Property Manager – Lake Balboa
Tenant Screening Factors More Accurate Than Credit Scores
by Kassandra Rose
These days, landlords and property managers are often content to assess a potential tenant based only on the renter’s credit score and income. It’s a practice that has led to far too many bad deals for landlords, and it needs to stop.
A renter’s credit score will vary from one credit bureau to the next. An applicant could have a score of 720 from TransUnion and 668 from Experian. These companies have different ways of calculating credit scores, and neither is necessarily right. That’s why mortgage companies typically pull scores from all three major credit bureaus, and often settle on the middle score or the average of the three.
The point is that a renter’s credit score is just a score. After the 2008 housing crash, millions of Americans watched their credit scores plummet. Did that mean that they suddenly became unworthy of renting? No. Many had steady jobs, families to feed, and the ability to pay their bills. Their credit scores were not reliable indicators of their value as tenants.
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Digging Deeper Than a Renter’s Credit Score
It’s possible to make a reasonable assessment of an applicant without relying solely on the renter’s credit score. If you read the full credit report (making note of one-time losses or ongoing abuse); ask the right qualifying questions; and collect the necessary supporting documents, you should have everything you need to make a confident decision about whether to accept a prospective tenant’s application–regardless of the renter’s credit score.
To make the most accurate assessment and find the right fit, keep these four qualities in mind:
Honesty
Look for people who are willing to share the good, the bad, and the ugly with you. If a renter is open and honest, you can work toward finding solutions and housing options that will fit their true needs–and yours.
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Consistency
Look for renters who do what they say and say what they mean. This starts by considering some important questions.
Did the potential tenant show up on time to tour the property, or did you get a no-show and a lame excuse about traffic? Does the renter’s credit score reveal that they pay their debts on time, or do you see lots of late payments? Did they fill out the application when they said they would, or did you have to remind them multiple times to get it done? If you see hesitation, backpedaling, or unreasonable excuses, pause and really reconsider this person before moving forward.
If an applicant seems inconsistent after the first few interactions, would you rely on them to report repairs needed to your property? What about paying their rent on time? The best renters respect landlords, pay on time, and are consistent in their communication efforts if a setback does occur.
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Verifiability
Make sure that you can verify what an applicant tells you. Are they moving from out of state for a new job opportunity? Great! Ask for an offer letter from their employer on the company’s letterhead. Call their new supervisor, and verify their start date and income. This information should match the letter.
Want to know how they’ll treat your rental? Ask for the phone numbers and email addresses of previous landlords, and cross-reference these with public information to ensure that you’re actually talking to a property owner–not a friend pretending to be a landlord.
No pets on the application? Ask if they “accidentally” forgot to list a pet. Feel free to take a look at any public social media accounts to see whether you discover photos of them playing with furry companions as they check in at the dog park.
You aren’t just a landlord at this point; you need to put on your detective hat and gather all of the necessary information to verify that what potential tenants are telling you is true.
If you can’t verify, then deny.
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Patience
This is for you. There are more renters than inventory, so practice patience. Take your time interviewing, and don’t let anyone rush you into a deal.
People in a hurry to get answers are those who tend to “forget” to send you supporting documents, or who send items from years ago that are irrelevant today.
If you slow down and a potential renter starts demanding that you make a decision quickly or he’ll go elsewhere, let him go. There are plenty of well-prepared, even-keeled humans coming along. You don’t need to be bullied or rushed into anything. This is your investment property, and you have every right to protect your assets in the best way that you know how.
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Just remember: People are more than their credit scores. A renter’s credit score is merely a snapshot of a moment in time. It can certainly be a great way to start your evaluation of an applicant, but it shouldn’t be the only factor you consider. Remember these four traits to find a tenant who will treat you and your property with respect.
From: https://www.allpropertymanagement.com
Carnahan Property Management Services Woodland Hills,West Hills,Bell Canyon, Hidden Hills, Calabasas, Canoga Park, Tarzana, Reseda, Topanga, Encino, Northridge, Van Nuys, North Hills,Chatsworth, Sherman Oaks, Studio City, North Hollywood, West Hollywood, San Fernando Valley, Granada Hills, Mission Hills, Simi Valley, WestLake Village, Agoura, Toluca Lake, Valley Village, Burbank. Call us at (818) 884-1500.
