Tenant Screening and Its
Critical Ingredients
Attracting the best possible
prospective tenant is the first step to selecting the best possible
tenant. Well, the type of prospective tenant you attract is largely
contingent on a number of factors. These factors basically include
the rate of rents, neighborhood, unit mix and your marketing
methods.
As far as I know, to attract a
prospective tenant, one should note first that the relationship
between a landlord and a tenant must be cooperative, and not
adversarial. Much like a shopkeeper and his customer, a landlord
and his tenant want to establish a long term mutually beneficial
relationship. It must then be based on respect for every person’s
privacy, property as well as the right to profit.
However, one should know that besides
a professional image, nothing should be more important than your
intuition or gut reaction about a prospective tenant.
Unfortunately, relying mainly on your perceptions or worse yet a
manager’s first impression is no way to run a business. It is even
more no way to determine who will be a responsible tenant.
Oftentimes, the tenant may appear to be more financially capable and
more substantial than he truly is. With this fact, perhaps the
best tip that I can give you is to always check your prospective
tenant out no matter what your gut reaction is about.
Application: The Backbone of Tenant
Screening
As often said, the application is the
backbone of tenant screening. It is particularly designed to force
a prospective tenant into providing the most vital information
accurately. It asks the applicant the most important questions, but
much to it, an application has been created to eliminate any
possibility of errors or omissions. This even minimizes
confusion.
Having said all these, a proper
application form must then be used. Perhaps the secret to reading
a prospective tenant application is to determine inconsistencies.
Essential Factors for a Successful
Tenant Screening
There are several factors that are
mandatory for a successful tenant screening. These include the
name, social security numbers, birth information, driver’s license,
address, banks and savings accounts, etc. Since, they are crucial
to the success of a tenant screening, then there’s no reason for us
not to consider them. Let’s take a look at each of them.
Name
Name is the most obvious criteria for
tenant screening. However, this is often left partially
incomplete. Well, one specific rule to note when considering a
background check, like tenant screening, is to provide a full,
complete and current name. This is mandatory for every resident.
And, since the main presumption is you may have to ultimately sue
for possession and back rent, it must be clear who the responsible
parties are. So, when reviewing the name block on the application,
make sure that it is properly spelled and a middle name is
included. Also, make sure that the nicknames or aliases are also
included.
If for instance, a female tenant is
the applicant, it is necessary to obtain her maiden name as well as
any former married names. Obviously, this will help you to obtain
the proper screening report on the right person.
Besides the tenant’s name, the name
and complete identification of the children and other occupants also
play a very important role. As you may know, children may move in
as minors, but time will come that they may be evicted as adults.
In addition to this, complete names of children may be a big help
for you later, especially when you are trying to find out delinquent
tenants for collection purposes.
Be sure the name of the primary
tenant is clear as to generation and gender. Note that confusion,
whether it is intentional or not, is one of the most significant
factors when evaluating a prospective tenant. Thus, if certain
confusion appears, particularly over generation, it should be
clarified between junior or senior or a II or III generation. As
to gender, it is not always clear if the delinquent tenant is male
or female. This can also be of great help for a private
investigator researching a debtor’s assets.
Here are other possibilities that may
create confusion:
-
Use of a nickname in the name
block.
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Inconsistency of the surname.
For example, if a child from a previous marriage is included as
a tenant, his or her surname may not be consistent with wither
of the adult applicants. Clarifying the origin of the child’s
surname may help you locate a delinquent tenant at a later date.
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There are some instances when an
unmarried couple uses the same surname on an application to
appear married. If you know a couple doing this, see if the
surname is consistent with the accompanying documentation.
Moreover, if you are dealing with a
commercial property, be sure that all of the various business names,
fictitious business names, DBA’s, and corporate names are included
along with the responsible individuals. Note that all of the
business names used by the individuals can be verified through
public records or perhaps through an information provider.
Social Security Number
Other than the tenant’s name, the
social security number has long been deemed as the most important
piece of information required for tenant screening. So if possible,
try to confirm the social security number by checking and
cross-checking as many ways as possible. If the SSN is available,
ask for the SSN of your prospective tenant and compare it to the
number provided on the application. Be careful though to check for
transposition of numbers, as well as for inconsistencies with the
name.
One particular hint here is to look
for an application form that breaks down the social security number
into three groups. Experts often say that this will likely
minimize the possibility for errors, omission, as well as
transpositions of the social security number.
Ask for the prospective tenant to
give you a copy of his or her pay stub or his or her most recent W-2
Form. Then, compare the consistency of the social security number
with the one indicated on the application.
Once you are satisfied with the
evidence, showing that the number provided may be legitimate, it’s
now time to examine it even further. While a number of people may
not be able to give you with a copy of their social security card,
always note that a counterfeit social security card can now be
bought for as little as $40.
The next step to take is to
understand how to read a social security number. In the first
place, a social security number is always broken into three sets of
numbers. Except of a few numbers issued to the military during the
mid 1970s, all the social security numbers contain the digits.
Those that were issued with ten numbers all start with zero. The
first three digits mainly indicate where the card originated from.
So, if for example, a number originates from Montana and the
prospective tenant shows previous addresses from New York and
Florida, then claims to be born in Texas, and is now applying to
rent your apartment in California, then there may be a problem. If
this kind of situation occurs, you must be smart and play
detective. You can ask the prospective tenant what particular
state they received their social security card.
Furthermore, if you have a
prospective tenant who provides you a social security number with
the area number not corresponding with any of the fifty states,
assume that this is a fraudulent social security number. So send
that tenant on his way.
Birth Information
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Date of Birth
– Although a fairly simple request, the tenant’s birth date is
often incomplete and inconsistent with other information. It is
then necessary you obtain a complete date of birth – of course
with the month, day and year. This is very important as very
often this is the only thing to differentiate people with
similar or common names. Another thing is that, be sure that
given date is consistent with all other information. If
possible, compare it to a driver’s license and any other
information available.
-
Place of Birth
– This is but another important thing to
consider when conducting tenant screening. The city and state
or county of origin is very critical for verification as well as
additional cross checking, or for other evidence. One should
always remember that every piece of information must be
consistent with every other. The tenant’s birth place may
reflect an inconsistency with the origin of the social security
number or list of previous residences. And, an accurate and
complete birth place will help you locate relatives in case the
need arises to locate the tenant for collection purposes.
-
Mother’s Maiden Name
– Along with the date and place of
birth, the mother’s maiden name can also be useful in
determining the tenant’s consistency and honesty. It is often
said that knowing a mother’s maiden name can be the most
important piece of the puzzle when searching for assets. Of
course, it helps you to confirm the applicant’s background, but
more to it, a mother’s maiden name may be the difference in
finding out assets and detecting fraud.
Driver’s License
Note: Bona fide picture
identification is a crucial part of an application package. Well,
typically, a driver’s license is the easiest to obtain. Outside
from the apparent advantage of a photographic comparison with the
prospective tenant, a driver’s license is a wealth of additional
information to help with cross checking for accuracy. It is even
more useful for locating the tenant in the future.
Here’s what you can do:
-
Cross check the complete name on
the license with the name on the application and other
information provided. Just find out is the name is the same, if
it is spelled the same, or is the middle name or initial the
same.
-
Cross check the address and date
of birth with the application and other identification. This is
to insure consistency. Along with this, be sure that the
physical description approximates the photograph and describes
the prospective tenant in front of you.
-
Note that the driver’s license
number is the most necessary piece of information on the
license. So, if a photocopy machine is not available, be sure
that the number is included on the application. Note that the
driver’s license number may also be an excellent tool to help
you locate a bank account in case there’s a need to locate
assets for collection purposes.
Address History
On the most basic, the importance of
an address history cannot be over stated. When it comes to fraud
detection, confirming an address history at the period of tenant
screening may be the one fact that cannot be recreated from the
person whose identity may have been stolen.
If for instance you suspect that the
address history of your prospective tenant is inconsistent with the
other documentation provided by the applicant, then simply ask for
copies of the tenant’s old checks, tax returns and other evidences
that could confirm the given addresses. In addition, the screening
report should provide an address history which is consistent with
that indicated on the application.
Now, if the address history provided
is accurate, then such information may be very helpful to an
investigator searching to locate an evicted tenant.
Bank and Savings Account
Experts often say that a prospective
tenant who does not have a checking account is red flag, something
that needs immediate action. He is probably a very high risk
tenant. There is a possibility that they could not obtain an
account due to improper identification, illegal alien status or
other account was closed by the bank for bouncing too many checks.
So, landlords must beware.
Assuming your prospective tenant has
a bank account, try to check it out. What you can do is call the
bank to confirm the funds and then ask for an account rating. Most
banks will actually indicate when the account was opened, the range
of their average balance, and then cross check if the check they
have given you is good. Never let them move in until you have
obtained this information.
One thing to note here is that the
existence of a bank account is an indication of stability and
responsibility. It is also an indication of where to proceed to
levy money in case the tenant gets evicted for defaulting on the
rent. So if possible, confirm the bank account information every
month when the rent is paid. This will ensure that your records are
always kept current and will even flag a possible adjustment in
responsible parties.
Tenant’s Employment
When we say employment, we are
somehow referring to the source of income. Accordingly, the source
of income insures your security in renting to a prospective tenant.
So, the first step that you can take is to be sure that the complete
company name, address and phone number is given. Also, the
supervisor’s name, pay rate, and the length of term of employment
are all important pieces of information that must be checked and
confirmed. And, if your tenant works for a smaller company, it is
equally important to confirm his employment.
If your tenant claims to be
self-employed or an independent contractor, simply ask him to
present some proofs. Ask for a license or a business card, and
check with the governing agency or private information provider to
find out if the license is active and in good standing.
Criminal Background
Knowing the rising crime in urban
areas, the property owners must then be concerned with introducing a
dangerous or undesirable tenant into their building. As a property
owner, you must protect your prospective tenants as well as your
investments.
There are also some criminal records
that you can access for tenant screening. Nearly all of them are
public and perhaps the easiest way to access them is through your
tenant screening provider. Your provider may access information
from different depositories throughout the country.
However, before ordering a criminal
background check on a prospective tenant, it is somehow important
that you have sufficiently checked the application. Once you are
satisfied with the information given, you can request the criminal
background check from a certain county or state.
References
Finally, obtaining references on a
tenant application is vital for a number of reasons. At first
glace, references may seem worthless, unless they are checked out.
As far as I know, the most important reference is the current or
previous landlord. So if your prospective tenant is moving across
town or country, they must have lived somewhere else. Call the
former landlord and ask about the types of tenant they were,
including their payment habits, and if they did the rules and
respect the property.
Other useful references could be the
tenant’s friends and relatives. They are equally important in the
event of an emergency or need to locate the tenant after they have
moved out. These references are also the key to any collector
performing skip tracing on a tenant that left owing you money.
So those basically are the most
important ingredients of a successful tenant screening. The most
important thing to consider in general is to make sure if all the
given information are accurate, consistent and reliable. As a
landlord, you must then be very smart and learn to play detective.
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