”
5. Include criteria in your rental listing to reduce bad applicants
6. Generate inquiries and move on to the pre-screening phase

In the next chapter, we will discuss how you can start to weed out applicants. This is done through pre-screening tenant applicants over the phone.

The post How to Advertise Your Rental Property: Step-by-Step Guide appeared first on RentPrep.

It might feel like you’re unnecessarily showing your cards or taking decision-making out of your hands by listing your criteria. However, the more prepared you are the more confident you may be in finding a highly qualified tenant.

Setting Up Tenant Selection Criteria: Sample Form

It is a little extra work up front and it does make your screening process more rigid. But, it’s imperative that a landlord set up their tenant selection criteria when screening potential applicants.

Some refer to this document as a rental criteria form and in other parts of the country it is referred to as a tenant selection criteria form. These names can all be used interchangeably.

Click Here For A Sample Tenant Selection Criteria Form

Now, let’s take a look at why you’d want to incorporate one into your tenant screening process. Tenant screening criteria will help you create a system for how you judge tenant applicants and rock solid defense in a discrimination claim.

Think of tenant screening as an applicant filling out a robust scantron form. Your criteria act as the answer key and unlike a regular test you can share it with your applicants before they apply.

This will tell them upfront what your standards are and a thorough background check will show you if they pass or fail. Is it more work to set up your criteria? Yes, but it’s also easier to grade applicants once you have criteria in place for your rental.

How to Use Tenant Selection Criteria to Defend a Discrimination Claim

We covered the FHA in chapter two of this tenant screening guide. The FHA is regulated by HUD, and it’s pretty easy to submit a discrimination claim with them.

It’s just a Google search and an online form. It would take a motivated applicant less than four minutes to find and fill out. HUD will take a look at the claim and may reach out if it seems serious.

The claim might be something like the following, “I feel I was denied because”:

• I have kids
• of my religious beliefs
• of my race
• of my sexual orientation

As of August 16th, 2016 the fines for violating the FHA are as follows:

• No priors $19,787
• One prior: $49,467
• Two or More Priors: $98,935

So if you’re found guilty of violating the FHA as a first-time offender you can receive a civil fine of up to $19,787. That does not include other fees such as attorney and court costs.

That being said, what is something you could say when HUD calls about discrimination?

“Yes I remember ______ they seemed upset when I denied them the rental, but I provided them with my screening criteria, and they did not pass my criteria. They did not meet my rental history and credit requirements. That’s why they were denied the rental. I could show you a copy of my criteria if you like.”

In this conversation, you clearly show that you have a system and you have specific legal reasons why you denied them the rental. You don’t want to answer this question with, “I had a bad feeling about this renter, so I denied them.” Hopefully, this little pitch will drive home the point that it is worth the time to set up your criteria.

Here’s more information about how to use tenant criteria in your rental listings:

The Rental Criteria Form: What to Know

In the sections below we will break down each aspect of your new form. We will discuss why it’s important and what you should be aware of. This is important, so you understand how to stay in compliance with your laws.

As a reminder, make sure you read and understand your state and local laws. For instance, in Texas, you’re legally required to present your criteria to applicants during the application process, and you must get a signature showing they saw it.

What Rental Property Information to Include in Your Criteria

Here’s what you should include about your investment property when creating tenant selection criteria.

Address Of Property

Landlords should include the address of the rental property, and the name of the landlord or property management company needs to be clearly stated.

Description Of Property

Provide initial details about the rental property on the tenant criteria document. This way, if applicants discover something that they don’t want or need a place to live, they can remove themselves from consideration right away.

What Is Expected

You may have already mentioned your stance on smoking several times, but your criteria is another mention that might check someone off your list. If animals and smoking are not allowed, it should clearly state so. If animals or smoking are allowed, the document should state the details of what is allowed.

For example, an animal policy might include how many, what size, restricted breeds and anything about a pet deposit. If the prospective applicant is not immediately in line with any of this property information, they will not even fill out the rest of the application. This self-selection will save both parties a lot of time and effort.

Note: Most refer to it as a “pet policy,” but after recording this podcast on ESAs, we’ve adjusted the language to an “animal policy.” Please give that podcast a listen if you’re unfamiliar with the laws surrounding service animals and emotional support animals.

How to Verify Rental History Criteria

Sometimes, there is always that one tenant that is late on rent or had issues with the rental. Lucky for you, landlords can use rental history as a criteria.

There is perhaps no better way to discover what kind of tenant an applicant will be than by looking at what type of tenant they’ve been in the past. The most telling piece of information discovered during screening is whether an applicant has been evicted. Eviction is the legal action of expelling someone from a property.

There are specific steps that landlords must take to carry out an eviction, and the result is a hearing in court. The eviction becomes part of the public record; therefore, a background check will reveal any made against the applicant.

Part of the tenant screening process includes talking to an applicant’s previous landlords. These landlords can reveal plenty of rent-related information about an applicant:

• Number of late rent payments
• Complaints about the tenant
• Did the applicant ever break the lease agreement
• Did they have to deduct and damages from their security deposit

Here’s a mock phone conversation where our CEO Stephen White shows you what to ask when calling a previous landlord. Now let’s say you called the previous landlord and your applicant has excellent rental history but poor credit. Rental history can be used to complement a credit history that may not be as pristine.

For example, even if applicants have experienced some credit difficulties, they may still be eligible to rent. That’s because the landlord can set complementary or conditional criteria for credit history and rental history. They can set a lower credit score, for example, but higher rental history standards. This allows applicants to be eligible to rent with fair credit if they have paid rent on time every month for the length of their last lease.

You could have verbiage added to your document like this:

“We require a credit score of 620 or above. If the applicant’s credit score is 550 to 619, they can still be accepted with conditions. We would require an increased security deposit of a certain amount and an increase in their rental history to 24 months with the same landlord. The applicant must also have an increase to 18 months of employment with the same employer. If the applicant has a clean history with the previous landlord, they will be considered if all other conditions stated above apply.”

Of course, the rental history criteria must be applied equally to every applicant to avoid discrimination.

Income Requirement Criteria

An income requirement is very common for landlords and property management companies to use in evaluating an applicant. A background check on the applicant must show sufficient income to be approved to rent a unit.

Landlords require each applicant to supply proof of their current income. They are looking for all income, such as salary, child support, Social Security and similar streams of income.

Landlords generally use an applicant’s gross income (what is earned before taxes and withholdings) to figure out someone’s rent-to-income ratio. The higher the total verifiable income, the better that rent-to-income ratio will be, which increases the applicant’s chance to qualify for the rental unit.

Some landlords must use the combined income of every adult on the application that will be living in the rental, such as in a roommate situation. When landlords use an income-to-rent ratio to help them screen applicants, they are most likely looking for a 3 to 1 ratio of income to rent or around 30 percent of total gross income.

Ratio Based On Multiplier Of Rent

Here’s what to include in your ratio when trying to determine just how much rent you should be charging for your rental property.

• Your monthly rent

• What is your multiplier (2.0 – 2.5 – 3.0 – 3.5)

• Gross minimum renter should make per month

• Gross minimum renter should make per year

To make this easier, we’ve put together a spreadsheet to help you calculate this:

Click Here for The Excel Sheet

If the rent takes up too much of an applicant’s monthly income, landlords worry that they won’t be able to take care of the rent each month. Landlords don’t want future tenants to have to choose between paying rent and something else because their budget is too tight.

3 to 1: The Unofficial Rent Standard

Financial experts have determined that when people spend not much more than a third of their income on rent, they still have enough money for other living expenses like transportation, groceries and more.

In some places, generally urban centers and major cities, this ratio is almost impossible to abide by, and it becomes more like 40 percent of their income. However, most landlords want to see their tenants making three times the rent to give them peace of mind that they will always be able to make the payments on time and in full.

Income must be verified during the tenant screening process. This is usually done by contacting the applicant’s current employer to supply an employment verification request. The landlord can also request recent paystubs or W2s from the applicant to confirm income. Other sources of income beyond salary should be verified with the appropriate documentation as well.

Employment History Criteria

Besides income verifications, many landlords choose to use employment history as part of their selection criteria. The screenshot above shows the employment history on one of our SmartMove reports.

A promising applicant should have a solid work history that does not show job-hopping, employment gaps or a steady income. If these warning signs are present in an applicant’s employment history, it could indicate a past or potential difficulty in paying rent due to unstable employment habits.

It’s a good idea to call the employer to verify the dates and income listed on your rental application because databases have a tough time verifying this type of information. Here’s a video on how to make these types of calls.

Sometimes applicants list unusual employment backgrounds, such as self-employed, commission-based or similar situations.

These don’t make the applicants any less qualified, but the landlords will need to request slightly different documentation. The most common is a copy of the most recent tax return or several months of bank statements.

This is to show a consistent income level that the landlord can feel comfortable with. It also proves that the applicant can sustain a certain income level to meet all their needs.

When it comes to employment history, landlords must decide their criteria to consider whether working in the same industry is fine for a certain number of years or if they prefer at least six or twelve months or more with the same employer only.

Sometimes a younger applicant may not have extensive employment history and landlords should take that into consideration. If all the other aspects of a background check work out, but the employment history is limited, landlords should find out why and use that information accordingly. As always, the criteria must be applied to every application rather than selectively.

Credit History Criteria

With tenant screening, most landlords include a credit check to provide a detailed look at the applicant’s financial situation.

Credit history is one of the essential parts of the applicant’s past. Landlords must impose the same credit report standards on all applicants for the rental.

However, a landlord can have different credit standards on various rental properties. For example, they can’t just choose to run a credit report on single moms or people of only one race. Landlords must treat every applicant the same and use the same credit history criteria when making their selection.

The credit bureaus assign a credit score that indicates whether the consumer has bad, poor, fair or good credit. Most landlords set a minimum standard for an applicant’s credit score as part of their screening criteria.

Depending on the location, type of unit and comparable applicants, landlords can set the credit score higher or lower as they wish. Once that score is set, however, it must be used against all the applicants equally.

Credit reports can cover anywhere from seven to ten years, so it’s easy to identify any positive or negative patterns. A credit report will show a landlord if the applicant has ever been evicted.

It can also show whether the applicant is deep in debt, late on their bills or if there is any kind of civil judgment in their name. Most landlords are familiar with debt and paying overdue bills but may not know much about the impact of a judgment, lawsuit or lien.

Civil judgments are official legal pronouncement that paves the way for one party to recover funds from the delinquent party. Judgments, lawsuits or liens are among the most serious of financial challenges, and they have a serious and lasting impact on a credit report. Examples of the causes of a judgment or lien include large medical bills, unpaid taxes or unpaid rent/eviction.

In July of 2017, many judgments and liens were removed from credit reports. This was part of an initiative by the credit bureaus to not penalize people with medical debts and other various outstanding debts. You can read about that initiative here.

When the judgment is paid off, the organization is supposed to submit documentation to the credit bureaus that the debt has been satisfied.

However, if they don’t, the judgment would remain on the applicant’s credit history. This information remains there for up to ten years, as opposed to seven years for a typical credit item.

When considering civil judgments as part of an applicant’s credit history, many landlords take certain things into consideration. For example, if the judgment was seven to ten years ago and the applicant has shown fiscal responsibility since then, the landlord may feel that is acceptable.

As part of a landlord’s credit screening criteria, they should decide whether any judgments will be allowed for approval and if so, what the circumstances are for the criteria. Again, landlords must apply the criteria to every applicant equally, not selectively.

Public Records Criteria

As part of the screening process, a landlord may use an applicant’s criminal record to evaluate their potential as a tenant. When landlords use a criminal record to accept or reject applicants, there are certain steps they must follow to avoid being accused of discrimination.

When reviewing an applicant’s criminal record, there are several things landlords need to consider. Examples include what the offense was and how serious. Other factors include how recent the incident was and whether they were convicted.

Landlords should evaluate how many offenses there were and whether they were clustered around a certain time or spread out over many years. Finally, landlords should consider whether the offense would potentially put other residents at risk or negatively influence the applicant’s ability to pay rent. Many states are passing laws that prohibit landlords from denying an applicant based solely on criminal history alone.

Landlords can only reject applicants with specific criminal offenses that could jeopardize other tenants or the rental property. Even though the Federal Fair Housing Act doesn’t explicitly include people with criminal records, it issued strong guidelines on what landlords can and cannot do with criminal histories to avoid discriminating against minorities (statistically higher percentage of the population with criminal records).

Among the most common crimes that landlords are legally able to deny an applicant include murder, kidnapping, theft, assault, robbery, sexual offenses, arson, drug-related offenses and similar crimes that might affect people or property.

With a comprehensive list of specific offenses in their selection criteria, landlords can comply with fair housing guidelines while keeping other residents and their rental property safe.

For even more tips on tenant screening, check out this video:

Stay Compliant with The Law

Tenant screening is subject to numerous federal, state and municipal laws. Landlords can ensure they are compliant by learning everything they can about the laws that apply to their business and their properties.

Establishing a fair list of criteria is an excellent way for landlords to find the right tenants for their rental units, but if they don’t follow the established rules and regulations, they can find themselves in a lot of legal trouble.

Landlords should always consult with their attorney to ensure their screening and selection process is legal, fair and effective. With the right tenant screening process, landlords will be able to identify the best applicants and offer them a lease agreement.

The post How to Create an Ironclad Tenant Selection Criteria appeared first on RentPrep.

There are times when a landlord tends not to have sympathy for the tenant who uses ignorance as an excuse. The same is true for a judge when a landlord says they weren’t aware of tenant screening laws.

It only takes one bad experience with a problematic renter for landlords to look into tenant screening laws. One innocent mistake where tenant screening laws are ignored can cost tens of thousands of dollars in fines and legal fees. That’s why it’s imperative to take the time to read this page in its entirety. One ounce of prevention could be worth $10,000 of cure.

We’ll educate you on exactly what you need to know so you’re within your legal rights when screening tenant applicants.

What Are Tenant Screening Laws?

Landlord-tenant laws and regulations govern the business dealings and interactions between landlords and tenants. There are laws that regulate everything from keeping a property habitable to the steps needed to evict a tenant.

The tenant screening process is no exception. The laws are in place to protect both landlords and applicants during the fact-finding part of identifying the applicants with the most potential to meet the rental standards you’ve set for your property.

Landlords need to understand the laws regulating the process so they can stay compliant. Even if you didn’t discriminate intentionally, you are still subject to the laws. Federal and state laws can differ, and it’s crucial you understand both.

Understanding Federal Fair Housing Laws

The vast majority of landlords are governed by the laws of the FHA. There are some exemptions, but it’s best that you follow these laws regardless of your situation —you and many other landlords in the United States of America are subject to the Fair Housing Act of 1968.

This comprehensive federal legal protection covers rights and protections for applicants and tenants to ensure they get fair consideration. The Department of Housing and Urban Development, or HUD, administers and enforces the Fair Housing Act.

The seven protected classes listed in the Fair Housing Act are:

1. Race
2. Color
3. Religion
4. National Origin/Ethnic Background
5. Gender
6. Familial Status
7. Mental/Physical Disability

Unfortunately, thousands of fair housing claims center on the application and screening process. Landlords may show a preference for a particular type of applicant and put others at a disadvantage.

Another example is when landlords set different terms for one applicant over another. When some landlords have stricter standards for certain applicants than others, it can get them into trouble with the law.

The Fair Housing Act applies to millions of properties across the country with few exceptions. But, how can you find out whether or not the Fair Housing Act applies to your rental properties and your tenant screening practices?

One notable exception to federal fair housing laws includes buildings with fewer than five units where one is occupied by the property owner. This is known as the “Mrs. Murphy” exemption and is covered later in this guide.

Other exemptions include religious organizations, private clubs, senior housing and single-family homes where a broker is not involved in the sale or rental. However, even if your property is exempt from the Fair Housing Act, many state and municipal fair housing laws may apply to your property.

If you want to manage your rental property business successfully, you need to understand and be compliant with the federal fair housing laws, especially as they apply to tenant screening.

The law states that landlords cannot discriminate against an applicant in a protected class. In other words, the Fair Housing Act prohibits landlords from gathering and using certain information as a basis for selecting a tenant.

What Is The Mrs. Murphy Exemption?

We hear this from landlords many times as an excuse to discriminate in their screening practices because they are in an owner-occupied rental. “Mrs. Murphy” is not a real person, but a hypothetical character. She is painted as an elderly landlord that lives in an owner-occupied rental.

The FHA exemption states that if a dwelling has four or fewer rental units and the owner lives in one of those units, that home is exempt from the FHA. This is not true in every state, and state laws take precedence over national laws.

For detailed information on your state, you can visit this resource from foxrothschild.com.

Can Landlords Discriminate Against Felons?

One area of tenant screening law that is confusing to many landlords centers on the applicant’s criminal background check. The Fair Housing Act doesn’t include criminal history as a protected class, and therefore applicants with such a background are not safe from discrimination.

However, HUD recognizes the growing discriminatory practices of landlords making decisions based on an applicant’s criminal background. The US makes up about 4% of the world’s population, but around 22% of the world’s prisoners. This is according to Wikipedia as of October 2013.

Disparate impact refers to practices in employment, housing, and other areas that adversely affect one group of people of a protected characteristic more than another, even though rules applied by employers or landlords are formally neutral (source Wikipedia).

HUD has enacted new guidelines in 2016 to help landlords navigate this tricky area and stop them from issuing blanket policies about a criminal record. Landlords may be breaking the law when they refuse to rent to applicants with criminal records.

HUD Criminal History Criteria

To determine whether or not a landlord’s criminal history policy is discriminatory, HUD looks at several different criteria:

• Does the landlord’s criminal history policy have a discriminatory effect?
• Is the landlord using the same criminal history criteria for every applicant?
• Has the landlord made exceptions for some tenants with a criminal history?
• Does the criminal history policy legitimately protect other tenants and the property?
• Does the landlord include specific examples of criminal behavior that threatens safety and not just rely on blanket statements about arrests and convictions?
• Does the criminal history policy make a distinction between arrests versus convictions?
• Has the landlord included specific requirements for the type of crime, history of criminal activity, how long since the criminal activity and evidence of rehabilitation efforts?

Understand The Right To Deny An Applicant

Landlords have the right to deny an application based on a person’s criminal history, in accordance with federal law. Many of the guidelines support landlords in refusing to rent to those with specific criminal backgrounds such as drug manufacturing and dealing, sex crimes and violent crimes.

This way, landlords can rely on their comprehensive rental policies that deny housing to applicants with these specific criminal convictions to keep other tenants and their property safe and secure.

Of course, different states and municipalities may have more strict laws in place concerning discrimination against those with a criminal background. The bottom line for you and your rental property business with regard to tenant screening laws and criminal history is just a person’s arrest record is no longer a valid reason to deny an applicant.

You are not allowed to include a blanket statement that all applicants with a criminal history will be denied. HUD wants to work with landlords to ensure that they are able to prove why they deny an applicant based on criminal convictions (drugs, sex crimes, etc.) for safety and security reasons.

Landlords: Are You Breaking The Law When Screening Applicants?

When discovering what constitutes discriminatory behavior during tenant screening, landlords, owners and property managers often don’t know or don’t care about the laws that regulate the process.

Some landlords who discriminate have aggressive political or social agendas and willfully deny housing to qualified applicants. While this does happen, there are also thousands of cases where landlords are just not aware of the federal, state and municipal tenant screening laws.

Top Ways Landlords Break The Law Tenant Screening

Here are some examples of how landlords break the law during the tenant screening process, whether willfully or inadvertently:

• Holding some applicants to stricter standards than others, such as a higher credit score for single mothers.
• Asking questions that allude to an applicant’s marital status or familial status, such as whether their kids are excited about the upcoming holidays.
• Querying what an applicant’s first language is.
• Including discriminatory questions on the rental application.
• Asking an applicant’s references about their background, such as what country they came from.
• Trying to guess the ethnicity of an applicant.
• Asking in what country an applicant was born.
• Advertising for a specific type of applicant or against others, such as saying that the property is in a good Christian community or it’s for single people only.
• Refusing a service dog because of your no pets policy.
• Discreetly asking an applicant about their sexuality.
• Asking for a higher security deposit from applicants with kids.

Even if you don’t ask questions of the applicant directly, you can still get into trouble if your rental application form includes certain types of questions. You must ensure that your rental application form in no way includes questions about things like a person’s disabilities, marital status or race.

A rental application should only ask for information on things like bankruptcies, prior evictions, work status, references and similar issues that reflect whether or not they would be a good tenant and able to pay the rent on time and in full.

How To Create A Rental Policy For Fair Tenant Screening

The best way for you to stay compliant with the Federal Fair Housing Act when it comes to tenant screening is to create a written rental policy.

This document outlines the acceptable criteria that are necessary for any landlord to approve an applicant for their rental property. Landlords must treat every applicant exactly the same way and apply the criteria to everyone equally. You can use your tenant screening criteria as the legal standard for selecting your next tenant.

FCRA Laws For Tenant Screening

The provisions outlined by the Fair Credit Reporting Act, also known as FCRA, protect every consumer’s information and ensure as much accuracy as possible. Doing a background check on someone reveals all kinds of information about their consumer habits and life skills and experiences.

It helps lenders, employers and landlords determine if the applicant is going to be able to fulfill the requirements of the loan, job or rental agreement. People or companies are only allowed to access this information when they have a permissible purpose. The report can only be used for the stated purpose, which is to qualify for renting a unit, and for nothing else.

Compliance Steps Outlined By The FCRA

When landlords use background checks that include credit reports to assess rental property applicants, they must follow the laws that regulate use as well as reporting information. When a landlord is using a consumer report to make a decision about an applicant, there are several essential compliance steps outlined by the FCRA.

Collect Rental Application

Landlords need to start the process by collecting a completed rental application form from the applicant. This document is the starting point for running a background check and provides the landlord with vital information like a Social Security number, full name, birthday and more.

A completed rental application shows that the person is interested in becoming a tenant and provides the landlord with a reason to start a background check.

Verify an Applicant’s Signature

The FCRA is extremely protective of every consumer’s information, therefore not just anyone has access to the report. A landlord must obtain written permission from the applicant to show that they are allowing their background information to be shared.

Most landlords and property management companies include a signature line on the rental application that grants permission for them to move forward.

Complete a Credit Access Application

Landlords, investment property owners, and property managers are approved by the FCRA to legally access an applicant’s credit report as long as they have consent. However, they must complete a credit access application that establishes their legitimacy.

The application generally requires a signed rental application and sometimes a copy of a business license or property management agreement. If landlords use a credit reporting agency, this step is often part of opening an account with them.

Adverse Action Notice, If Applicable

If the landlord makes a decision that is not favorable toward the applicant based on information found in the consumer report, it is an adverse action. Adverse action includes requiring a co-signer, requiring a larger deposit, raising the rent or outright denying the application.

If any action is taken, the landlord must provide the applicant with an adverse action notice. This is written documentation of what the landlord is doing and why.

Landlords must provide information about the consumer reporting company that created the report and the applicant’s right to dispute any information on the report, among other things.

We recommend using a generic adverse action letter because you’re not required to give specific details of why you denied the applicant. Less is more when it comes to issuing adverse action to a denied applicant.

Properly Dispose of a Consumer Report

The FCRA requires anyone that has requested a consumer report to securely dispose of the information when they are finished. For paper reports, shredding or burning is sufficient.

Electronic reports must be deleted and not stored on any backups. At RentPrep we store all reports digitally and handle all compliance. If you were to print your screen to keep a copy of the report, you are opening yourself up to unnecessary issues. Some landlords like to have a hard copy of the report, but we strongly urge against this.

Landlords can also choose to report information to a reporting agency under the FCRA Furnisher Rule. However, they are not under any obligation to do so. Your responsibilities as a furnisher are clearly spelled out. They include working to ensure the accuracy of the information you are providing. The most common thing that landlords do as furnishers are to report delinquent accounts.

You must provide accurate information and include the month and the year of the delinquency. There are other rules regarding what happens if the consumer disputes the information landlords provide. In that case, you take an active role in the investigation.

Federal Vs. State Tenant Screening Laws

The federal fair housing laws confer many rights onto renters that belong to one or more protected classes. Many state and municipal laws go beyond the federal fair housing laws to confer additional rights to applicants.

Every state has fair housing laws that either meet or exceed the federal standards set by the Fair Housing Act. It is up to you to know about your own state and municipality when it comes to tenant screening laws. State laws typically oversee that of the FHA. Usually, this means additional regulations or restrictions placed on the landlord.

The protected classes under federal law include race, religion, sex, color, national origin, familial status and mental/physical disability. State laws must consist of these protected classes, but they can add additional protections to specific groups.

Most Common State & Municipal Protections

• Age
• Sexual orientation
• Gender identity and expression
• Citizenship
• Veteran status
• Source of income
• Medical condition

Just as with federal fair housing laws, there are properties that don’t qualify for state fair housing laws as well. As a landlord, you need to also look at additional tenant screening laws and discrimination laws on the county or city level.

In many areas, counties, cities, and municipalities also have tenant screening and rental discrimination laws that cover additional protected classes beyond what the federal and state law cover. To do more research on the laws and regulations of your state, you can follow links from this HUD website.

How To Find Landlord-Tenant Laws

You can also enter your state and the words “fair housing” into a search engine to find websites that provide details on your state laws. For example, a landlord in Oregon would simply type “Oregon fair housing” to find links to state government websites that outline the laws and regulations.

Don’t Break The Law

You heard that right! In reference to HUD guidelines, a violation of the fair housing laws can cost a landlord more than $20,000 upon a civil conviction in federal court. Of course, higher penalties can accrue over a longer period the more a landlord fails to comply. Keep in mind, a landlord will be at risk for civil lawsuits from tenants whom have felt discriminated against.

We advise consulting with an attorney who can further advise you on how to follow the rules and regulations when it comes to complying to federal and state laws.

The post Understanding Tenant Screening Laws – The Landlord’s Guide appeared first on RentPrep.

For right now, we’ll start off with a brief one-page checklist for screening a tenant. It’s handy to have a one-pager to gain the bird’s eye view of where we’re headed.

Click Here To Download Our Tenant Screening Checklist [PDF]

The bulleted items below are a clickable list that serves as a table of contents and a guide for this tenant screening checklist. We cover each of these items thoroughly throughout the guide, but we will touch on each subject briefly below. You can click any item in the list above to be taken down the page to that topic.

Tenant Screening Checklist Items:

1. Create Tenant Screening Criteria
2. Advertise Rental
3. Pre-Screen Interested Renters
4. Show Your Rental
5. Collect Rental Applications
6. Run Background Check
7. Verify Applicant Details
8. Select Tenant
9. Issue Adverse Action
10. Set Up New Tenant

Using a tenant screening checklist is essential for landlords when looking for prospective tenants, enabling them to make informed decisions based on things such as rental history, creditworthiness, and references. A tenant screening checklist not only streamlines the tenant selection process, but also enhances the likelihood of securing reliable and responsible tenants for the property.

1. Create Rental Tenant Screening Criteria

As you may or may not know, establishing tenant screening criteria is not a fun step. By establishing tenant screening criteria, you’re going to create a go-to guide to review tenant applications with ease. Using criteria, you’ll be able to point to the specific reason they were denied if need be.

Keep in mind, it’s also essential for landlords to avoid potential legal issues in the process because you have the beginning documentation of what seems to be a standard procedure when choosing your tenants.

2. Advertise Rental

If you don’t properly advertise, it may be difficult to get down to the nitty-gritty of well-qualified applicants. If you’re choosing from a pool of at least 10 qualified applicants then you’re increasing your chances of finding the right tenant.

The more places you advertise, the more opportunity to find more tenants. Take the time to read and learn how to advertise your rental the right way.

3. Set Up A Call

Pre-screening renters are one of those “one step back, two steps forward” scenarios. It’s a time-saving hack that any landlord would appreciate.

You don’t want to waste your time showing your rental to every person who expresses interest. In the pre-screening phase, you’ll weed out the tire kickers who don’t meet your minimum criteria. So, setting up a call is a perfect way to do so.

And, sure, if it seems like a good fit, go ahead and move into setting up a rental showing appointment.

4. Show Rental

When you’re showing the rental, there are a few directions you can go. You can decide to do an open house, a block of appointments, or individual showings.

Here’s how to safely show the rental, spot signs of a troublesome renter and how to decrease no-shows.

Our Landlord Facebook community also has tips on showing your rental.

Join the RentPrep For Landlords Facebook Group here.

5. Collect Rental Applications

Rental applications are a crucial part of the tenant screening process. To make things easier and to provide you with a solid base, here is a rental application that will allow you to gather most of the necessary details to screen your tenants.

6. Run Background Check

A large percentage of our clients come to RentPrep because they’ve just been in a bad situation with a renter whether it was non-payment, an eviction, or more. Professional tenants understand the game and how to play it.

Running a background check is your opportunity to discover the superhero renter in a crowd of applicants. Below, you’ll learn about what data is involved with a background check. We will cover in detail precisely what you need to know and consider when reading a rental background check.

7. Verify Applicant Details

Sometimes, you don’t want to just rely on the background check for grading a tenant.

Verifying details such as the current and previous landlord and especially their employment are details you may not want to look beyond. At RentPrep, we’ve made over 60,000+ verification calls. For a quick overview of how to make a rental verification call, check out this video.

8. Select Tenant

This one is the fun part of the process. You’ve done your due diligence and you believe you have a great tenant lined up for your property. Now it’s time to get your new tenant set up and moved in!

9. Issue Adverse Action

You want to make sure you properly deny the applicants you did not choose. You deny an applicant by issuing adverse action. This is a formal way of denying the applicant and is required by law.

10. Set Up New Tenant

It’s time! Let’s set up that tenant in your rental. Although it’s a process in itself to properly place and set up a new tenant, we’ll show you exactly what you need to do.

The post The Ultimate Tenant Screening Checklist [Free Download] appeared first on RentPrep.

Additionally, we address the practice of calling previous landlords for tenant references, highlighting more reliable methods for tenant screening. Lastly, get tips on maximizing central air efficiency during the summer, from simple measures like blackout curtains to more involved solutions like improved insulation.

Join us for practical advice to help landlords keep their properties in top shape and make informed decisions during tenant screening.

Show transcription:

Andrew Shultz (00:00):

Hey everyone. Welcome back to another episode of the Rent Prep for Landlords podcast. This is episode number 431 and I’m your host, Andrew Schultz. On today’s episode, we’re gonna be talking about supplying AC filters for your rentals. Who to call for references when screening new tenants and tips for maximizing your central air during the summer heat? We’ll get to all that right after this.

Voice Over (00:26):

Welcome to the Rent Prep for Landlords podcast. Now your host, Andrew Schultz,

Andrew Shultz (00:31):

The Rent Prep for Landlords Facebook group is over 14,000 members. Our group members get access to our Sherwin Williams and PPG paint Discount programs can ask questions in our monthly AMA sessions and much more. So if you have a question or a situation that you’ve never encountered before or you just need to bounce an idea off a huge group of housing providers, this is the place. If you haven’t checked it out yet, do it today over at facebook.com/groups/rent prep. Don’t forget to mention the podcast when answering the questions so we know how you found us.

Voice Over (01:02):

Water cooler wisdom expert advice from real estate pros.

Andrew Shultz (01:10):

Alright, we’re gonna get things started today with our water cooler wisdom segment. All of our segments this week actually come to us via the Rent Prep for Landlords Facebook group. Don’t forget to check that out if you’re not already a member. Let’s go ahead and jump right in here. Do you all supply the AC filters in your rentals? How do you ensure that they’re being changed out? The poster actually provided a photo of a very, very nasty filter that they had to swap out for their tenant. This is the condition that my AC guy found the current vent in the tenant said that he just threw it out yesterday and that their cleaning lady cleans the vent. I sure can’t tell. And again, this one comes to us via the rent prep for landlord’s Facebook group. There are a few different stances that you can take on this.

Andrew Shultz (01:51):

Some property owners do absolutely zero preventative maintenance on their HVAC systems. Some will service them once a year and some will service them multiple times a year and change filters on a regular basis. Personally, I think that never servicing the HVAC carries some risk with it. The main risk is likely that of accelerated deterioration of the HVAC unit itself. If you never clean it, it’s not going to last as long or work as well as a unit that’s regularly cleaned and maintained. And beyond that risk, a broken HVAC unit can still run and can absolutely kill your tenant if you find out that it’s malfunctioning. We send an HVAC technician out once a year to service all of our HVAC systems. Typically just the heat as the bulk of our homes did not have central air conditioning, but in the homes that do have central air conditioning, we service the HVAC systems at least twice per year.

Andrew Shultz (02:39):

This involves going through the furnace, cleaning it, checking to ensure that it’s operating correctly, ensuring the flame sensors and thermocouples are working as they should and most critically checking the heat exchanger for cracks. A cracked heat exchanger can dump carbon monoxide into the air that’s being pushed out through the ducts and into the home. Obviously, this is a bad thing. No one wants to find out that someone died because of a cracked heat exchanger. And believe it or not, this is not an altogether uncommon occurrence when doing our preheating season services. For the past two years, our HVAC technician found a cracked heat exchanger that could have seriously injured or killed one of our tenants. Fortunately, these were found before we got into heating seasons. We were able to swap those furnaces without it becoming a much larger issue. And this brings me to my next point.

Andrew Shultz (03:25):

When we service the HVAC, we also conduct our smoke and CO detector checks at the same time. We place smoke detectors inside every bedroom as well as a smoke and a CO detector within 10 feet of the outside of the bedroom doors. Every smoke and CO detector is checked to ensure that it’s working as it should. And if it isn’t a 10-year sealed battery unit, we swap the batteries out at the same time. If there are any units that are missing, we go ahead and replace them at the same time and we also build a tenant for those as we typically have photos of those units being installed at the time of move-in. I personally prefer separate smoke and CO detector units in the properties that we manage. CO is slightly lighter than air, which means that in theory it should rise above air and be detected at or near the ceiling level.

Andrew Shultz (04:10):

But more realistically, CO often mixes with the room air. So depending on where your vents are, either floor or ceiling, you may wanna alter your placement of the CO detector to either lower or higher on the wall. We typically mount a couple of feet up from the floor when we have floor vents and a couple of feet down from the ceiling when we have ceiling vents. And as always they come with a manual which will specify what the manufacturer recommends. At a minimum you should have at least one CO and one smoke detector per level of the home and code often dictates that more than that are required. Now jumping back to filters. There are some that prefer to change out the filter every month and depending on your environment that could be necessary or that may be overkill. If you’re in a dusty environment or you have really bad airborne allergies, monthly changes may be warranted.

Andrew Shultz (04:59):

At home, I typically change the filter, in monthly in theory, but realistically and more accurately, it’s probably closer to every two months that I remember that the filter needs to be swapped out. And then we service our unit twice a year the HVAC and the Central Air at least twice a year. There are also some companies out there now that will ship the correct size filter to the home directly at an interval that you specify. So if you want them changed monthly for instance, you can have them sent monthly and ask the tenant to handle swapping the filters out. Usually, if you’re going to have a tenant handle it, it’s a good idea to have them send a before and after photo so that you can see that the filter was actually swapped out. Some property managers will build filter delivery into a resident benefits package, but that’s another topic for another day.

Andrew Shultz (05:44):

Moving right along, we’re gonna jump into our second water cooler wisdom segment. This one also comes to us via the rent prep for landlords Facebook group. Let’s go ahead and dive in. I’ve been in the rental business for over 20 years and in that time I’ve had two, two landlords call me for references. When I call current landlords, they’re often very surprised and sometimes they’re hesitant to talk. I was just wondering how many of you call landlords and do you call any references other than landlords such as employers? And again, this one comes to us via the Rent Prep for Landlords Facebook group. We’ve stopped doing verbal landlord references and haven’t done them for a couple of years. Now some people will say that’s insane and that we aren’t acting in the best interest of our clients. But from a data-driven standpoint, I can tell you that it’s made almost zero difference in our screening.

Andrew Shultz (06:34):

Why and how – I’ll get to that in just a second. Before we jump in, keep in mind that you need a signed release from your applicant before you go calling references and requesting information. Usually, this is included in your rental application and they sign off giving you the authorization to do the checks when they turn in their application, but double check your forms to be sure that that’s in there. Alright, let’s get into it. The number of times that I’ve been called for a landlord reference in the past 15 years is probably about 15 times. Alright, I’ll say twice a year. So let’s say 30 times. I did some research recently and we’ve placed over a thousand tenants over the years and we’ve screened a lot more than that. So 30 landlord reference requests over say a thousand applications? That math really doesn’t math very well. We need to talk about subjective versus objective data first.

Andrew Shultz (07:24):

When you call a landlord reference, you get both types of data. Objectively there are several questions that you can ask. What were the dates that they lived in the unit? What was the rent? Did they pay their rent on time? Were they ever late? These are questions that have objective data that leads to the answer. Subjective questions on the other hand are a little trickier. Examples of subjective questions would be things like, did the tenant keep the apartment clean? Well, your idea of clean versus my idea of clean versus the tenant’s idea of clean are all going to be very, very different answers. Another good example is were they a good tenant? Again, you may have a lot more or a lot less tolerance for tenants than the landlord that you’re interviewing. So they may think that the tenant was horrible because of something that wouldn’t even register as a concern in your mind.

Andrew Shultz (08:13):

I had a landlord once tell me that they hated the tenant and couldn’t wait for them to leave because they didn’t take out the recycling bin every week, but only when it needed to go out. I asked if it was attracting bugs or rodents or anything like that and they said no, it just wasn’t getting emptied enough. That landlord is applying their personal standard to the tenant and that tenant was probably never going to be good enough for that landlord. So subjective questions can provide insight, but the accuracy can’t always be vetted or verified. Something else to consider when calling landlord references is that they may overshare. So for instance, if you live in an area with sealed eviction records and you call a landlord that says that they just evicted that tenant or they were in the process of evicting that tenant when they left, you may now be in violation of some regulation simply for making a phone call.

Andrew Shultz (09:01):

Even if you didn’t ask for the information. If you’re going to call landlord references, I recommend doing everything you can to verify that you’re actually talking to the landlord, check the tax records for the property, run reverse searches or Google searches on the telephone number. Google the address to see if any names pop up, et cetera, and call more than just the current landlord. I would recommend calling at least the current and the former landlord. The current landlord may be willing to lie just to get rid of a bad tenant or lie to try to keep a good tenant, but a former landlord will be more likely to answer your questions and be more forthright with their answers. Alright, so what was our alternative? We can’t just ignore an applicant’s past residences when we’re screening. So what do we do? We have a couple methods that we use to subjectively verify if a tenant is paying rent or not.

Andrew Shultz (09:50):

First, we require a verifiable residence history dating back two years as part of our application process. We check their ID and compare that to the source of income documentation to see if the addresses match. We can combine that with the address from their credit and background check or even a utility or credit card bill to at least prove that someone is likely living at a particular address. Now, we also require the applicant to submit proof of rent payment for the past 12 months. Usually this comes in the form of bank statements or canceled checks or if they’re paying online, we’ll typically accept a copy of their rental ledger provided by their current landlord. In some situations, it’s difficult to show rent payments such as if the applicant is paying their landlord cash and not getting receipts or living with a friend or a family member.

Andrew Shultz (10:37):

We do have a form that the applicant can provide to their landlord that asks only subjective questions about the tenancy. That form has to be signed in the presence of a notary and we compare that to the tax record to see who owns the property. If things don’t match up, we basically treat the form as a fake and then end up denying the application more often than not. This does get a little bit hairy when a landlord is signing on behalf of an LLC, but it’s also sort of the last resort to get someone’s address and rental history verified. One thing that we won’t accept is handwritten receipts unless the proof of payment accompanies it. So something like a canceled check or a money order receipt. Anyone can walk into an Office Depot and buy a receipt book and fake out some receipts. So we really won’t just accept a handwritten receipt unless there’s something to back it up.

Andrew Shultz (11:23):

So what are we missing by doing it this way? Well, we’re not hearing that the tenants trash the apartment on the way out or snuck a pet in or a lot of those other things that can really become a problem for a new landlord. This can be mitigated with a visit to their current home to see how they keep it. We’re not doing that currently and I don’t know many landlords or property managers that do. So there is some risk there, but typically we’re already seeing other red flags well before we would ever get to that stage of the game. So is this a foolproof method? No, and I’m not gonna claim that it is, but there’s no method that’s out there today that is truly foolproof. People can fake just about anything that they want to in 2024 and using the method that we are using currently combined with our other selection criteria, has done a pretty good job of keeping our clients’ properties safe. Our eviction rates are still very low across all of our portfolios and overall, this is what works for us.

Voice Over (12:21):

Forum Quorum where we scour the internet for ridiculous posts from landlords and tenants.

Andrew Shultz (12:29):

We’re gonna finish off this episode with our forum quorum segment. Let’s go ahead and dive right in here. My tenants have complained that the house gets excessively warm during the summer. Mind you we’re in Texas and we have a hundred-degree summers. They also think that if they put the thermostat at 60 or 70, the inside of the house will be that same temperature. That definitely won’t happen, especially being an older home. I have regular maintenance on it every season as I should. They’re asking if I can add more insulation, but that’s extremely expensive. What tips do you have? And this one comes to us via the Rent Prep for Landlords Facebook group. Texas heat sounds honestly absolutely brutal. I’m recording this in mid-May and it’s about 67 degrees here today in Buffalo. I can’t imagine it being over a hundred degrees outside already. We see maybe a couple days over 90 here in Buffalo every summer, and I don’t think that I would be able to survive the south anything further south in Virginia and I think I would just be sweating to death.

Andrew Shultz (13:27):

So all that being said, central air systems are great, but they are only going to be so effective when it gets to be that level of hot. Most central air systems will only handle a temperature spread of about 20 degrees. So if you have the central air blasting and it’s a hundred degrees outside, you’re probably only getting the home down to about 80 degrees. Setting the thermostat to 65 or 70 will cause the AC to run continuously, which can also cause damage over time. There are a few things that you can look into with regards to your central air to try to maximize the cooling, but every unit will eventually hit the capacity of what it can do. First, double check to ensure that your central air unit is actually sized correctly for the amount of space that you’re trying to cool. An undersized unit is going to underperform obviously, and you aren’t going to get the cooling that you want out of it, but an oversized unit can also be an issue.

Andrew Shultz (14:19):

One of the main features of air conditioning is that it reduces the humidity in the home. So if it’s only running for a short amount of time because it’s oversized, it’s not going to have the time to pull all the humidity out of the air, which is going to lead to the home feeling cool, but also damp and HVAC technician can run a cooling load calculation to tell you what size AC you should have for the property. If you’re undersized or oversized, it may be time for a replacement. I’d recommend having the unit checked over by an HVAC technician as a first step. If you’re having issues with performance, the technician should be able to check your coolant levels as well to determine if you may have a leak somewhere in the system. Coolant is a closed system, so you shouldn’t be losing coolant unless you have a leak somewhere in your system, and if you’re seeing ice buildup on your coolant lines or on your coils, this is a really, really good indicator that you may not have enough coolant in your system for it to operate properly.

Andrew Shultz (15:13):

You or your technician should also check any filters in the system to ensure that they are clean. Dirty filters will slow down the flow of air through the system, which can lead to less cool air being pushed out through the vents. We’re going to run through a few other things that you can do to help your AC performance. We’ll run these from least to most expensive so that you can kind of work on saving some funds along the way. First, I would recommend that either you or the tenants install some sort of a curtain to help reduce the heat finding its way into the home. Understand that curtains are only going to be able to do so much once the heat passes through the window, it’s in the home. Blackout curtains will typically have a white layer on the outside, which can help to either reflect the heat back out the window or at least hold the heat closer to the window and prevent it from getting into the main portion of the home.

Andrew Shultz (16:00):

We’ve also seen sheets of Mylar or other reflective material cut and placed over the window to try and reduce the heat finding its way into the home. That’s a bit more extreme and a lot less visually appealing, but if it works, it works. If you have large windows, you may find that applying a low E film to the window can help reduce the heat getting into the home as well. This is going to be more expensive than blackout curtains or Mylar sheeting, but it’s much more aesthetically pleasing. The next thing you’ll wanna look at is sealing the home envelope to prevent heat from coming in, as well as prevent cool air from escaping. Most older homes especially do not have an energy-efficient envelope, so anything that you can do to seal gaps will help in this regard. Some cans of great stuff and some tubes of caulk can go a long way in sealing things up around the home.

Andrew Shultz (16:48):

You may wanna consider renting a thermal imaging camera from Lowe’s or Home Depot to see where you’re losing your cool air from. This can help determine whether you are sealing the areas where you’re losing the most heat from or the most conditioned air from, and it’s a good first step to figure out where you need to apply your insulation and things of that nature first. This is a lot more effective during the winter months when you have a cold background as the heat losses will show up much better on a cold background. Moving on to more expensive options. If you have bad windows that don’t seal well, it may be time to start considering them for replacement. If budget’s a concern and budget is always a concern, start with the windows that you see the most sunshine on and work from there. So if you have a big window or several smaller windows and they’re getting slammed with sun all day, those are the windows that you’re going to want to start with.

Andrew Shultz (17:40):

There are a ton of options out there for windows, and I’m not gonna get into all the ins and outs of it, but look for something that has the low E film on it as well as something that is multiple panes of glass and has the argon gas in between the panes to help limit the heat transfer. Good windows can reduce your heating and cooling costs substantially, but good windows can also cost a small fortune depending on how many you have to do and how big they are. While you’re looking at your windows, look at your doors as well. Make sure that you have good window and door seals wherever possible. This is actually one of the cheaper things that you can do to help conserve energy and it makes sense to look at this as an option obviously, before you start thinking about swapping out your windows and doors.

Andrew Shultz (18:20):

Insulation is another option that can help you reduce your condition to air loss. Whether you’re trying to keep cool air in during the summer or warm air in during the winter, insulation will go a long way to help you reach that goal. Again, there are several types of insulation out there, and I’m not gonna go into all the ins and outs, but adding insulation can help a lot. This is another situation where if you choose to DIY it, you may wanna consider getting a thermal imaging camera to see where you’re losing the most conditioned air from so that you can address those areas first.

Andrew Shultz (18:53):

Hey, rent preppers. If you haven’t had a chance to check out our blog lately, we just released an in-depth guide on how to build business credit for your next real estate venture. Check that out today over at rentprep.com slash blog. That pretty much wraps up this episode of the Rent Prep for Landlords podcast. Thank you all so much for listening. Our goal with the podcast is to help as many people as possible make educated decisions when it comes to real estate, and you can help us reach our goal. If you heard anything in this week’s episode or any other episode that will help someone that you know, please do us a favor and share it with them. If you’re looking to get in contact with me, I can be reached over at whatsdrewupto.com. From there, you’ll find links to everything going on with me over at Own Buffalo, as well as other projects that we’re working on.

Andrew Shultz (19:37):

You can also grab a copy of our free deal analysis tool today over at whatsdrewupto.com. There’s no obligation and it comes with a companion video showing you how to use it. If you’re looking for top tier tenant screening services, head on over to Rent Prep.com. There are multiple products to choose from, including tenant paid options, and if you’re over 50 doors, ask about the enterprise level programs and pricing. I’ve been an enterprise user at Rent Prep for over a decade now, and it’s definitely changed the way that we screen our tenants. Again, you can check that out today over at rentprep.com. Again, thank you all so much for listening. We’ll be back in two weeks with an all new episode that you won’t want to miss. Until then, I’m Andrew Schultz with own buffalo.com for Rent Prep.com, and we’ll talk to you soon.

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The post Should You Provide AC Filters? (Podcast #431) appeared first on RentPrep.