With the median home purchase price in New Hampshire a staggering $450,000, more people than ever are choosing to rent over buying. With more people competing for rentals, landlords face an ever-increasing number of applicants.
While having more applications may seem like a blessing, it also signals a greater need for tenant screening. The screening process does so much more than narrow down your choice of tenant.
Screen your tenants and enjoy these five benefits.
1. Protect Your Property
When you use a tenant screening service, you protect your property. Standard screening includes a tenant background check. This gives you a clear picture of the tenant's credit report, eviction history, and criminal record.
You may choose not to approve an applicant with a recent criminal record or one with specific convictions. Or you may avoid renting to someone who does not get a positive reference from past landlords.
Tenant screening reveals possible red flags that could signal a problematic tenant.
2. Reduce Turnover
When you place stable tenants in your rental, you reduce tenant turnover. The tenant screening process can reveal signs that an applicant may not stick around. For example, they may have a history of evictions or moving frequently.
They could have an unstable employment history where they have a new job every year. These are all signs that the person does not stick around long. It makes them more likely to not stay long-term in your rental.
3. Confirm Their Financial Status
Your tenant screening process should include running the tenant's credit score. The credit score and report will tell you their ability to pay their rent. If the tenant is financially irresponsible, they will be less likely to pay their rent on time for the length of the lease.
Look for late or failure to pay reports from other creditors. A high debt-to-income ratio is also a sign of someone struggling financially.
4. Reduce Evictions
Having to deal with evictions is time-consuming and expensive. Avoiding eviction begins with your marketing strategy. With the right marketing, you can attract high-quality applicants.
The second phase of reducing the occurrence of eviction reports is thorough tenant screening. You can avoid approving someone with a history of evictions.
5. Legally Deny Applicants
All landlords must comply with New Hampshire's fair housing laws. You want to attract high-quality tenants, but you cannot do so by illegally denying applicants.
The Fair Housing Act protects applicants and tenants from discrimination based on a protected class. This includes race, class, sex, age, religion, familial status, gender identity, sexual orientation, and marital status.
A screening process ensures you deny tenants for reasons that do not run afoul of the Fair Housing Act.
Improve Your Tenant Screening
It is time to start screening tenants. This crucial step of the property management process protects your real estate investment, reduces tenant turnover, and reduces evictions. A tenant screening system also protects you when legally denying an applicant.
The team of property managers at PMI Green Rock can help you establish a legally compliant and thorough tenant screening process.
Schedule a consultation with our team of property managers to benefit from a tenant screening process.
