Written by: Eric Davis
The Global pandemic of 2020 has caused major disruptions in work and in all other aspects of life. For more than a year, social distancing protocols and lockdowns have sent people on belt-tightening mode. Commercial space leases were not renewed. Single renter’s preferred to move back in with family. Employers have freeze hiring, so there’s no need to find places to rent that are near work.
However, industry experts predict that the industry will bounce back. As more people get vaccinated, many businesses are likely to re-open. With that, we look forward to the re-opening of the economy. The latest strides in vaccine development can now allow us to breathe a little easier.
Real Estate industry upscale.
Potentially, the real estate industry can expect:
● A comeback to the office – people are coming out of working from home and going back to the office.
● Growth of subleasing opportunities – as businesses go through changes, they want to remain flexible and not stuck with the financial responsibility of an inflexible lease.
● Increase in short-term leases – businesses are looking to increase flexibility when relocating their operations or expanding their commercial lease portfolios.
● Warehouse space leasing – businesses will need additional warehouse space as the online business grows significantly.
With these trends to look forward to, things are certainly looking up for property owners, landlords, and property managers. One of the most critical steps in the whole lease cycle is tenant screening. A landlord-tenant relationship should be as smooth as possible, and screening is where landlords get to find out if the potential renter is likely to be a good fit. Yes, as a landlord or property manager you would want to fill a property vacancy as soon as possible, but DO NOT skip this step.
Maybe it has been a while since you’ve had to screen tenants. You may not even be sure that your guides and screening processes are up to date. Don’t worry! We, at Davis Property Management, get you. If you need a refresher, here are 5 steps along with some tenant screening tips and tools to help you fill you’re rental faster.
1. Prequalify tenants
If your property has been vacant for quite a while, it could be very tempting to accept the offer of just about anyone who expresses interest. But just like hiring a new employee, this is the perfect time to start the screening process.
When starting the screening process, craft careful questions and always be fair. Your questions should never be misconstrued as discriminatory. Remember, the Fair Housing Act prohibits discrimination by direct providers of housing, such as landlords and real estate companies as well as other entities, such as municipalities, banks or other lending institutions and homeowners insurance companies whose discriminatory practices make housing unavailable to persons because of:
● race or color
● national origin
● familial status, or
It’s best if you create (and stick to) a script that has neutral questions and has been vetted against the Fair Housing Act. Better yet, let them ask the questions at the beginning of the tenant screening. Keep your answers factual and stay focused on the standout features of the property and its many amenities.
From this pre-screening exchange, you can glean enough information. Qualified renters move on to the next stage. Non-qualified ones should be sent communications (a letter, an SMS, an email) advising them (very politely) that their application has been rejected.
An official document for potential tenants.
However, do not discount applicants instantly. Some applicants might not be right for the property due to a mismatch in requirements. For example, they’re a family that needs 5 bedrooms when your property only has 3. Save their details in case you may have an available property that meets their needs.
2. Meet up with the applicant
Applicants may not be comfortable doing over-the-phone interviews or they might not be big fans of having to fill up pages and pages of screening questionnaires. So, try to meet up with applicants for a brief chat. This will let you get to know them a bit more.
3. Carefully evaluate their application
Remember, the Fair Housing Act? It’s important to treat all applications equally and to use the same criteria for each and every applicant. Check for inconsistencies. Remain objective while assessing applications.
4. Don’t forget to check their references
We all fib a little. While it is not a crime to lie on a tenant application, it raises a lot of red flags. As a landlord or property manager, you should always do a background check, especially a criminal background check.
5. Request a credit report
A credit report should not be the sole basis of your decision to accept an application or not. Use it as a guide in making informed decisions about tenants’ applications.
If any issues should arise from your background check or from the credit report you ran, it is only fair to give the applicant the opportunity to explain their circumstances before you reject their application.
Process for making a definite decision.
If you do get a lot of applications, most of them will look like the perfect fit for the property. You can accept applications on a first-come, first-served basis, to make screening easier. Or you can streamline your decision-making process by having a set and standard criterion – and stick to it. For the sake of fairness, you might want to share your criteria with applicants, so they understand how their application is being assessed. Transparency also shows that you apply the same standards for all applications.
Use the information you gathered from steps 1 to 5 in order to decide the best and most qualified renter. Once you’ve made the decision, it’s time to sign the lease agreement. But before you do, don’t forget to discuss the rules and regulations and review the contract stipulations with your new tenant. If you both agree on the terms, have them sign the copies (at least 2).
Here at Davis Property Management, we simplify the tenant screening process and make sure to adhere to the most up-to-date screening guidelines. If you need guidance on streamlining your screening process and lease agreements, give us a call at 425-658-7471 or email [email protected] to schedule a consultation with us.
Davis Property Management
At Davis Property Management, we provide fast, friendly, and professional service tailored to your individual property management needs.