The Importance of Tenant Screening in Property Management

Finding good tenants is one of the most challenging parts of owning rental property. A bad tenant can cause costly damage and miss payments, and it’s often impossible to find them once they move in.

To avoid problems, landlords need to be strict with screening tenants. It includes conducting background checks, requiring verifiable references, and interviewing them in person.

Background Checks

Tenant screening is vital to ensure the safety of all your tenants. A full criminal background check will reveal any potential issues that could pose a risk to your property and the community. While it is important to not discriminate against protected classes (race, color, religion, sex, familial status, disability, source of income, and ancestry), you can deny an applicant if they have a criminal history that would make them unsuitable for your rental property.

One of the responsibilities of a property management company Denver is to examine the credit record, which can give you essential information about a potential tenant. It can reveal their debt and whether they make enough money to pay their rent each month. Additionally, it can disclose additional monetary problems that might cause concern, such as a high debt-to-income ratio or even bankruptcy. Verifying your prospective tenant’s employment may also be an effective technique to learn more about their financial stability. It can reveal more about their reliability as a tenant, such as their consistency with payments or if they have an irregular work schedule.

Credit Checks

Choosing a tenant who will pay rent on time and treat the property with care is critical. Landlords should follow Denver tenant screening laws to reduce the chances of bad tenants damaging their property. A credit check can reveal if the potential tenant has been evicted or had trouble with previous landlords.

If the credit report shows red flags, a landlord can dismiss the applicant and decline their application. Fair housing rules that forbid discrimination based on race, color, religion, sex, familial status, handicap, creed, or sexual orientation must be followed. To achieve this, an “adverse action” letter must be sent explaining why they were turned away.

Reference Checks

It’s crucial to find tenants who will look after your rental home. They might also damage your possessions. Dependable tenants who have the means to pay their rent on time and take good care of their homes by using tenant screening techniques.

In addition to credit and criminal background checks, you can use a reference check. You can ask references questions about the applicant’s employment and financial situation, including how much they make. It helps you determine whether they are a suitable tenant for your Denver rental home.

However, you cannot ask a potential tenant question violating the Fair Housing Act. These include questions about race, age, religion, national origin, sex, and family status. Additionally, ensure you obtain the prospective tenant’s written permission before doing a background investigation and a credit check. It will help you avoid any discrimination lawsuits in the future.

Interviews

You can get to know your potential renter better during an interview and determine their personality. It will enable you to assess whether they fit well with your neighborhood and property. In addition, interviews give you a chance to ask the applicant questions about their employment and income verification.

Depending on your preference, interviews can be conducted in person or over the phone. Inquire about the tenant’s prior rental properties, whether they have any pets, and any other concerns you may have.

Choosing the right tenants can help you avoid costly repairs and even more expensive evictions. Finding tenants who will pay their rent on time and take care of your property requires tenant screening, which may be challenging for landlords. By using credit reports, background checks, and legal eviction reports, you can find the best possible tenant for your property.