The idea is to land the best tenants for that San Antonio apartment building, but the process can be unnecessarily challenging if you accept some of the persistent tenant screening myths we regularly see online. Here are eleven of them.
1. Paying Rent on Time is All That Matters
There’s no question that it’s vital to have tenants in San Antonio that pay the rent when it’s due. That’s why you want to check their credit and rental history and ask them about where they work and for how long.
But there are other crucial items to weigh. When you interview the prospective tenant, see if he or she is professional, friendly, and reliable. Of course, you can’t always read a person accurately in just one or two meetings, but most of the time you can get a good feel for the prospect if you ask the right questions.
2. If They Have No SS#, You Can Always Deny Them
A Social Security number is necessary to obtain their credit report. Some people might not have one, though. For instance, individuals living in the country temporarily, such as a worker in the states on a visa, won’t have a Social Security number.
In that case, the person should be able to provide an Individual Taxpayer Identification Number, which will be sufficient to get a credit report.
3. You Can’t Deny an Application if the Person is in the US Illegally
Under the Federal Fair Housing Act, landlords and property managers have the right to request proof of US citizenship. You’re allowed to do so with the Form I-9 provided by the US Citizenship and Immigration Services Department.
But you have to ask all potential tenants for proof of citizenship. You may not pick and choose who to ask, because then you’re breaking the law.
4. “It’s Just A Small Pet”
The prospect has a small dog that meets your requirements, and you’re inclined to approve the owner. But you have to remember that dogs are dogs, no matter how small.
Dogs may permanently stain your carpet, scratch walls and floors, and bark endlessly when the tenant is at work. Pets can become a severe maintenance issue and may upset neighbors if they make constant noise.
5. “They Have A 750 Credit Score”
Credit scores matter when deciding how likely the tenant is to pay on time. But even if their credit score is off the charts, you should still dig deeper.
Just because the person pays every bill on time and carries no debt, that doesn’t mean they won’t have parties at 1 a.m. on Tuesday. Nor does it mean they won’t punch holes in the drywall. It’s vital to get a better idea of who the tenant is during an interview.
6. You Should Pay for the Credit Check
Most states allow the landlord or property manager to charge the tenant to do the credit check. This fee pays for the inquiry and how long it takes you to do the work. The price usually is between $30 and $50. You shouldn’t pay this fee.
7. You Have to Accept the Credit Report the Tenant Gives You
If a prospect is submitting applications to several apartment complexes, they may not want to pay for a credit report check for every one. Instead, the person may carry a copy of their report and give it to you.
But in many states, you’re not obligated to accept it. In Texas, you can ask the tenant to pay the credit check fee for a new report.
8. Anyone Paying is Better Than a Vacancy
If you don’t have many prospects right now, you might be tempted to take a tenant who is only working part-time. After all, getting someone in there at all is better than letting it sit empty, right?
Not really. Vacancies cost the owner an average of $1500 per month, but an eviction runs more than $3,000. Rushing a tenant’s approval might result in nasty conflicts within a few months: over nonpayment, property damage, or fights with neighbors.
In the worst case, you could take on a non-paying tenant who trashes the apartment and squats without paying for months. Then you’d have to pay for a long, expensive eviction process. Is taking that subpar tenant such a good idea?
9. Talking to One Reference is Enough
It’s wise to contact the prospect’s references so you can understand better who they are and how they might behave when they rent from you. Calling just one contact might not give you enough information, though. It’s tempting to rush this process, but you shouldn’t.
It’s critical to call all the references and check with the person’s employer to see what kind of person he or she may be.
10. Checking Their Credit Dings Their Credit Score
Some prospects may worry that the credit check could damage their score. But that’s not necessarily true.
In truth, a “hard inquiry” credit check with a Social Security number can temporarily lower a person’s score. But you also can request a “soft” credit check that the prospects do themselves. In that case, a “soft pull” attaches to the report, so the credit score isn’t affected.
11. You Are Allowed To Judge A Book By Its Cover
Well, this is acceptable only as long as you judge every “book” the same way. It’s against federal law to discriminate when you screen tenants. For example, if you ask only certain people for a credit check or quote a higher rental fee to some prospects based on their age, gender, or ethnicity, you’re breaking the law.
Thus, if you research one rental prospect, you have to do the same for everyone. Tenant screening is a critical task of being a landlord or property manager. If you rent out apartments or houses to the wrong people, you could be on the hook for thousands of dollars in damages, lost rent, and eviction costs.
As long as you follow a comprehensive tenant screening policy, all should be well. When you find a respectful tenant who pays on time, you’re unlikely to have trouble down the road.