Everything Property Managers Need to Know
Last modified on January 5th, 2021
By Brittany Benz
Tenant screening is an integral part of property management, however it’s also one of the most time-consuming processes. From verifying documentation to analyzing information to make decisions, it can take up a lot of your team’s time and lead to operational inefficiencies. Having a formal screening process that you consistently follow and the right technology in place can not only ensure you’re staying compliant with all fair housing laws, but also streamline your leasing operations in the long run. Follow these simple tenant screening tips to identify renters who meet your criteria and reduce financial risk.
Develop a Standardized Process for Screening Tenants
One of the most critical aspects of the tenant screening process is to have a consistent process that you use to evaluate every single renter to prevent any potential bias. Having a standard online application process can make it easier to ensure you’re collecting the same information and sticking to a consistent criteria every time.
Some things you’ll definitely need to run a screening check are the applicant’s full name, phone number, rental references, and most importantly their social security number. SSN verification helps ensure you pull credit information against the correct applicant, and can also act as a red flag if the details are incorrect. Online applications, like those available within AppFolio, can streamline the process and ensure every applicant provides the same information. Along with a consistent application criteria, you should also have carefully thought out policies and procedures listing out your approval and denial criteria, as permitted by your state and locality.
Follow all of the Current Laws and Regulations
Regardless of what tools you use to screen residents, it’s important to remember that there are laws and regulations regarding tenant screening and these laws sometimes change. As stated by the U.S. Department by Housing and Development, “It is illegal to discriminate in the sale or rental of housing, including against individuals seeking a mortgage or housing assistance, or in other housing-related activities. The Fair Housing Act prohibits this discrimination because of race, color, national origin, religion, sex, familial status, and disability.” Be sure to check your local and state laws (including any pending legislation) as well as any federal guidance before establishing any policies to accept or decline applicants.
For instance, Oregon has a law that property managers cannot discriminate against individuals for certain types of criminal charges. So make certain you’re keeping up to date with your state’s tenant and landlord code, and are following the same fair process each time. To learn more about the Fair Housing Act and what is prohibited, take a look at this article.
Use Technology to Help Streamline Tenant Screening
The entire screening process can be time-consuming, especially when you’re managing a lot of turnover. In addition, sometimes information is difficult to get or resources are scarce. If you can cut down on the time it takes to screen your applicants, you can spend more time on marketing your property and better serving your current residents. Tenant and income verification screening services, which are integrated with your property management software, like those offered by AppFolio, can streamline the entire process.
With AppFolio’s built-in Tenant Screening all you have to do is press the “screen now” button after an application is submitted and you’ll receive a comprehensive report shortly after. This includes summarized and detailed views of an applicant’s credit score, criminal history, eviction history, and income verification. AppFolio then calculates a decision based on criteria and parameters that the client themselves set up, increasing the speed and consistency of the screening process.
AppFolio’s Tenant Screening can also be directly incorporated into smart workflows in AppFolio Property Manager Plus. This way your leasing teams never miss a step and always know what to do next.
Brian Hartsell of Key Property Management has had great success with this feature and been able to simplify his leasing operations as a result, “AppFolio’s Tenant Screening has given us a one-stop shop to do a comprehensive and diligent background check within the software. It streamlines the transition of application to tenant and the process couldn’t be any simpler.”
Manually verifying pay stubs, bank statements, or job offer letters to verify renters’ income can take up a lot of your team’s time. Adding to the frustration, these documents can often be misleading, outdated, or forged. AppFolio’s Income Verification Screening functionality can automatically verify the applicant’s bank information and active sources of income, so you can ensure authenticity and minimize risk. Seamlessly integrated into the application process, income verification screening helps you fill vacancies faster with a more complete view of a renter’s financial situation.
Since using AppFolio’s Income Verification Screening feature, Mike Fazio of Elevation Real Estate has been able to cut back on the time his team spends screening applicants, “AppFolio’s Income Verification Screening functionality has streamlined our leasing operations across our portfolio, and resulted in a faster turnaround on application processing.”
From credit to income, all of these screening results are captured as part of the resident record and stored in AppFolio for easy future access. It can be tough to find great residents, but when you have the right tools the entire process can be easier. Taking the extra steps for consistent tenant screening is well worth it in the long run. Conducting a thorough investigation can be time consuming, but if you rely on the latest technology to help you do most of the leg work, you can streamline your leasing process and free up your team to focus on what matters most — finding and moving in great residents. In the end, you’ll decrease turnover with quality renters and build a respectable reputation for your property.