It is important to have good tenants, making the screening process an important aspect of the management companies job. Get an idea of how much protection the management companies you interview will provide you with their screen process by asking a few important questions.
Will they “hold” a property for a tenant, and take it off the market before a lease is signed? If so, do they charge a fee?
There should be a fee just in case things fall through and the tenant does not sign the lease.
What systems do they have in place to protect against rental scams? Have they ever been duped by one?
Scams are becoming more and more common. Local scammers will copy your ad, break into your home, and show the unit so they can collect a “security deposit” and run.
What methods do they use to screen tenants?
A more comprehensive method is preferred. Use methods such as:
Contacting former landlords
Verify income and employment
Run a credit report
Verify application information for authenticity
Contact personal references
Run a public notice search
Which tenant qualifications are most important to them? Will they consider a tenant who meets their qualification in some areas but not others?
The less someone has to lose in life, the less you can expect from them. Bring in people who are serious about their job or schooling. The eviction rate and tenant turnover rate of property managers is a good indicator of how well they screen tenants.
Do they provide you with tenant information so you can approve or deny each tenant?
It is the property managers responsibility to perform tenant screening, not yours. This is what you are paying them for and it is what they should be experts at. It is the one critical function that you should be trusting them with. Do not hire them if you can not put your full trust in them. When owners get involved in the screening process the possibility of discrimination goes up significantly. Fair housing violations lead to lawsuits that can cost thousands. This is a significant liability both for you and the management company.
Other questions to ask:
What do they charge tenants for the application fee?
Do they require the application fee be paid in certified funds?
Do they require each adult that will be renting to complete their own application?