Does Your Property Manager REALLY Screen Tenants?

By
Services for Real Estate Pros with Manage My Property

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No landlord ever wants to land a bad tenant, but regretfully all screening processes were not created equally. Applicants put their best foot forward and the more they have to hide, the greater lengths they will go to hide facts that would eliminate them from consideration.

The screening process can vary widely between property managers so its important to find out just how much protection the company is going to provide you from what later turn out to be bad tenants. It only takes one eviction to drive home just how important this aspect of the management companies duties really is. In addition to the questions below, ask for a copy of the rental application they use to find out if its a generic document or custom tailored.

Get an idea of how much protection the management companies you interview will provide you with their screening process by asking the following questions:

Do they provide you with tenant information so you can approve or deny each tenant?

This may sound like a good idea but in reality it’s not. Tenant screening is what management companies do, it’s what they should be experts at, and it’s what you are paying them for. If you don’t trust them to perform this CRITICAL function then you should not consider hiring them. When owners get involved in the screening process the possibility of discrimination (well intended or not) goes up significantly. Fair housing violations lead to lawsuits that can cost thousands. This is a significant liability both for you and the management company.

Will they "hold" a property for a tenant, and take it off the market before a lease is signed? If so, do they charge a fee?

There should absolutely be a fee so that you are protected in the event that things fall through.

What systems do they have in place to protect against rental scams? 

Scams are becoming more widespread and more advanced. It’s not just Nigerian scammers, but local scammers who will copy your ad, break into your home, and show the unit so they can collect a "security deposit" and run. I'm not making this up.

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What methods do they use to screen tenants?

The more comprehensive the better. Former landlords should be contacted, income and employment should be verified, credit report run, application information verified for authenticity, personal references contacted, public notice (bankruptcy, eviction) search run, etc. There are so many tricks of the trade in this area and each manager will have their own time-tested methods. If they use a third party for tenant screening find out who and why they use them instead of doing it in house.

Which tenant qualifications are most important to them? Will they consider a tenant who meets their qualification is some areas but not in others?

Ideally, you want them bringing in people who are serious about their job or schooling. Remember that the less someone has to lose in life (money, family, career, reputation, personal pride), the less you can expect from them as a tenant. The eviction rate and tenant turnover rate on the properties they manage is a good indicator of how well they screen tenants.

Other Miscellanous questions to ask:

  • What do they charge tenants for the application fee?
  • Do they require the application fee be paid in certified funds?
  • Do they require each adult that will be renting to complete their own application?

Next: Examining the Organization - Background, Qualifications, Portfolio

Originally posted on managemyproperty.com under, "Tenant Screening"

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Re-Bloggged 3 times:

Re-Blogged By Re-Blogged At
  1. Terrell M. Turner Sr. 01/29/2010 01:52 PM
  2. Sidney Kutchuk 02/17/2010 09:40 AM
  3. Michelle Cooks 02/09/2013 09:44 PM
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Topic:
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Rainmaker
1,076,168
Wallace S. Gibson, CPM
LandlordWhisperer
Gibson Management Group, Ltd.

It is my policy to NOT provide a copy of the tenants' lease or credit report to the property owner.  I do not even download the credit report so that there are no records in my office to be misused or abused.  This policy is in my Resident Handbook. 

I have added GOOGLING the applicant's names and checking Facebook and MySpace...Most application fees are limited by state law and I prefer them in personal check so that I can establish that the applicant has a checking account which shows financial responsibility.

December 10, 2009 06:52 PM
Rainer
227,568
Diane Rice
SFR, SRES, CNC
Diane Rice, Rice Prprty Mgmnt & Rlty, LLC, South Holland, IL

Another good post for the property management group Jordan.  We are richer here as a result of good content like the ones you and others post!  Thank you!

December 12, 2009 06:03 PM
Rainmaker
374,441
Russell & Tracy Lee Parker
Experienced Broker & Property Managers Since 2006
RE/MAX Dallas Suburbs

I answered yes to all except the scam systems in place.

December 13, 2009 08:43 PM
Rainer
149,082
Eric Boyd
Broker, Property Manager - Jacksonville Property Management
Step One Realty, LLC, 904-469-6335

Great post, Jordan.  I'd be interested in knowing what "systems" are available to prevent the scams you mention.

December 18, 2009 12:22 PM
Rainmaker
564,887
Michelle Cooks
Pensacola, Pace & Gulf Breeze Property Management
Charles Stallions Real Estate Services

I am with Wallace although after today I will no longer download credit reports either. We run a tri merge as well as background checks etc.

February 11, 2013 05:25 PM
Anonymous
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Rainer
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Jordan Muela

Manage My Property
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