Tenant Screening Works!

Cash is not King!

There are many costs that accrue when managing rental property in St. Louis.  Two of the largest are Vacancy, the daily loss of rent from a vacant unit, and the renovation of a unit after a bad tenant leaves.  These two costs can place a Landlord under a lot of pressure to place the first prospective tenant that comes along.  Especially if that Tenant is willing to put down a good deposit.  It is very easy to be tempted by large deposits or pre-paid rent when placing tenants in your property.  Many renters rely on this tactic to get them into their next unit in an attempt to avoid the screening process.  They are looking for Landlords who will put them in without an application and are usually in a rush to find a place.  Be careful around Tenants offering cash to move in right now.

What is Good Tenant Screening?

St. Louis has a large renting population.  This is good for landlords since there is more opportunity to get their unit filled. At the same time, there are more renters who have developed a habit of taking advantage of Landlords.  These tenants believe they have the anonymity in the large rental market.  Good Tenant Screening will not only tell a Landlord about a Renters past but will offer insight into the future relationship the Landlord and Tenant will have together.  A Landlord should have a good idea of the risks associated with each Tenant prior to moving the Tenant into a rental unit.  

What Steps Should a Landlord Take to Screen?

Landlords are generally supplied with information by the Renter about the Renters history.  This gives the Landlord a good basis of information to start with but should be verified as sometimes Renters include false information.  A Landlord should begin by checking Criminal and Eviction history.  There are databases in each community that hold court information.  Sometimes there is a subscription charge to access the data but many communities offer the information for free online, or you can always visit the courts directly.

Once you have verified the criminal and eviction history, A Landlord should pull the Renters credit.  During the eviction and criminal check there may have been some similarly named individuals with cases.  The Landlord needs to verify these people are not the same as their applicant.  To do this you can cross reference the addresses on the Case File against the past addresses on the credit file to determine if this is the same person.  If there is no criminal or eviction history, then you would review the credit accounts to get a picture of how the individual pays their bills.  You may not pay as much attention to the Credit Score as this is not the best indicator for whether a Renter will pay their rent.  Look for unpaid utility bills, judgements from individuals or Management Companies and whether they don't pay anything on time or pay some things on time.  This report is used as a loose indicator for future payment history.  

The next bit of information to check out is the Renters Rental history.  Here the Renter has supplied the names and phone numbers of past Landlords.  You will need to verify these past Landlords are actual Owners of the property, as this is a common area of false information.  You can check Tax Records to find out who owns the building of their previous or current apartment and the names should match the name on the application.  If the Landlord reference is a company, make sure the company is listed in the phonebook and the number you are calling is not a cell phone, call the main office.  

When interviewing past Landlords for references, do not lead the Landlords with your questions.  Ask about payment history, rent payment amount, how long were they tenants, were their any complaints, did they get the deposit back, if the Landlord is a friend or related, would they re-rent and if there is any other helpful information they can provide.  You should ask open ended questions on the phone or submit a faxed questionnaire that does the same thing.  If they are not answering too completely, don't be afraid to ask them to elaborate.  If they answered the questionnaire incompletely, call them for clarification.  This is probably the most important information you can obtain so get as much information as you can.  Take notes while you are talking for later reference.

After Rental History, you will verify income and employment.  You will generally have to fax a questionnaire but some employers will give information over the phone.  If you have a chance to speak with someone, take the time to try to squeeze out a character reference from their employer, this will give you insight into their working habits, although this is not always possible in large companies.  Questions you should ask are when they started, full time or part time, hours worked per week, are they going to remain employed, what their salary/hourly rate is and whether they are generally a good employee.

Sometimes you may elect to talk to character references.  Good character references are non-personal contacts who have a non-emotional third party perspective on our Renter.  Someone like a teacher, employer, supervisor etc. These can be used to fill out questions regarding the Renters personality and what it will be like to interact with this person. Feel free to ask open ended questions and make people elaborate if you have any questions.  

So Whats the End Result?

At the end of the process, you should have a clear picture of what type of person your Renter may be.  How they pay their debts, how much they make, how they interacted with their employers and past landlords and how they carry themselves on a day to day basis.  With the amount of information you should have identified risks, like not enough income, lack of rental history, unstable job history, criminal/eviction history.  This should allow you to make an informed decision if it is worth the risk.

Reconnect Realty provides Tenant Screening, Property Management and Leasing.

Information provided by:

Steve Prane

Broker

Reconnect Realty

(314) 771-4222

http://www.FindStLouisHomes.com