How do you screen your prospective tenants? Here are at AAOA we were curious to find out what our members are doing in addition to running a credit and background check. We received 1,100 survey entries, the results may surprise you!
Question 1: When screening a tenant, do you ask to see paycheck stubs?
Why this question matters: The life blood of your rental property is the income derived from tenants. Although you shouldn’t discriminate as to the type of income the tenant gets, you should verify that the income source exists.
If the tenant claims to be employed, we highly suggest collecting paycheck stubs. You never know if they are being dishonest about how much they make or what their employment status is. This is a CRUCIAL factor when determining whether they can afford rent. The higher their debt to income ratio the higher the risk of a tenant defaulting on rent.
The results: Most landlords do collect paycheck stubs but 37% take their prospective tenant’s word for it.
Question 2: When screening a tenant, do you ask to see their Social Security Card?
Why this question matters: A social security card remains the best form of identification showing the state in which it was issued and the tenant’s legal name. Most importantly, should your tenant skip town and leave owing you rent, you will have a MUCH higher chance of collecting that debt through a collection agency if you have a social security number. In many cases you can also use the social to trace the tenant’s new whereabouts to serve them a court summons as well.
PLEASE NOTE: A tenant can give you a fake social and it still may pull up a credit and background check if they’ve used that social security number consistently over many years.
The results: The majority of landlords are not collecting a social security card. If you want us to verify a social for you without collecting a social security card, we suggest ordering an SSN Fraud Verifier.
Question 3: When screening a tenant, do you ask to see their driver’s license?
Why this question matters: Like a social, a driver’s license can also provide identification, date of birth, and their most recent address. These pieces of information are crucial when conducting a criminal and eviction background search.
The results: Most landlords ask to see a driver’s license. We suggest asking for both a driver’s license and social security card to make sure everything matches up.
Frequently we get calls from landlords who have rented to tenants without requiring any tenant documentation to verify employment, references, or their identity. Taking the time to create tenant files that are correct and current can save you incalculable thousands in the future. This is especially true when a tenant skips town, leaves owing you rent, or gives you incorrect information making it hard for you to find criminal or eviction records.
Remember, tenant screening is MORE than just running a credit and background check.
Maintaining a current and correct tenant file is a simple way to protect your valuable investment. Tenancies change, lives change, and circumstances can occur that may turn a long term tenant into a potential collection problem.