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Proper Tenant Screening Tips: Coachella Valley Property Owners

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Tenant screening is a crucial step in the process of renting your property. All too often, landlords don’t do a thorough job with this task, which can lead to many problems down the line that cost time and money! However, many successful real estate investors leave their tenant screening in the hands of a Coachella Valley property management company to ensure that tenant screening is done right.

In this blog post, we will teach you how to screen potential renters thoroughly so that you can head off potential problems before they damage your bottom line.

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Use a Screening Service that is FCRA Compliant

The Fair Credit Reporting Act (FCRA) is a federal law that encourages fairness, accuracy, and privacy with information utilized by credit reporting agencies for various purposes. Employee background checks are one of the most prevalent operations falling under FCRA. However, tenant screening and proper data handling for renters and prospective tenants also falls under the FCRA. To avoid lawsuits, property owners must use a screening service to comply with the law.

The best Coachella Valley property management companies know how to comply with the FCRA and can help with your tenant screening services.

Include These Elements In a Thorough Tenant Screening

What should you include in an effective background check? Start by requesting that each person who wants to rent your property fill out an application. Make sure the form you choose covers all of the information you’ll need about a potential renter. A thorough application contains financial, employment, and personal details for optimum results.

Property managers also recommend using the application to inform applicants that a background check, criminal history report, or credit check will be ordered as needed, and be sure to obtain their written permission. The prospective tenant will need to grant their authorization to pull their financial, employment, and personal information.

Conduct a Credit Check

Check a potential tenant’s credit history. Examine a potential renter’s credit report for late payments, collection accounts, charged-off credit card accounts, or other serious issues. However, one or two late payments in the past are not an automatic indication of a bad tenant—but you may want to reconsider anyone with significant financial issues, such as bankruptcy.

Also, a credit report can reveal if an applicant’s credit cards are maxed out or if they have large unpaid balances. If they do, they might struggle to pay their monthly rent.

Explore a Prospective Tenant's Background and Criminal History

A background check will provide you with a thorough look into an applicant’s history based on their social security number. Property owners should review the following information in a background check:

  • Criminal Records. You can probably overlook a youthful blunder but beware of significant criminal history. However, to avoid discrimination claims, work with a property manager to carefully weigh criminal history when choosing a tenant. 
  • Evictions. A prior eviction could be grounds to reject their application. However, you could ask for more details about the eviction if everything else looks good.
  • Public Records. You may decide not to pass on a tenant sued for unpaid rent, outstanding child support, or another significant financial problem. All of these might indicate a pattern of nonpayment.
Criminal background check (R) (S)

Work with a property management company to evaluable an applicant’s background before placing a new tenant. 

Review Previous Rental History

When a current landlord contacts a previous landlord, they typically only inquire if the tenant has paid all rent and whether the landlord was aware that the renter was leaving. However, to gain a genuine sense of the tenant, you must dig a little deeper. While you don’t want to intrude on anyone’s privacy, a property owner may ask basic questions about the tenant’s lifestyle to ensure they aren’t “professional tenants.”

Some potential questions to ask a previous landlord include:

  • Does the tenant owe any outstanding debt?
  • Is the tenant known for missing payments?
  • Is the tenant responsible for any significant damage to the rental property?
  • Would you rent your home to this person in the future?

If a former landlord gives positive feedback in response to these questions, you’re probably looking at a good renter!

Do Not Discriminate. Ever.

In searching for renters that pay the rent on time, property owners should never discriminate against people because of their race, religion, sex, age, or anything else. The Fair Housing Act prohibits discrimination when selecting and managing renters. A property manager can ensure your tenant screening process is fair so that real estate investors can stay on the right side of the law.

Property Managers Are Tenant Screening Experts

The difference between a good tenant and a difficult tenant can make all the difference to a real estate investor’s bottom line. If you’re not sure that your screening process is improving your ROI, a Coachella Valley property management company has tenant screening systems in place to ensure that your property has the most qualified tenants. McLean Company offers comprehensive property management services to help you find the best tenants! Reach out soon to learn more about our full-service property management. 

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