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The Pilera Blog

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Screening Your Potential Tenants

Screening Your Potential Tenants

Pilera Tenant ScreeningThe vast majority of your tenant relationships will be respectful ones with few bumps along the way. But if you aren’t careful, you’ll likely have one or two difficult relationships that will end up filling the majority of your time. To keep destructive tenant relationships out of your property so you can use your time to focus on more important things, tenant screening is of utmost importance. We’ve compiled a few screening and decision-making tips to help you.

Before inviting a potential tenant to look at your property, ask a few questions over the phone to save everyone some time. These questions should be your deal breaker questions and could include questions about pets, smoking, and salary. If the potential tenant’s answers don’t fit your policy, like if they own an exotic pet, you don’t have to waste your time and theirs by showing the property.

If the potential tenant passes the pre-qualifying test, invite them to see the property. During this interaction, make sure your personalities mesh well. But whether they do or not, offer the same application to everyone who sees the property so you aren’t accused of discrimination. The rental application should ask for name, contact information, Social Security number, bank information, employment information, and landlord and personal references. It should also include the address of the property to be rented and its monthly rent. Make sure the application asked for permission to perform a background check.

Once you have the application, first check the person’s rental history. It is a good idea to call that person’s previous landlord rather than his or her current landlord who might be motivated to get rid of an unfavorable tenant. Next, contact the potential renter’s employer. Finally, run a credit report, keeping an eye out for eviction history or a pattern of late bill payment.

After you’ve gathered all of your information, run it through an established scoring system that assigns points based on salary information, references, and credit score. The person with the most number of points gets the apartment. Choosing tenants this way ensures that you’re not acting with bias of any kind and will protect you if you’re accused of discrimination.

Of course there are always surprises when dealing with tenants, but having a clear-cut method of screening tenants should go a long way toward helping you rent to responsible people with whom you can have friendly relationships.

 
This comment was minimized by the moderator on the site

"The person with the most number of points gets the apartment." Uh, what? That's a poor policy that will get you into trouble. First come, first served.

  Amy Williams
This comment was minimized by the moderator on the site

Even if you are screening everyone with the same criteria, it could be argued that the basis of the screening itself is discriminatory, whether you intend to discriminate or not. I have read that in some states it is being debated about whether using credit and criminal backgrounds for applying for housing should be allowed because it is potentially discriminatory. While I don't agree with that viewpoint, I would err on the side of caution & manage the applications in the order received to avoid this potential situation. Many management companies policies require that the date and time be marked on the application when it is accepted, and that applications will not be accepted unless they are fill out in entirety and any fees have been paid.

  Amy Williams
This comment was minimized by the moderator on the site

If it turns out that screening itself is deemed discriminatory, then I would completely agree with you. Beyond that, however, I would just determine whether the idea of comparing the number of points itself is discriminatory, even if all the components that went into the calculation are considered not discriminatory. I'm not a Fair Housing expert, but off the top of my head, I can't think of a way it would be. From my perspective, I can't see how it is necessarily a bad idea... just different than the standard "first come, first serve" model.

  Brent Williams
This comment was minimized by the moderator on the site

I see it as a matter of whether the applicant is qualified, not how qualified they are. If they pass, then that's it -- they pass and should be accepted, whether the next application has a higher score or not. The first application has met the criteria for being accepted and denying them in favor of a different applicant creates the issue.

  Amy Williams
This comment was minimized by the moderator on the site

I think this type of screening policy might not meet the legal requirements in my state.
Our main criteria is that the exact same criteria must be equally applied to everyone. So the first applicant who meets the criteria gets the apartment.
I do, however, help prospects "pre-qualify" themselves by explaining the major points of the criteria on the phone so they wont waste their money and my time just to be denied.

  Rose M
This comment was minimized by the moderator on the site

But wouldn't the criteria then simply be "have the highest score within a given time/date range"? At that point, the criteria is applied equally to every person within that given time/date range, correct? I don't know if it is the best option out there, but I think the idea is fascinating regardless!

  Brent Williams
This comment was minimized by the moderator on the site

We can't use a date range. The first application that meets (or exceeds) the criteria is the winner. I think a point scoring system could be helpful, but my personal opinion means nothing since the law dictates otherwise.

  Rose M
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Each post sounds like you have one available apartment and that many people are applying for...gee, congratulations. Here is how the real world works. A person applies for an apartment which you then hold for them until their credit report/screening comes back from the screening company you use. In my opinion it is dangerous to do all the credit/employment checking yourself. Using a service for that is smart; the service has never seen or interacted with the applicant therefore do not know gender, color, national origin etc so they are unbiased. You may be unbiased also but it could appear not so. Point system is great, but I am unclear why you aren't holding the apartment for the individual until their 'scores' are in...with today's methods you should know something in half an hour! Agree 100% with pre-qualifying. We have been doing that for 40 plus years...or we have supposed to be doing it! What do they need, when do they need it, how many people, animals/pets, some idea of rent budget. If consistent nothing wrong with chatting about criteria and any special circumstances like nonsmoking environment. The only legal tool we have, really, is the application. PLEASE in conversational pre-qualifying, your attitude should be saving them time, trip, effort; not just to save you trouble. Smart to tell them to bring their ID and anything else you need so they can apply readily and easily. (for their benefit, not yours. Being self serving is obvious...be careful!

  Anne Sadovsky
This comment was minimized by the moderator on the site

Hi Anne!

We don't do our own screening, just the pre-qualifying; but I don't want to take someone's money if they don't have a chance, and unfortunately, my prospects do not bother to read the qualifying criteria.

At my community, we frequently get dozens of prospects that want to submit an application for each available apartment. So apartments are only "held" for the 3-5 days it takes to turn them over.

It sometimes does take a day or two for the screening to be completed, because we don't base the entirety of the result on a screening that can be done in a half hour (which is just the credit and criminal history.)

The screening company we use does not approve an applicant until they confirm the validity of the applicants information. Usually they speak with four people. Current employer, former employer, current landlord, former landlord.

PS- I love your training seminars!

  Rose M
This comment was minimized by the moderator on the site

I think the statement, "Before inviting a potential tenant to look at your property, ask a few questions over the phone to save everyone some time" is the most dangerous line I have read in a long time. I realize you are not a manager or leasing professional, however, you are writing an article from an "expert's point of view." As such, you are actually saying in this article it is okay to prejudge someone over the phone so you won't waste your time. Let me just say this: people oftentimes do not communicate well in a phone conversation and having an in-person visit to the property is 99.99% more effective than a phone call. You will find out answers by walking side by side with the Prospect on a tour of the community and apartment than in a phone call. Leasing professionals can ask generic "qualifying questions as to budget, number of occupants residing in the home, if there are pets, etc. but just because the Prospect answers they have a pet, for example, does not mean they will bring that pet if your property is pet restrictive. To assume they don't qualify because you don't like what you are hearing is a dangerous game I will not allow my team to play, and frankly neither should anyone. Even though you may "invite" someone to the property so as not to "discriminate", let me tell you - If you have a condescending, unwelcoming telephone demeanor, these Prospects may very well never visit. Who are you essentially denying before they ever feel welcome to submit an application?

  Mindy Sharp

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