Finding Better Tenants Using Property Management Software
As a landlord, one of your main goals is renting to great tenants.
Sometimes, though, finding reliable tenants can be a challenge.
With property management software by your side, though, it doesn’t have to be a nightmare.
Property management software can help you find better tenants with features that maximize your online applications, improve tenant screening, and boost your marketing efforts. And it can help you do it efficiently.
Let’s take a look at how to use property management software to find the best tenants.
Create an Online Rental Application
Property management software makes it easy to set up more effective online applications.
The key to creating your application is to adhere to the same process every time for every applicant. Using the same standards and asking the same questions of every applicant helps you stay compliant with the Fair Housing Act.
An effective rental application can provide important information about a prospective tenant that you could not uncover otherwise. Furthermore, when joined with criminal records, credit history, and identity verification, an application can be used to determine if your applicant is being completely forthright.
Some critical pieces of information you need include current and prior residence information, employment history, personal references, and proof of income. Depending on your policies and location, you may want to add sections like pet ownership and whether or not they own a vehicle.
When you receive applications, don’t just take a quick look and move on. Your potential tenant provided you with valuable information. Take action! Call current and past employers and landlords. Prepare some questions and take notes. Following up is one of the best ways you can learn about the quality and character of the applicant.
Should an Application Include a Social Security Number (SSN) or Driver’s License?
It is extremely common for landlords to require their applicants to provide a social security number or driver’s license as a means of verification. We advise against this. Laws governing consumer data protection are getting stricter and stricter. If you do not know how to properly store and get rid of this information, you should not be collecting it.
Rather than taking an SSN to run a credit check, use a service that allows the tenant to submit their identification information directly. It’s probably better for their credit score, too, because hard inquiries negatively impact scores.
Should You Charge Tenants for Applying?
As we mentioned, charging tenants for applications may scare away some potential candidates, but that risk is negligible. Charging an application fee is an excellent way to offset your costs and weed out serious applicants from those that are not.
One thing to note, though: some states have rules regarding how much you as a landlord can charge for an application, and whether or not you can profit from that money. Be sure to check your state laws or consult with a local lawyer before you take any action that may put you at risk of breaking the law.
Active Screening
Once you’ve designed an effective application process in conjunction with property management software, the platform should make it easy to screen tenants, saving you valuable time.
When it comes to screening services, it’s important to remember that one size does not fit all. Some industries require in-depth and expensive background checks, while others need only the bare minimum. Knowing what you need comes down to understanding what each level of screening provides.
Criminal Report
Criminal reports can vary quite a lot and understanding these differences is key. This variance is mainly due to different laws that govern how courts record criminal activity. For example, all criminal records are filed under the name and date of birth of the offender; however, some counties include their address while others do not. This additional piece of information can be crucial to correctly identify records – after all, it is possible for two people to share a name and date of birth.
Different types of criminal reports will attempt to counteract these inconsistencies in different ways. Some property management apps (e.g., Innago), use an SSN as a means of producing a more accurate report—verifying identity, uncovering aliases, and locating past addresses.
The information pulled in a report is also dictated by its source. There are three sources of information: individual county court records, state databases, and national databases.
For landlords, a national criminal search is usually all you need to pull. Going county by county is almost always an unnecessary and costly process. If you’re in an especially crime-filled area or live at the intersection of three or four counties, you may want to expand your search, but you’ll probably learn all you need to know from a national database.
Eviction Report
Eviction reports are also not standardized and are often filed specifically under the evictee’s name. Again, SSN verification can go a long way toward increasing the accuracy of the data returned. Also of note, while eviction records used to be included in credit reports, that is no longer the case. A July 2017 law made this activity illegal. If you’re looking for eviction records, don’t rely on a credit check; you’ll need to request that information as an additional report.
Credit Report
Unlike criminal reports, credit reports are fairly standard. Whether there’s a middleman delivering the data or not, a credit report will nearly always come from one of three sources: Equifax, Experian, or TransUnion. These are the three primary credit reporting agencies (CRAs) in the US. Because of their ubiquity, the information contained in any credit report you obtain should always include the following:
Basic Information: Applicant identification information (i.e. name, address, phone number, age, etc.) including address history and any aliases
Fraud Indicators: Notifications of an SSN mismatch
Tradeline Summary: History of payments on active credit accounts (e.g., credit cards, auto loans, etc.)
Inquiries: Organizations that have viewed the applicant’s credit history within the last two years
Credit/Resident Score: A numerical expression of the applicant’s credit worthiness (this can be specialized for renter’s as a “Resident Score”)
Because this information is relatively standardized between the big three CRAs, learning to effectively interpret and understand an applicant’s credit report is fairly easy.
Active screening isn’t complicated with property management software. Most platforms have a simple linking process that your website manager can set up with ease. And most also have instant reporting, so that you quickly get a full background on your applicants. It essentially comes down to setting up the process and then letting the platform do the heavy lifting from there!
Important Note: Beyond a consistent application and screening process, you also need clearly stated policies when it comes to accepting or rejecting applicants to protect yourself against liability. It’s important to keep in mind that you need to be compliant with the Fair Housing Act and applicable state regulations throughout this process. If you are unsure about regulations or policies, consult with a lawyer.
Marketing
Marketing complements active screening. When you know your ideal applicant’s background and character, there are things you can do on the front-end to appeal to them.
Attracting the interest of great tenants is the only way to get them to apply. Most property management software platforms offer marketing and advertising tools. These tools make marketing exponentially easier than it used to be.
Many tools now allow you to syndicate your available listings to a variety of websites across the internet. Make sure that the major players like Apartments.com and Realtor are included. Zillow may be a good option as well but know that they charge you to advertise on their site.
By using listing syndication, you can create a single listing within your property management software that you can then export to all major listing sites at once. This allows you to maximize your exposure while saving you hours of manual effort.
Crafting listings that appeal to certain renters is also part of finding great tenants. Include plenty of information about your property and don’t be afraid to set some expectations. It will prevent wasted time for you and potential tenants. The better and more accurately represented your property is from the outset, the more likely you are to attract people that will be the right fit.
Conclusion
Property management software can help you find the best tenants for your property. And that is truly invaluable.
By leveraging tenant screening features and marketing tools within your platform, you can attract tenants that will make your life easier and better.
