Tenant Screening Introduction
Bad tenants are the number one reason landlords leave the industry and sell their properties. Not only can they cause physical damage to your property, but they also cause emotional and administrative stress to you and your team. Bad tenants cost lots of time and money, preventing you from focusing on your vacancies and providing top service to your other tenants.
Tenant screening is your line of defence for protecting yourself from any headaches bad tenants might bring. Unfortunately, tenant screening is as much of an art as it is a science, but if you stick firmly to your process, you significantly increase your chances of having a happy, clean and respectful occupant!
One of our favourite practices is to screen a prospect prior to their showing. This helps you save time by validating the prospect’s seriousness before the showing. Here are some industry practices that help pre-qualify tenants:
The pre-showing phone call or email
A lot of online guides skip this step, but it is absolutely crucial! This quick 5-10 minute phone call (or a template email) can help save you up to an hour per bad prospect. You’re able to answer any deal-breaking questions the prospect might have (saving you time), and you’re able to better understand the tenant as an individual. Here’s what you should cover within each call:
- Confirm that the tenant knows the rental amount, requested unit type, and layout.
- Make sure to go over the deposit policy, and any advanced payments required upfront (i.e. first and last months rent).
- Make sure they understand your pet and smoking policy.
- Be upfront about the application process (let them know you will be talking to their personal, landlord and work references)
- Ask the prospect why they are moving, why they are drawn to your property, and if they have given their current landlord notice (if applicable).
- Let the tenant know you will be doing periodic property inspections
- Ask the prospect if they have any questions!
- Ask them if they would still like to proceed with the showing.
You want to show your unit to tenants who show a genuine interest in your property. It is important not to hard sell your property. You want to attract a few, highly qualified (and highly interested) prospects, rather than many low-qualified leads. Save yourself the time (and the headache)!
Not only does the showing help the tenant ‘get-a-feel’ for the property, but it also gives you the opportunity to get to know your tenant. Here are a few things to look out for:
- Did the tenant show up on time?
- If they have children with them, are they well behaved?
- Did the prospect take off their shoes?
- What does the back seat of their car look like? (Walk them to their car after the showing)
- Does the prospect provide good eye contact
- Is the tenant dressed appropriately (clean shoes, unwrinkled clothes)
- Attitude and manners (are they polite and respectful?)
The application is your next set of defence, and should be thorough. Make sure you have a disclaimer in your application form permitting you to perform a credit check, and to communicate with their references. This is one of the most important steps in the tenant screening process.
The Application Fee
We believe it’s important to charge a non-refundable application fee to all prospects. Some landlords choose to have this fee go towards the applicant’s deposit if they are successful. Application fees help deter prospects who aren’t serious about renting your property, or those who don’t think they will pass your application process (maybe they have bad credit, not enough references etc.) Application fees help save you time!
The application is the most important document you will collect during the tenant screening process. Your application should ask for the following:
- Current address
- Listing any additional tenants and occupants
- Pet information (if applicable)
- Current occupation (ask for the address as well for verification purposes)
- Previous occupation
- Most recent landlord reference
- Previous landlord reference (this one is important, as the current landlord may be trying to offload their bad tenant on you)
- Personal references (non-family)
- Ask the tenant to write about themselves in a small paragraph
- Key yes/no questions, such as:
- Have you ever declared bankruptcy?
- Have you ever taken part in a landlord-related court or tribunal hearing?
- Have you ever been convicted of a crime or felony?
- Have you ever been evicted from a tenancy or left owing money?
- Will they be living with pets?
- Employment verification (a pay stub or letter from employer) and estimated yearly earnings
- Sin number (this is optional by law, but is used to obtain a credit report)
- Identification (such as a drivers license)
As you are collecting sensitive data, it is very important to keep all of your prospects information in a safe place. It is also important to make sure you educate yourself on local/state/provincial human right laws as they apply to housing. For Ontario, you can check out the Ontario Human Rights Commission for more information (we’ll also be writing about this later!)
We know what your thinking – wow, that’s a lot of paperwork! I wish there was a cloud based solution that was paper-free, secure, and easy to use… look no further then yuhu. We provide each prospect with an online application form, which we safely store and encrypt the users information so you have that extra piece of mind. You can also access their information securely from any device, in any location (we’re cloud based!) We also allow you to accept online application fees (credit card and interac debit).
Once your new tenant is ready to move in, it’s important to perform a move-in inspection. We’ve written a very helpful guide you can read here.
Remember: Happy Tenants = Happy Landlord
Feel free to email with any questions at [email protected].
If you are looking for an easy way to manage your rental properties online, visit us at www.yuhu.io. We make lease generation, online marketing, payment collection, and managing your rental units as easy as clicking a button!