Updated: Mar 20, 2021
One of the most important steps in the rental property business is finding a reliable and qualified tenant for your property. Screening applications and running background checks manually take time and effort and that is where screening services come. These services make sure that you do not make the common mistakes new landlords make every time they bring a new tenant.
The reason one need to efficiently screen these applicants is that bad tenants usually cost a lot in the long run and at the same time become a pain instead of relief. Bad tenants cost in terms of damage repairs, thus an increased maintenance budget as compared to good tenants who do fewer agreement violations and a lot lesser damages in the property.
The cost adds up considerably, especially in a multifamily property where the number of units is more than a few. As a result the profit decrease just because you made a mistake during screening. This is the reason we prefer using screening services to make sure we bring good tenants and ensure a steady cash flow.
To avoid potential discrimination issues, make sure you educate yourself on all fair housing laws whether that be local, state, or federal laws. Furthermore, devise a list of screening criteria that will be applied to all the applicants equally without discrimination. This will filter out all the tenants that do not fit your minimum requirements in each criterion you have set. This will strictly be not subjective and will save you from any discrimination claim applicant may come up with.
Here are some screening reports you may want to use.
Screening Reports Types
These screening reports are used to find out about the rental history of the applicant and their financial responsibility. You can access this information online by using the information provided to you by the applicant via the application they submitted.
Eviction Reporting: Tenants screening services do check eviction reports which are usually included in the credit reports. However, these reports need to be verified as eviction is a time-consuming process and can potentially cost you rental profit. Checking applicants’ eviction reports give you information on their eviction history and save you time and money in the long run.
Criminal Reporting: Landlords are legally allowed to deny applicants based on a crime they were convicted of is compromising the safety of the property and fellow tenants in case of multifamily properties. This is a complicated one as there are tons of people out there with similar names and there is a fair chance that someone with a similar name to the name of your applicant is convicted of a crime. But, according to the fair housing act, landlords cannot use a blanket policy to deny each and every applicant a criminal record.
Credit Reporting: This is the most efficient report when it comes to finding the financial responsibility of an applicant. It gives you FICO Scores, debt obligations, and all the credit information you need to process and find out how responsible the applicant is financially. There could be exceptions to some but a poor credit score is considered a big No when it comes to landlords who use credit reports for screening.
How to Choose a Screening Service
Before you jump into the screening process. Make sure you choose the screening service that suits you the best and fulfills all your requirements. Here are some important points to consider before making a decision.
Time: Tenants usually apply to multiple properties. That means time is a decisive factor here for a qualified applicant to occupy your property. How fast a service is, matters the most, if you are looking to bring great tenants. A slower screening service process will delay the process and tenants might opt-in for another property instead.
Support: Two-way communication is of great importance when it comes to services. You need to consider support when you are choosing a service. If a screening service provider cares about your business, they will provide great and fast support with a two-way communication channel and solve your problems quickly.
Data Quality: Screening is made entirely on the data you receive. Poor quality data worth nothing but is a waste of time. You need quality data so that you can make better and efficient screening to find the best tenants among the applications you receive. The data should come from a credible credit bureau with complete credit history.
Friendliness: Some screening services ask for the personal information of your tenants. This should not be a problem but if it is for you or your prospective tenants, you need to find a service that lets them enter the information themselves. This way, the screening service may earn their trust and be friendly and trustworthy at the same time.
You can add further add more criteria that suit you and your property. Now let’s move to the best screening services you may want to use.
Here are the best screening services.
Multifamily Intelligence provides a wealth of information about multifamily properties and everything related to it. Read more articles to educate yourself. Here are the top screening services that our members have been using.
Tellus free tenants screening tool gives you an overview of applicants’ financial background and their financial status. Tellus is loved among landlords for their awesome customer support and that is why Tellus is one of the fastest-growing services in the market.
Another one and perhaps one of the smartest services is MySmartMove, which is owned by TransUnion. The way it works is what it makes it different. MySmartMove contacts the tenants and asks them to go through a very convenient process. Tenants do it themselves and pay MySmartMove directly without involving the landlord. So you, as a landlord won’t have to go through all that hustle.
For some landlords overdoing is boring but others absolutely love it. Buildium handles almost everything that comes under the umbrella of property management. So, this proves to be an all-in-one solution for investors who manage many properties. Buildium is dedicated to making the tools better and better to make processes easier for landlords.
RentPrep likes to keep it simple. It provides you screening for a very reasonable price. RentPrep runs background checks and credit checks. It goes one step further to verify the information by calling the references provided. This is why among landlords RentPrep is highly recommended.
Cozy is one of the fastest services in the market. And it not only provide applicant’s screening service but takes care of them for you after they occupy your unit. It tracks expenses for you, collects rent and even markets your property. Cozy users claim it can process applications in a matter of few hours. Cozy makes screening Cozy.
AppFolio is best for those who are looking to scale their real estate investing business. Good things comes with a price and so does AppFolio. It seems to be a bit pricy but when you have many properties, it can save you a ton on management by providing you a set of tools that takes care of too many things for you. Eventually, it will become the backbone of your property management.
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