Tenant screenings: Who should pay and what to do with the information

Geoff Roberts
| 4 min. read
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Published on December 21, 2009

As we’ve stressed several times throughout the course of this blog, here at Buildium we’re huge proponents of tenant screening. While some situations can’t be avoided and there’s always an exception to every rule, tenant screening is certainly one of the most sure-fire ways to guarantee that tenants with the most potential to be problematic never make it to move-in day. For basic information on tenant screening, we hope you’ll check out this previous blog post. And now we’d like to get into some of the more specific tenant-screening topics, including who should pay for tenant screening and what you should do with the information once you’ve received it.

A couple things to keep in mind first, though. When seeking out the appropriate tenant verification solution for your property management business, you want a system that is both robust (in other words, it will provide you with a complete picture of potential tenants’ credit and criminal records) and secure.

Who pays?
This is one of those questions that doesn’t have a single answer. Ultimately, it is up to you whether you or your tenant pays for the screening process. The simple answer is to have tenants pay because, obviously, costs for screenings can add up quickly. Keep in mind, however, that because competing property managers may not have tenants pay for screening, you risk losing potentially good tenants who are looking to save a few bucks during the application process.

If you do opt to bear the costs of tenant screening on your own, it stands to reason that you will want the most thorough option available, without sacrificing accurate information. In our business, we’ve talked with a lot of property managers and know that smaller landlords can have a difficult time keeping up with more expensive resources larger property management companies have access to. Which is why we’ve formed a partnership with one of the nation’s top credit reporting companies, TransUnion. Property managers can access TransUnion services directly through Buildium property management software, enter in quick identifying information (such as an applicant’s Social Security Number), and receive all the credit and criminal record information necessary to make an informed decision. Best of all, there are no hefty monthly fees to contend with. This system allows you to pay only for the records you access, avoiding set-up charges and other hidden fees.

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What do I do with the information?
There is both a literal and more figurative answer to this question. First the literal, which may sound obvious but bears repeating, nonetheless. Remember that the information you receive throughout the course of a credit check is personal, confidential information. It’s extremely important to protect potential tenants’ information, even if you do not end up renting to them. Make sure any credit check information obtained is either carefully stored in a tenant’s secured file (accessible only on a must-have basis) or, if you do not rent to the tenant, destroyed. Some landlords pass credit check information directly off to the potential tenant in question so that he may decide what to do with this information, whether that be destroying it or keeping it in his own personal records.

On a more figurative level, once you obtain tenant screening information, you should carefully consider it and weight it against other factors. For example, a tenant who has a clean credit and criminal record but questionable references from previous landlords may not be your best bet. On the other hand, a potential tenant who turns up a report with a mark or two against him from a few years back but receives a glowing recommendation from his current landlord may be someone you want in your rental.

Credit and criminal reports should always be obtained before renting to any tenant (no matter how great a first impression they make), but it’s also always important to weigh information obtained with personal and professional recommendations. You want to not only make sure you rent to someone who can pay their rent … but also someone you enjoy having in your property.

Read more on Resident Management
Geoff Roberts
Geoff Roberts

Geoff is a marketer, surfer, musician, and writer. He lives in San Diego, CA.

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