RCR Update

FINDING GREAT RESIDENTS

Why you should use a resident screening service.

By TINA DEFIORE, Director of Rental Credit Reporting, with RANDALL C. PATTON, SafeRent

DO YOU REALLY know who's living in your rental property? Most property managers have streamlined their search for good residents by moving to an online rental application. However, without a qualification process in place, a property owner is often left hoping the details on that application are accurate. Professional resident screening services can help take out the guesswork and make leasing decisions easier.

Putting Together a Comprehensive Online Rental Application

We don't often think of an application as a screening tool, but it contains almost all the information you need about each potential applicant. To that end, build an application that gathers the data you need most, including:

• Applicant's name and contact information

• Number of applicants including both children and adults

• Number, type and size of pets

• Employment information

• Income • Address history

• Requested move-in date

• Preferred lease term

If there are multiple applicants jointly applying for a single property or unit, they will each need to fill out a form so you can consider each individual based on their own merits. Paper applications work, but offering online submission is often more convenient and less time-consuming for everyone involved. As much as your focus needs to be on your financial well-being and other professional interests, you also have a duty to protect your residents and the community.

Know Your Applicant's Credit History

A simple three digit number could help determine whether a potential applicant can maintain financial commitments, including rent. A credit score is a bank and a lender approved way to understand someone's debt repayment history. Though there are multiple credit bureaus, each with its scoring models, the criteria are primarily the same:

• Payment history

• Length of credit

• Type of credit

• Amount of credit versus credit used

• Number of credit inquiries

Credit checks may also serve as a secondary way to verify your applicant's name, possible aliases, social security number, known addresses and any other information in the public record.

Protect Your Property & Community

Criminal searches can be conducted by geographic area, including county or statewide inquiries, and include records related to misdemeanors, felony convictions or incarceration as provided by key sources, such as the Department of Corrections and the Administrative Office of the Courts. Reports usually include a potential applicant's background of violence, property destruction, sex offense or financial crime.

As much as your focus needs to be on your financial well-being and other professional interests, you also have a duty to protect your residents and the community. Make a sex offender registry search part of your resident screening process. Sources of information are trusted government and law enforcement agencies such as the Departments of Public Safety and State Police. Each report also includes detailed case and conviction information, providing important context to help you understand the applicant's criminal history.

Help Avoid Future Evictions

Property operators generally ask three things of their residents: pay on time, be responsible and be respectful of the property. Not coincidentally, violations of those three requests are often some of the biggest reasons residents are evicted. Opting to include an eviction history report as part of your resident screening process gives property operators insight into past actions that may serve as indicators of future behavior.

Eviction reports generally include the following eviction court records:

• Failure to pay rent

• Writs and warrants of eviction

• Resident judgments for rent

• Unlawful Detainers

• Resident judgment for possession and money

You will be alerted to possible red flags concerning an applicant's social security number and quickly know whether that applicant has applied for housing elsewhere. These factors could provide insight into each applicant's propensity for skipping out on rent—hopefully saving you time, money, and frustration down the line.

Rental History Check

Another essential part of the screening process is looking at the applicant's history. A rental history report will show if there were issues with the applicant paying on time or any history of property damage.

Because this requires contacting previous property managers, using a service to get the rental history reports will save time and frustration, should you have difficulty connecting with a property manager. You'll get accurate information to answer your questions about an applicant's renting behaviors.

Sorting it out

Collecting all of this information is just half the battle. The other half is reviewing it. In the end, you want a trustworthy resident who pays their rent on time, is responsible and respectful of your property. Implementing a consistent resident screening process that includes credit, criminal record and eviction reports will provide a greater chance of finding qualified applicants.

The relatively small amount of time you invest in a good resident screening service today, will determine how likely the applicant is to default on a lease, which can save you time and money in the long run.

While a resident screening is an excellent measure of an applicant's financial and rental history, it is essential to verify employment and references. You should contact an applicant's employer and personal references. Request to see a current pay stub as proof of current income. A consistent process that involves online resident screening and reference checks will significantly increase your chances of finding quality residents.

Unless you do many screenings every year, it can be challenging to interpret the information correctly. A resident screening service can effectively highlight the high-risk areas for you, allowing you to decide if you want to take the risk of renting to an applicant. The ultimate goal is to find responsible and long-term residents as one of the most important aspects of owning property.

SafeRent has been a valued partner for HAA’s Rental Credit Reporting for 13 years. Randall C. Patton is a senior professional in sales at SafeRent with over 15 years of credit experience in the multifamily industry, including applicant screening, online leasing, renter’s insurance and more. Patton supports the partnership between SafeRent and HAA by helping to expand the RCR presence for Houston-area apartment owners and management companies. He holds a CAS designation, has been a licensed insurance agent for 13 years and is regarded as an industry expert on applicant fraud and identity theft.

Rental Credit Reporting (RCR) was established in 1977 to solve screening problems the Houston Apartment Association founders felt plagued the local apartment industry. RCR has unsurpassed data on resident rental histories in the Houston region. The Houston Apartment Association and SafeRent Solutions are partnered to expand RCR and include numerous searches in one bundled report with immediate and unlimited inquiry access.