Hello, property and potential property owners! Welcome to the RPM Distinguished Care blog, where we provide practical advice about property management. If you haven’t already, be sure to check out our previous posts on how to stay ahead of repairs with your rental property and how much the average property management fee will run you. Here at RPM Distinguished Care, we’re committed to providing you with the information you need to have a successful rental property here in Charleston.
Today, we’ll be discussing the importance of tenant screening and how to go about such a delicate process. Choosing the right tenant is almost as important as choosing the right rental property. How do you determine which tenants will be reliable, responsible, and reputable? There are several factors you need to consider before making your final decision and we’ll go over each of them. From how you go about drafting your listing to the local and state laws you need to abide by—we’ve got you covered.
What is a “bad” tenant?
We can easily imagine the perfect tenant, can’t we? They pay their rent on time. They’re exceptionally quiet after 10 p.m. They adapt to changes in policy and follow site rules without complaint. In a perfect world, every tenant would meet a landlord’s criteria. However, this is rarely the case. And, while there may be a universal image of the perfect tenant, there’s no shortage of different kinds of “bad” tenants. The tenant who always pays their rent late. The tenant who blasts music at midnight. The tenant who either loudly protests being asked to make reasonable changes to their space or outright ignores site rules. A “bad” tenant is simply a tenant who makes their landlord’s life ten times harder. The best way to avoid a bad tenant is to not rent to them. This can be difficult however, as most rental applications put on their best face during the initial leg of the process. Some potential tenants aren’t truthful and others simply have undesirable habits you cannot predict. We want to equip you with a few tools and practices to help weed out tiresome tenants before you hand over the keys.
Screening Process
The screening process is meant to provide you with all of the information you need to know about a potential tenant. How seriously you take this aspect of the rental process can determine how many headaches you end up suffering in the long run. Keep in mind: You aren’t trying to assess whether someone is a good or bad person. You might appreciate an applicant on a personal level but, simultaneously, feel uncomfortable renting to them. The screening process—like the preapproval process at the bank—looks at a list of factors to determine someone’s ability to satisfy a financial obligation. Nothing more, nothing less. You’ll want to take your time and come up with a list of preliminary criteria to filter the applicant list. This criteria can involve a minimum credit score, a consistent credit history, proof of employment, a clean background check, a cosigner, etc. In addition to a security deposit and first month’s rent, these can be fantastic avenues for ensuring an applicant’s ability to pay. The median credit score for renting is 650 and it’s recommended you stay in this range, unless you are renting a significantly expensive property.
We would be remiss not to mention the anomaly of 2020 and the coronavirus pandemic. Due to the rapid spread of COVID-19, many individuals were forced to leave employment or were unable to pay their rents. Federal moratoriums on evictions save some, but not all, from being evicted before the pandemic was brought back under control in the United States. Mitigating factors, such as the pandemic, should factor into your assessment of someone’s work history and eviction history. Acknowledge beforehand whether you’re willing to accept other mitigating factors, such as identity theft and mistakes in credit reporting, and which criteria are a hard line.
Now that you’ve identified the most important criteria in your book, you’re ready to write your listing. The key to a good listing is to be specific. The more specific you are in your listing, the more likely you are to weed out applicants which do not meet your basic criteria. Explain with a reasonable amount of detail your expectations, requirements, and policies. Do you require references? If so, people without references will be discouraged from applying. Do you not allow pets? If so, people who own pets will be discouraged from applying. Do you not allow smoking? If so, people who smoke will be discouraged from applying. And so on, and so on. Now, this method isn’t foolproof. Some applicants won’t read the listing in its entirety or will apply even though they do not meet the criteria. This is why applicant interviews are important.
Conducting an applicant interview can seem overly formal, but they don’t have to be. A short ten to fifteen minute conversation can give you invaluable knowledge about a potential tenant. Write down a list of questions beforehand. Questions you might want to ask are: When would you plan to move in? Do you know how long you’re planning to stay? Is anyone else moving with you? Have you had any prior evictions? This is a good opportunity to see if a potential tenant is honest with you, as you’ll be able to verify information given in the interview when you review their credit report. Try not to ask what could be considered invasive questions. A question like Why are you moving? might seem innocuous, but can be quite off-putting to victims of domestic abuse or private individuals.
When reviewing an applicant’s credit report, be sure to cross reference the information they provided on their application. This includes their name, address, previous addresses, and employment history. If you do find discrepancies, do not assume the applicant lied. Simply make a note and bring up this disparity in information the next time you speak with the applicant.
State and Local Laws
Just as potential tenants have a responsibility to be honest and forthcoming about their financial history, landlords have a responsibility to fairly judge tenants. Failure to do so can result in hefty penalties, fines, and even litigation. The state of South Carolina prohibits discrimination in housing-related transactions on the basis of race, color, sex, familial status (including pregnancy), national origin, disability, and religion. The following actions are regulated under South Carolina law:
- Discrimination in the sale or renting of housing.
- Publishing discriminatory statements or advertisements.
- Refusal to lend money for housing based on discrimination.
- Discrimination in terms and conditions of sale or rental of housing.
- Refusal by the owner to permit the tenant to make reasonable modifications.
- Refusal by the owner to make reasonable accommodations.
- Refusal to allow prospective buyer/renter to inspect housing.
- Inducing others to sell/rent based on the entry of a member of a protected class in the neighborhood.
- Making false statements to the buyer/renter about housing availability.
- Interfering with the use and enjoyment of protections.
- Construction of multifamily dwellings which are inaccessible.
Beyond these protections against discrimination, tenants in South Carolina have five days to pay overdue rent or move out before a landlord can file for eviction. Additionally, tenants may exercise their right to withhold rent—or “repair and deduct”—if a landlord does not address significant repairs in a timely manner (ex. broken water heater).
As a landlord, you should be well versed in the state and local laws which apply to your property. As well, you should be committed in your screening process to only judging tenants on the criteria specified above. Factoring in any aspect of a potential tenant which falls under a protected class is not only unethical—it is illegal.
The tenant screening process can be stressful. Wading through dozens of applicants hoping to find one which meets your standards and who will not take advantage of your trust is difficult. In the pursuit of a clean, responsible tenant who is able to meet the financial obligations of renting your property, we have your back. RPM Distinguished Care offers tenant screening as one of our many services. If you’ve never gone through the screening process before or are uninformed about the laws which apply in your municipality, we’re prepared to handle everything for you. Every tenant application is evaluated based on credit, background, employment verification and residency/rental history. Our thorough screening complies with all applicable laws, including the Fair Housing and Fair Credit Reporting Act. When we have found a qualified tenant, we’ll schedule lease signing and a move-in condition property review. Our aim is always to alleviate stress and save you money.
If you’re daunted by the task of tenant screening, reach out to our team for a free assessment of your rental property or for answers to your questions. We’re available and eager to help you. Return to our blog in the future to read about summer lawnscaping and the laws concerning evictions in South Carolina. Until then, thank you for reading! See you next time!
We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.
