Out of the many, many tasks a Property Management company completes, Tenant screening is - hands down - one of the MOST important.
The people who end up residing in your property can make or break your investment and Fair Housing is not something you want to find yourself violating.
Finding high quality Tenants is vital and something we take very seriously.
We’ve developed a successful system here at T&H and wanted to share it with you so that you are aware of how we will screen potential Tenants that apply for your property.
So, after your home is made-ready, marketed, and showings occur, the goal is for applications to start arriving right away.
Someone has applied for my property, now what?
As soon as we receive an application and confirm the application fee has been paid for all applicants, it’s time for us to get busy.
Our Office Assistant will ensure the application has been filled out correctly and that there is no missing information.
If there are any issues, she will reach out to the applicant to get it resolved so we can move forward.
If everything is good to go, the application is sent to our third party processing company, Virtually Incredible.
In the past, we used to process applications in house.
However, in order to add efficiency to our system we decided to partner with Virtually Incredible in 2017.
Virtually Incredible has streamlined the application process for us and provides quick turnarounds: generally 2-3 business days.
VI conducts an extremely comprehensive screening, including:
Criminal background checks
Rental history checks
Another key part of the screening is the scoring system used by VI.
Using the criteria above, a score is generated based on the data provided by the Tenant and then verified by VI.
It’s black and white.
Your applicant either qualifies, or they don’t.
Note: We do not consult our Clients to approve or deny applicants. If they qualify, they are approved. If they do not qualify, they are denied.
Some will qualify but a higher higher deposit may be required, which we’ll discuss a little bit later.
In addition, we are not a first-come, first-served company. Meaning, in most cases, we do not simply take your property off the market once we receive an application. Our hope is to receive multiple applications and choose the one that best meets our rental requirements.
Not only does this system allow us to choose the best candidate, it ensures that everyone is treated equally and that we do not run into any Fair Housing issues.
T&H Realty’s Rental Requirements
We have a set of qualifications outlined on our website that we strictly adhere to. Any and all applications must meet the following requirements:
Must make 3.5 times the monthly rent
Must have a credit score of at least a 550 from Equifax
Must have a minimum of 5 years of rental history or 2 positive rental references
Any evictions must be at least 5 years old
Cannot have any unpaid rental debt
Any bankruptcies must be completely discharged
Must not have any felony convictions within the last 7 years, or ever been convicted of a sex crime
Increased Security Deposits
We also use this criteria to determine what the security deposit will be. VI uses a risk-based model, which means once the application is fully processed and scored, a correlated security deposit requirement is assigned to the applicant.
This security deposit could be as low as one month’s rent and as high as two month’s rent.
So let’s say an applicant meets all of our requirements and has great income, credit, and rental history, they’re obviously going to be charged only 1 month’s rent as a security deposit because they are very low on the risk spectrum.
Conversely, if an applicant has some “dings” on their background, but still meets all our rental requirements, they will score out with a higher deposit required. For example, if an applicant’s credit falls outside our top tier (and everything else is fine), they are required to pay a security deposit equal to 1.5 month’s rent.
Tenant Placement Guarantee
We have an extremely successful screening process.
Our less than 1% eviction rate (of Tenants that we place) can attest to that.
However, there’s never really an absolute guarantee that something won’t go wrong.
Sometimes an applicant can appear perfect on paper, but there are any number of things that can happen to a person that hinders their ability to pay rent, finish out the term of their tenancy, etc.
While we do our best to minimize these adverse events, they do happen.
That’s why we have implemented this guarantee: If, for whatever reason, we have to evict a Tenant that we place during the first six months of that Tenant’s lease, we will lease your home for free the next time.
We’re that confident.
As we noted above, putting the right person in your property is a major, major part of a successful real estate experience.
And proper screening, without question, is the single biggest factor in placing the right person.