Failing to adequately screen your tenants can quickly result in your tenancy turning sour. It’s important to know the basics about who you are trusting with your investment as a landlord – and that’s where screening comes in.
We explain why screening your tenants is essential and the implications you may run into if you skip this important step when renting out your property.
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As a landlord, meeting rent payments is the least that your tenants should be able to do. Without rent payments, there isn’t much point in offering out your investment for someone to live in. You rely on these payments in order to cover your mortgage payments and make a profit.
Screening your tenants will help you to ensure that you choose tenants who are financially stable and can afford to pay the rent regularly and on time. It allows you to check a tenant’s income, employment history and creditworthiness. This allows you to minimise the risk of renting to tenants who may struggle to meet their financial obligations.
If a potential tenant has a less-than-desirable credit history or earns a lower salary than you’re comfortable with given the rental price, you can reject their application. However, just remember that a bad credit history doesn’t necessarily mean that a tenant will struggle to pay rent. It’s really important to keep an open mind and of course, keep an open conversation with the individual in question with any concerns you might have.
Protect your investment
Finding reliable tenants means that you are less likely to encounter issues with property damage. Screening can identify individuals with a history of damaging rental properties or engaging in illegal activities, as you can request references from previous landlords. This allows you to safeguard your investment.
The sad reality is that not all tenants will look after your property just as you would. That being said, the majority of tenants will not have bad intentions – they just want a safe and comfortable home to live in. Once your chosen tenants are in, remember to carry out regular property inspections to ensure that everything is in good working order. Remember to make allowances for fair wear and tear over time. It’s unfair to expect your property to stay in the exact condition you first rented it out in!
Screening tenants is a useful way to protect your rental property, but you should also get landlord insurance quotes to ensure that you are thoroughly protected for all eventualities, including malicious damage.
When choosing tenants to live in your rented property, you ultimately make the all-important decision. However, you must be very careful not to discriminate when rejecting prospective tenants based on factors such as race, colour, religion, sex, national origin, familial status and disability. These are referred to as the ‘protected characteristics’.
Screening helps you to comply with fair housing laws and regulations. By following a consistent screening process and treating all applicants equally, landlords can minimise the risk of facing legal challenges.
If you can have a positive and strong relationship with your tenants, your life as a landlord will be much easier! Screening tenants allows you to evaluate an individual’s rental history from previous landlords which can help you identify who has a track record of being respectful, responsible and considerate towards their landlord and neighbours.
Any conflict between you and your tenant and also between your tenant and neighbours can quickly become a real headache and make even the simplest aspects of being a landlord feel difficult. Take the time to screen your tenant and ensure that you could be a good match for a smooth and peaceful tenancy.
Reduced tenant turnover
No landlord wants to be advertising for new tenants every 12 months. Ideally, you’ll want to secure tenants who plan to stay for an extended period of time. Frequent turnover will lead to increased vacancy and turnover costs.
By screening tenants, you have more chance of finding tenants who are likely to be stable, responsible and committed to a long-term rental arrangement. Once you’ve found trustworthy and reliable tenants, you can sit back, relax and enjoy being a landlord. Plus, tenants are also looking to have a good relationship with a landlord. If they find that in you, they’ll be more likely to stay where they are long-term because a good relationship with their next landlord is never guaranteed.
It’s totally up to you who you rent your property to, but use screening as a valuable tool to help you make the right decisions. Screening protects you and your property and that in itself is worth its weight in gold. Good luck and happy landlord-ing!