How to Screen Tenants as a Property Manager in Baltimore County

Choosing the right tenants to occupy your rental property makes the difference between having a carefree, successful property management experience and one that can quickly become a headache. Thankfully, there is a dedicated process for screening tenants that will filter out applicants who will damage the property or cause inconveniences. Understanding this process and properly executing it will set you up for success as a property manager in Baltimore County.

Rental Application Pre-Screen

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Think of tenant screening as a filter that gradually removes poor applicants throughout the screening process, leaving you with candidates you can be reasonably confident will provide a good renting experience. To begin, a property manager in Baltimore County uses a rental application as the initial filter. A rental application is an opportunity to let potential tenants know about your screening process and deter anyone who doesn’t fit the qualifications needed. It is also a way to gather important information pertaining to the applicant such as basic contact information, income, and employment. When the applicant signs the application, they grant you permission to run a background check, credit check, and contact references. Be sure to mention this in the application as well as any other steps or stipulations that they should expect from the rest of the screening process.

Background Check & Credit Report

Property managers in Baltimore County are going to want to run a background check and credit report upon receiving confirmation from the rental application. This step is crucial in indicating any potential complications before they occur by looking at the applicant’s criminal history, if any, and credit history. The credit report will show the applicant’s payment history which will show if they pay on time or have a history of late or unpaid payments. If their credit score is below 700, it is important to consider a co-signer requirement. Another thing to carefully consider is their debt-to-income ratio. This is a clear indicator of the applicant’s ability to manage the additional expenditure of rent with the expenses that they currently have. 

Verify Income and Employment

An essential step in tenant screening is verifying the validity of their income statements and checking that their place of employment is accurate. A general rule of thumb is seeing if the applicant’s gross monthly income is three times the rent. If so, they should be able to comfortably afford the listed rent cost. You can use pay stubs, bank statements, or tax returns to verify their income with official documents. Finally, in regards to employment is job stability. If a tenant loses their sole source of income, they will most likely be unable to continue paying rent. Check their employment history to get a good indication of their job stability.

Check Rental History of Applicant

Gaining an understanding of what the applicant’s future as a tenant holds means looking at their rental history. Verify the address that they listed as previously rented and, if possible, contact their previous landlords. Talking to someone who is also a property manager that experienced the applicant as a tenant will almost certainly grant you insight as to what that applicant would be like as a tenant. Ask if they took good care of the property, if they had complications with neighbors and if they consistently paid their rent on time. The more of the applicant’s previous landlords you can talk to, the better your understanding of their potential as a tenant becomes.

Screening Questions

After you have thoroughly gone over the application, rental history, and financial situation of the applicant, it is time to ask your screening questions via an interview. While conducting the interview, it is a good chance to get to know the applicant on a more personal level and clear up any complications they have with their application up to this point. It is extremely important to keep the screening legal and not discriminate against gender, race, religion, or nationality. It is illegal to ask inappropriate questions or reject someone based on discrimination. Become highly knowledgeable as to what is considered discrimination by the Fair Housing Act to avoid any legal problems.

Make a Decision on the Tenant

If an applicant has given you enough proper reason to reject their application before the interview, then you can reject their application without conducting an interview. If you have properly reviewed the prescreen application, conducted a background check and credit report, verified their employment and income, checked their rental history, and conducted a thorough interview, you should have more than enough information to determine whether or not a specific individual would make a good tenant. Make your decision based on the facts and not on personality. Also, remember that it is much easier to deny an applicant than it is to evict a bad tenant. If you should choose to deny a tenant, there are certain steps that you are legally obligated to take as a property manager in Baltimore County.

Fair Credit Reporting Act Laws for Denying an Applicant

If you decide that you are going to deny an application then you must follow the guidelines stated by the Fair Credit Reporting Act (FCRA). You must supply the denied applicant with a response known as an adverse action letter. This shows the applicant why they were denied due to their credit report. This includes not having enough income to pay the rent, a criminal history, low credit, previous evictions, or unverifiable employment. Before you deny an applicant, be sure to check that all of your information is correct.

Property Manager in Baltimore County You Can Rely On

If you are searching for a property manager in Baltimore County, be sure to choose one that will only source the proper tenants to occupy your property. At Premier Property Management, we use our decades’ worth of combined experience to facilitate a tenant screening process that selects only the best possible applicants. We understand the difference that having a respectable tenant makes in the property management experience. Call or contact us today to see what Premier Property Management can do for you and your property.

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