Multifamily data research suggests that tenant screening is a cost-effective way to find and keep good tenants. A good tenant is worth their weight in gold. So, even if you’re dealing with vacancies, it may be worth it in the long-run to properly screen prospective tenants before filling them with the wrong tenants.
Multifamily Data Research Shows Tenant Screening is Important
It can be easy to get in a hurry to fill vacant units, but keep in mind that evictions can cost you thousands of dollars. Some multifamily data research shows that the average total cost for an eviction may be $4,000 or more. Everything from legal fees and lost rent to fixing property damage can add to the costs of an eviction. Instead, you want to find tenants that you won’t have to evict later. This is where tenant screening comes in.
Screening tenants is easier than ever with online tools and resources. You can pull a credit check, background check, and more without leaving the comfort of your office chair. This can also help you reduce the risk of renting to the wrong person.
Now, you likely already have some systems in place, like an application process and pulling background information to look for criminal history. However, here are a couple of other tips that may help you with the tenant screening process:
- Talk to their Employer: Don’t just verify income through the employer, ask about how they are as an employee! A good rule of thumb is if a person is a bad employee, they are likely a bad tenant as well. Also, bad employees are probably more likely to get fired, meaning they may not have income to pay their rent later.
- Talk to Two Previous Landlords: To know what to expect from a prospective tenant, try to learn how they have been with landlords in the past. Talking to two can give you a couple of different perspectives on a person.
Tenant Screening Legally & Avoiding Discrimination
Tenant screening is important, but it’s equally important to do so legally. The Fair Housing Act protects prospective tenants from discrimination for things like race, gender, nationality, religion, family status, disability, and more. So, you need to make sure your screening process avoids discrimination. Local and state laws may also offer protections for classes that aren’t listed in the Fair Housing Act.
However, that doesn’t mean you have to rent to everyone who applies for your vacant unit. You can still use property management data to help you determine the best types of tenants for your community. For instance, knowing the income range in your market can help you determine your minimum income requirements for tenants.
Here are some legal reasons you can reject a potential tenant’s rental application:
- Insufficient income
- Unverifiable income
- Planning to have pets against your rental policy
- Planning to smoke on the property against your policy
- Poor credit
- Too much debt
- Unacceptable references
One way to help protect yourself against housing discrimination accusations is to have a written list of standards for your tenants (and make sure you apply them fairly to every tenant). For instance, say you rejected an applicant because their income was lower than your standard. Written standards and good records of their application can help you show a legal reason why you rejected their application.
Get the most Comprehensive, Up-to-Date Property Management Data in Your Market
Multifamily data helps you make business decisions for your property, so make sure you get the highest quality reports by choosing our services at Apartment Data! Our experts contact properties in our database every month to ensure you receive the most accurate information available for your apartment market. We’re committed to providing the highest quality multifamily data research so you can remain successful in an ever competitive market. Call us now at (800) 595-8730 to request a free demonstration!