The Property Management Guide to Tenant Screening

Being the owner of a property comes with responsibilities that you may not have expected—and screening your future renters is nobody’s favorite part of the job. Still, selecting the right resident is essential to the continued success of your rental property—and it’s something our property management team takes very seriously. 

An effective tenant screening process is the only reliable way to avoid getting stuck with a problem. A challenging renter could be someone who doesn’t pay rent, doesn’t respect your single-family property, or doesn’t respect your other residents, if you happen to operate a multi-family residential property.

If you’re managing your Utah property on your own without the assistance of a property manager, then it’s up to you to screen each potential resident. However, you can still take advantage of our insight from offering excellent property management services to handle it the right way!

Please note: This article is not a substitute for the great legal advice of a skilled attorney. It’s designed to help property owners get an understanding of the screening process. If you need direct legal counsel, reach out to your allies at Reeder Asset Management!

Never, Ever Discriminate

First and foremost, it’s important to make sure your tenant screening practices are always fair—and never discriminatory. It is, of course, important to ensure fairness for every prospective renter—no one should ever feel as though they were denied housing due to race, religion, sexual orientation, familial status, disability, or any other factor—but it’s for the property owner’s benefit, too. 

Discrimination isn’t always as obvious and easy to spot as we might like to think. If your screening process appears even remotely discriminatory, it can land you in hot water. This is one of the reasons we recommend working with a property management company with years of experience in fair screening procedures. To avoid the risk of discrimination under the Fair Housing Act (FHA), make sure that:

  • You ask only questions that are necessary to solicit the information needed to determine qualifications.
  • Your screening process is uniform: the same questions should be asked of every applicant.

Business people discussing financial documentsUse a Reputable Screening Service

We cannot overstate the importance of working with a reputable screening service who will perform background checks in a manner that is fair, ethical, thorough, and above all, FCRA-compliant. The Fair Credit Reporting Act (FCRA) is a law that protects consumers whose information is collected by credit bureaus, medical information companies, tenant screening services, and other consumer reporting agencies.

The law applies to employers, property owners, and other companies or individuals who carry out background checks. As an investor, it is your responsibility (and the responsibility of the screening service you utilize) to ensure that all screening processes are FCRA-compliant. The law can be complicated, and it’s essential that you understand how it applies to resident screening

Credit Checks

Credit score is one of the most common numbers property owners use to make sure a prospective renter is responsible and financially stable. It shouldn’t be your only qualification (younger renters, for example, may be perfectly qualified despite having limited credit history), but you should at least check it so you can catch any red flags. Keep in mind that you must have an applicant’s consent to check their credit history!

Background Checks

Background checks have become a common part of the screening process. Obviously, if an applicant has a criminal background, you’ll want to know about it. You may choose to overlook some minor offenses that the applicant committed in their youth, but an applicant with a recurring record of violent crime is another story. After all, Utah property owners can be held liable in some cases if a resident commits a crime on their property.

Previous Rental History

You may want to think twice about renting to someone with a history of frequent evictions and missed rent payments. Getting a sense of an applicant’s previous rental history usually involves getting references from current and past property owners. It may be wise to overlook a single eviction in the applicant’s past—or at least take the circumstances into consideration—but a pattern of broken leases and evictions should be a major red flag. 

Young couple in love moved in their new flat

Work With an Experienced Property Management Group

Screening a resident on your own is challenging, not to mention it opens you up to potential legal trouble if an applicant feels as though they are being treated unfairly. That being said, trying to decide which screening service to use can be equally tricky. To be perfectly frank, it’s a lot for any Utah property owner to deal with—which is one of the reasons a trusted property management company can be such an asset. 

At Reeder Asset Management, we’ve developed a screening process that is guaranteed to deliver peace of mind for the property owners we serve. In fact, we believe in our abilities as your property manager so completely that we offer a Lease Guarantee to back it up! If a resident we screened and placed fails to fulfill their entire lease term, we’ll find you a new renter with no Placement Fee charge. 

You can even get started for free with our collection of resources designed to assist property owners, including our Foolproof Screening Checklist!

Posted by:
Reeder Asset Management on October 1, 2020