The Lone Star State is quite unique compared to the rest of the country when it comes to landlord / tenant laws and regulations. Regardless, tenant screening is still an important step in property management.
Every landlord or those thinking about renting out their property knows that the tenant screening process is very time consuming. From verifying each of the tenant’s documentation to making decisions, tenant screening can be intimidating and may take a lot of your time. That’s why you need a good tenant screening process for your rental property.
Tenant prequalification
A good tenant screening process means having a standardized tenant prequalification process and the right technology in place. This will ensure that you’re compliant with all fair housing laws and that you’re getting qualified tenants to reduce financial risk.
Tenant prequalification is a critical first step in tenant screening. A standard online application can ensure you’re collecting the same information and sticking to consistent criteria every time. This will save you and the applicant’s time by determine immediately which potential tenant meets your minimum requirements.
Selecting a Screening Service
Tenant screening is just one of the areas in real estate where technology has made tremendous contribution.
Technology has made it easier for landlords to screen potential tenants efficiently. If landlords choose to hire a property management, they could just focus on other business ventures and have the property manager do all the work for them. Property managers can market the unit online, screen tenants using screening services, meet the applicant, tour the property, collect rent, and up to filing an eviction.
From missed payments, property damage to illegal activities, experienced property managers have a lot to say when it comes to having tenants who can cause lots of trouble. To avoid such incidents, savvy property management companies partners with reliable tenant screening services before putting everything to paper.
Choosing the Right Tenant Screening Service
There are hundreds of tenant screening software available. The idea of checking each one of these and weighing which ones is a potential aid to your real estate investment can already sound overwhelming and stressful. While property management companies already have their own tenant screening software service, it is important that you know how tenant screening services work.
Tenant screening services are consumer reporting agencies (CRAs) that provide background data on tenant applicants. These services generally provide report on information like potential tenant’s credit report, criminal history, eviction history, employment verifications, liens, and bankruptcies to name a few.
A good tenant screening service should work within the housing laws to screen potential tenants. There are various types of tenant screening services. Let’s briefly discuss each one and their features and how these features can cut down on the time it takes to screen your applicants.
1. Credit Bureaus
The big three credit bureaus are Equifax, Experian, and TransUnion. They collect and maintain consumer credit information. These major CRAs receive credit-related information from the companies and lenders that you do business with, from state and local courts. These CRAs can sell your information to companies that want to prescreen you for their products and service, and to businesses that have a legally valid reason for reviewing it.
It’s important to note that property managers and landlords typically cannot access a tenant’s credit report without his or her written permission.
Features:
- Instant full credit report
- Latest credit info
- Soft Credit Inquiry (credit score won’t be impact by the credit check)
- Instant access doesn’t cover all state and county records
- Limited background checks
- Minimal customer support
2. Manual Tenant Screening Services
There are currently 5 states that don’t allow for instant access when pulling public records – Wyoming, Delaware, South Dakota, Colorado, and Massachusetts. So if you’re a landlord in or near these states, manual or local services is recommended to ensure that data you’re using is fair and accurate.
Features:
- Fair Credit Reporting Act Compliant (limits how far back you can use credit information to make a housing decision)
- More access to states and country records
- Checks the data for accuracy.
- Soft Credit Inquiry (credit score won’t be impact by the credit check)
- Reports can take longer process
- Landlord pays for the service.
3. Instant Tenant Screening Services
Instant screening services also get their credit information from the Credit bureaus, but way faster. On the contrary, both credit and background are not reviewed nor investigated.
Features:
- Instant credit / background report
- Limited access to states and country records
- Soft Credit Inquiry (credit score won’t be impact by the credit check)
- Landlord / Tenant can pay for the service
- No quality Check
4. Property Management Services
Hiring a property manager that offers comprehensive service is truly a game changer. You will find it very convenient to have a property manager handle everything from property marketing to rent collection.
Property Management companies often partners with general contractors and tenant screening services to provide landlords and rental property owners with extensive property management services.
Apogee Properties understands that owning a rental property is a lot of responsibility. We’ll work with you to identify only the prime tenant candidates you’ll want to rent your properties to. At Apogee, we provide comprehensive property management services that includes tenant screening services. Contact our team to learn more or to get started.
Working with Apogee Properties
Apogee Properties is Houston’s leading real estate management company. We work and live in Houston and our property managers are local. We have been in business for more than a decade providing comprehensive property management services in the Houston region ranging from a studio condo to a multi-family million dollar estate.
We look forward to hearing from you and sharing what we can offer to your Houston property. Contact us today to learn more!
