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When you own Lehigh Valley rental property, you’ll be keen to find full-proof processes for everything. From vetting seasonal contractors to collecting rent payments, having a robust strategy and well-organized plan will help ensure you don’t overlook a single best practice or detail. The same goes for pre-screening resident candidates.
Putting together a full-proof applicant pre-screening process is mission-critical to your NOI success. Vacancies can be costly. However, rushing to accept the wrong candidate could cost you even more. Not following through on reference checks could leave you with expensive property damage, lost rent and revenue, and even litigation measures and expenses. To help you avoid these pitfalls, here are expert-inspired suggestions you can follow to develop your full-proof resident pre-screening process for the best results.
Understand the Fair Housing Act First
Before diving into the resident pre-screening process steps, you’ll want to be certain you have a clear understanding of the Fair Housing Act. And for anyone who’s new to the real estate industry, consulting with a legal professional can be beneficial. The act itself was enacted and put into place to protect applicants against discriminatory pre-screening and resident engagement behavior. It outlines harassment, retaliation, and threat definitions that every rental property owner should know.
Obviously, you’ll go about your pre-screening as diligently as you can, with fairness and transparency. However, there are nuances that you may inadvertently overlook that could put you at risk. Know what questions you can ask, what data you can collect, and what language is permissible on forms. If you’re unsure or want to talk with a professional, do so before you engage your first potential resident.
Use a Pre-Application Questionnaire
As you develop your resident pre-screening process, start by putting together a questionnaire or pre-application survey. This can be a less formal roster of questions, available for in-person completion, digital submission, or verbal discussion. Here are a few questions to include to help you better gauge the needs of the candidate and determine whether or not it makes sense to move forward with the official application as a next step.
What is your ideal move-in date?
Do you have pets?
How many people will be living in your household?
How long have you been at your current address?
Have you rented before?
Have you broken a rental agreement or been evicted?
Would your current or past landlord provide a good recommendation?
What to Include on Your Application
If you feel good about the responses on your pre-screening questionnaire, you can then move on to the more formal application. This step in the process is for gathering all the pertinent details about the potential resident that you’ll need to perform various checks and references. It will likely start by collecting relevant contact information, including email addresses, phone numbers, employment contacts, and identification data.
Make sure yours includes:
Name, Address, Phone
Current Employer, Time on the Job, Contacts
Monthly Earnings
You can verify income by requesting copies of pay stubs, direct deposits, or W2s. You can also ask for past year’s tax returns and bank statements.
Call All Available References
Once you’ve collected the details about the potential resident, you’ll need to put a strict process in place for following up on them. No matter how great you think you might feel about a candidate, nor how eager you are to get a lease signed, always call the references. Pre-screening residents is not a task you'll want to tackle by gut instinct alone. A previous landlord can be instrumental in telling you if the candidate paid rent on time, left the property in good condition, and left on good terms.
It’s equally important to verify the applicant’s income by calling the current employer. Verify not only that the candidate is currently working but also cross-reference the timeframe of employment history. If there are any discrepancies or misstatements on the application, it’s a red flag that the person might have trouble committing to a monthly rent payment.
What to Look for in Credit History
A review of the potential resident’s credit history will uncover a lot of intel useful to a rental property owner. You can determine if a person makes regular and timely payments on accounts. Alternatively, someone who’s routinely late with payments could be a prediction of what you might expect with rent payments. Be mindful of bankruptcies and collections accounts, too. Credit checks are entirely legal to request. You do, however, need the applicant’s permission. So, make sure your application has a proper authorization and signature before exploring the credit report.
What You Can Learn from a Background Check
There are guidelines to follow when inquiring about someone’s criminal history and requesting permission to perform a background check. Don’t ever overlook this step in your tenant pre-screening process, either. You’ll need to know who will be living in your property. Criminal history and felony convictions need to be assessed. Safety and security matter, especially if you’re managing a multi-family property. Remember, not all arrests imply guilt, and not all charges indicate future violations.
Develop a Process for Responding to Applicants
It’s important to outline a precise communication timeline with every applicant. Instruct them on how to apply and what to include with their application, and share your next steps in processing. Let them know you’ll need a few days to follow up on their references and verify employment. Tell them you might call if you have additional questions. And set the expectation that no matter what you determine as a final result, you’ll communicate with them.
It's easy to make a call to say congratulations and welcome someone into your rental property. But it can be more challenging to turn people down, especially if you’ve uncovered something unfavorable in your analysis of their data. To avoid impropriety during these communications, consider drafting template responses to use that feature legally appropriate language and explanations. You can then follow the process and script without concern of getting into unwanted situations or heated discussions after you turn someone down.
Tools to Help with Your Resident Pre-Screening
Putting a process in place for your resident pre-screening is only half the battle. You’ll then need to execute. And to help, there are automations and software programs available to streamline some of the tedious organizational and administrative tasks. You can explore some of the programs available like Propertyware, Buildium, or AppFolio to see which might be most helpful to you.
In addition to automations, you might also consider working with a rental property management partner, like Axel Property Management. Instead of guessing your way through developing a resident pre-screening process, you could rely on the professionals who know all the very latest and best practices to leverage. Our team of property management experts can strategically execute every step and narrow down the best applicants for consideration.
Axel Property Management can help you do more than just pre-screen residents for your Lehigh Valley rental property. From financial planning and investment advice to physical asset management and vacancy advertising, our team can help you do it all! And we’ll outline the best strategic paths for portfolio growth and NOI success. Contact Axel Property Management to learn more about embarking on your rental property investment journey!
