Landlords: How to Screen Tenants Without a Lot of Paperwork

As a landlord, it's very difficult to screen lots and lots of tenants without dealing with mistakes. Those are normal, but realistically, you need to screen tenants because there can easily be problems that you're not seeing. Making sure you are screening tenants properly and ensuring that you're not getting buried into paperwork is extremely important.

Why do you need to screen tenants?

The short answer is simple here, tenants can be very good, or some of them can be extremely bad to deal with. When you meet those people, they seem great, and realistically, you don't know what to expect. That's why it makes sense to screen them and see what the situation is at the time. It will give you a good idea about them, plus, there are inherent benefits that come from screening as well.

For example, if you screen tenants, you will be reducing any financial risks, not to mention you can prevent property damage as well. Plus, if you find the right tenants, that reduces the headache you would normally be dealing with. And yes, it can also make it easier to avoid any legal issues. All in all, it just shows great value here, not to mention results can be much better in the end.

What are the issues related to traditional screening?

While it does sound ok to screen tenants, the reality is that traditional methods tend to be quite problematic and not that good. They do have drawbacks, such as paper overload, a very slow verification process, security risks and the process not being very consistent in the first place. That means you might end up dealing with all kinds of problems, which in turn lead to not the best results, and that alone is something you have to consider here.

That's why it makes a lot of sense to try and go the digital route. Yes, going completely digital makes a lot of sense, because it removes those downsides, while making the entire process much easier to handle. For example, the speed of uploading documents and sharing them is much faster. You also have a convenient way of doing things, and the security as a whole is improved. Not only that, but organizing stuff is simpler, more cohesive, and it just leads to a better outcome in the end.

What key elements should you focus on when screening tenants?

That always depends on the landlord and what they are looking for. The most important thing is to avoid any rush and ensure that you cover all the necessary parts correctly. And here's what you need to know:

• Check the application form, and see the rental history, references, employment details, contact info, etc.
• Identity verification is important, because you want to make sure that you confirm those persons are who they say they are. It might seem an obvious thing, but you want to avoid that as much as possible.
• Income verification is just as important. It shows you that the tenant can afford rent, so review their bank statement, pay stub or employment contract, whatever they provide.
• Doing a credit and background check is also just as important, too. You can delve deeper into risks and financial responsibility, all of which are important things to take into consideration when choosing tenants.
• It also helps to check the rental history as well. The idea is to see whether the tenant was paying their rent on time, if they damaged the previous properties in any way, if there was any lease compliance problem and so on. All of that matters more than you expect, and it will surely make it easier to narrow down any issues.

Any documents that you accumulate need to be stored properly. Once you find the right tenant, you can use a utility bill generator to keep track of all the bills, if they were paid or not. It just streamlines the process and it will make it easier to track everything correctly, without worrying about any issues.

What steps do you need to go through when screening tenants:

• Create a tenant application form, or you can use a pre-existing option
• Then, you can send the document request to the applicant
• After that, you receive the documents from the tenant and can start going through them. It's possible to use an automated screening tool, depending on the situation.
• Review the verified documents and see if the tenant is a good fit for you or not
• Ideally, you want to store all the tenant documents in the cloud for any future reference. That's important, because it allows you to access those files whenever it's necessary, and you can prevent any concerns

With that being said, you also need to think about privacy and compliance requirements. For example, you are collecting sensitive data, and that means you need to comply with rules like GDPR, the Fair Housing Act or any state/region-specific laws. That way, you want to be certain there are no compliance problems, and that you can tackle those permissions adequately, while adapting everything in a professional manner.

Mistakes you want to avoid doing the tenant screening process

As you can imagine, tenant screening comes with its pros and cons. It can have its downsides, so it makes a lot of sense to manage and implement everything correctly. With that being said, it's just as important to understand how these mistakes can affect you:

• A lot of landlords rely just on the credit score. But the thing is, even if someone has a high credit score, that doesn't guarantee they are a good tenant. That's why it's a very good idea to try and avoid those mistakes as much as possible and use other info to base your decision on.
• Skipping identity verification speeds things up, but the downside here is that you will end up with fraudulent applications. You should never skip identity verification, as it truly is a crucial aspect of this entire process. Making sure that you check the identity of the tenant and verify it properly is extremely important.
• If you don't use consistent criteria, that can lead to discrimination issues. Obviously, you always want to stick to the rule set you created and adhere to that. If you have any type of bias, it just leads to problems. And you must try to avoid any bias as much as possible.
• Failing to check references is a huge problem. You want to see what the tenant did previously, if he paid stuff on time, if there were any issues and so on. Of course, a small problem in the past doesn't mean the person was problematic in any way. But it could be a sign that you need to check these things and address them, if possible. So it's totally important to check references.

We recommend taking your time and doing a proper tenant screening, because it matters. When you screen tenants, all you do is you're protecting yourself from problems. And while that doesn't seem like a lot at first, it will only become more challenging in the long run if you get the wrong tenant. So you should stick to these ideas and check the mistakes listed above to avoid them as well!