Tenant screening

27 Replies

Has anyone used Smartmove tenant screening?  If so what do you think?  Anyone use other methods?  I need to improve my selection process and need some advice/info.

Wayne, 

We started using Smartmove last year and have been very happy with the results.  The results from Smartmove, which provides credit, criminal and eviction reports, combined with our tenant verification via former landlords and income verification, has improved considerably the quality of our tenants.  Very glad we started using it.

Ou process is straightforward - phone or email screening asking basic details and then informing the prospective applicant about our screening process. That weeds out folks you don't want in your rental right then.  Next step is to have them complete a short paper application and then they complete the online portion through Smartmove.  Assuming Smartmove recommends the applicant, we get tenant references from prior landlords, assuming they have rented previously and lastly income and/or employment verification.

The applicant pays for the Smartmove screening which is $35 currently.  Most folks won't waste $35 is they don't believe they are truly qualified.

Hope that helps.

Chris

Hello Wayne,

Thanks for your response to my last post. In it I referenced my credit/background check. I do use mysmartmove. I haven't been at it for very long, so I've only had two people go through the process. It works very smoothly from my end and I haven't had any complaints from the applicants.

I like to highlight the fact on my application that I am not collecting any money from the applicants through this process. The fee is equal to the cost of mysmartmove, and the tenant pays them directly.

We have been using smart move for several years. Very happy with it. Before we had run the checks through a real estate agent friend. Which was slow.

Regards,

Kirk

I have used smartmove for years and am very happy with it.  The tenant pays for the credit report and smartmove emails you a recommendation.  You see their payment history.  Easy to use.   

I use National Tenant Network.  http://www.ntnonline.com/ They will run background and landlord reports.  What I do is move in the tenant and move them out when they leave.  This gives me a chance to report if they owed money, left the place clean etc.  That tells you if you really want to rent to them.

I prefer the credit screening. Companies that take all the work away from the tenant. The ones were the tenant needs to go online were a pain. I like to give the tenants a form to fill out then sign. We handle it from there.

There are several companies out there operating this way. Currently I am are using AAA credit screening.

I am looking out for another provider though. I looking to lower my cost.

MySmartMove or the other ones make a LOT of sense if you have under 5-10 properties. 

Once it turns into a full time business (Property Manager, MultiFamily, Broker), you're better off going through the accreditation process and getting direct access to credit reports.

It's a lot more convenient and makes a lot more sense to do real time screening once you have a signed paper or electronic application. Otherwise you end up chasing after tenants, trying to figure out why emails didn't get accepted and lose people who could have been tenants.

Also - the MySmartMove criminal/evictions data is not all that great IMO, but that's a separate discussion for another time.

No we screen our own.

Here is our process.

A search of court records to see what civil and criminal litigation the tenant may have been involved in and whether the tenant has disclosed this

Are you who you say you are.

Do you and have you lived where you say you have lived.

Do you have landlord references.

Do you and have you worked where you say you have worked.

Do you earn what you say you earn.

Can we see your recent bank statements (reasonable redactions ok).

Can we visit you in your current residence. 

Credit reports - Landlords here seem to be addicted to them so much so that a thread I started suggesting this was not a good idea got removed. We never ever pull a credit report because it exposes us to information about the tenant that we have no business having . Secondly if we get satisfactory answers from the screening process above, what is on a credit report is largely irrelevant. A good credit score speaks more about a willingness to pay but the system is such that it is not necessarily relevant to an ability to pay because it rewards people who are over-leveraged and are making payments they can't really afford.

So at the end we ask what will we see when we pull your credit report but we never ever pull it (although we don't tell the tenant that) and it has never factored into our decision.

If I could boil it down to one question it would probably be

Can we visit you in your current residence

We probably would not rent to somebody who refused and probably would rent to somebody who agreed because more than anything else it shows that the tenant has nothing to hide.

Number 2 - Can we see your bank statements. That will tell me more than your credit report ever will and again it shows you have nothing to hide.

@Account Closed

When you're a small landlord it probably makes sense to screen civil, criminal yourself, if you can.  You're looking for civil records in Maryland, correct?  Guess what: Landlord/Tenant records aren't online! [http://www.courts.state.md.us/casesearch2/faq.html]

What records are not on Case Search?
Landlord tenant, marriage license records and all case types protected by the Maryland Rules on Access to Court Records.

What happens when you have an out of state tenant, then what do you do?

How do "make sure they are who they say they are?"

I 100% disagree on the credit report. I think the score can be confusing, but the actual report is a gold mine:

  • Does the applicant pay his bills? How often does he miss payments?
  • Is the applicant over leveraged?
  • Has the applicant ever had serious collection issues? Why?
  • Bankruptcies? 

These kind of things directly impact the ability of a tenant to pay your rent, which is your #1 concern. As a landlord you have EVERY Right to view this info. You're essentially giving someone complete access to a valuable asset on a monthly payment plan. Why wouldn't you want to know everything about them?

What I've discovered is that generally, the landlords who advocate omitting things from a screening haven't had to evict someone yet. Once that happens the tune changes. 

Originally posted by @Ariel O. :

@Ihe O.

 You're looking for civil records in Maryland, correct?  Guess what: Landlord/Tenant records aren't online! [http://www.courts.state.md.us/casesearch2/faq.html]

What records are not on Case Search?
Landlord tenant, marriage license records and all case types protected by the Maryland Rules on Access to Court Records.


Then maybe you don't know where to look. My wife does the screening and has told me about applicants that are co-plaintiffs on lead paint landlord/tenant suits and another case where  an applicant had an eviction case pending.

"What happens when you have an out of state tenant, then what do you do?"

You do what you always do if you  cannot find a way of getting the information you need. You don't rent to them.

"How do "make sure they are who they say they are?"

By making them produce multiple pieces of information that corroborate who they say you are instead of placing over-reliance on one that can be fraudulently procured.

"I 100% disagree on the credit report. I think the score can be confusing, but the actual report is a gold mine:"

And I am saying that a person that does the things can get better information about an applicant and  doesn't need it 

  • "Does the applicant pay his bills? How often does he miss payments?"

That's why you ask him for his recent bank statements. 

  • "Is the applicant over leveraged?"

Total up the outgoings and the incomings on the bank statement.

  • Has the applicant ever had serious collection issues? Why?

I've had a collection issue over a bank charge that I refused to pay. I know someone who has a collection issue because their tuition was paid late and the school refused to accept it when it arrived and a collections company jacked up the bill by 5 grand. Many of these things are irrelevant to people's attitude to their rent.

  • "Bankruptcies? "

You are a landlord not a creditor.

"These kind of things directly impact the ability of a tenant to pay your rent, which is your #1 concern."

They don't. The things that impact the ability of the tenants we rent to are set out in my post. 

"As a landlord you have EVERY Right to view this info."

Let's say you are correct about that. I don't know of any Rights that are not  accompanied by obligations and responsibilities. Do you? 

The institutions that have genuine need for credit reports are bound by those obligations and responsibilities and can be held liable for them.

In business there are many rights that a situation confers - I am discriminating about the ones I choose to invoke because  rights usually go hand in hand with responsibilities.

"You're essentially giving someone complete access to a valuable asset on a monthly payment plan. Why wouldn't you want to know everything about them?"

Because they have a right to privacy and I am only interested in things that are relevant. 

Because a tenancy is  the right to have a roof over your head and the protections in law that go with it is also valuable to the tenant and for many it is a priority obligation.

Because the tenant cannot abscond with your house in the same way that they can abscond with money you've lent them.

Because a credit report cannot tell you whether the tenant is destructive or anti-social and last but not least but above all else

A tenancy is not a loan of money. That's why the law doesn't give borrowers the same rights that they give tenants and thats why it may not be the best idea to conflate the two and indiscriminately transplant the tools used for one to another. 

"What I've discovered is that generally, the landlords who advocate omitting things from a screening haven't had to evict someone yet. Once that happens the tune changes."

   We don't omit things from our screening. We have a multi-dimensional approach rather than one dimensional approach that places over-reliance on a single thing that can be procured fraudulently. 

Please pay attention to what was written. We find that by the time we have gone through our process it is highly unlikely that anything in a credit report will influence our decision. That's because our process is specifically tailored to granting tenancies as opposed to lending money.

We have never had to evict anybody and we have never missed a single months rent payment.

@Account Closed

Please ask your wife where she looks, I would like to be enlightened.

I also find it funny that you say 

Because they have a right to privacy and I am only interested in things that are relevant.

And yet in your first post you want to go over and look at their current living quarters. Which one is more invasive? 

How do you know you're seeing all of the bank statements? Outflow does not equal debt. What if I'm servicing $35,000 of credit card debt by paying the monthly minimum? You would never know. What if I get paid in all cash? 

I note that you're in Maryland; many states do not give the same protections in terms of tenancy that states like NY,FL,CA and to a lesser extent your state do. 

In terms of rights and responsibilities, of course there are responsibilities that come along with viewing credit reports or any other sort of information. It's called the Fair Credit Reporting Act, and it requires that you get tenant consent and notify them if you plan not on renting to them because of something in their report ("Adverse Action"). It also places certain responsibilities on the tenant screening company, but that's not germane to the discussion here.

Finally, you say you are a landlord, not a creditor and talk about loaning vs tenancy.

To which I would say two things:

1. The whole point of going through the screening process and including credit reports is to prevent you from becoming a creditor/judgment holder of your tenant.

2. If you give a product or service to someone on installment payments or any sort of deferred payment system, then it's some sort of loan. We may not treat renting as that in a legal capacity, but how is it different then DirectTV or cellular service? You provide the service upfront and expect to get paid down the road. If it walks like a duck, talks like a duck, chances are, it's a duck.

Originally posted by @Ariel O. :

@Ihe O.

Please ask your wife where she looks, I would like to be enlightened.

      You can always try and hire her.

I also find it funny that you say 

Because they have a right to privacy and I am only interested in things that are relevant.

And yet in your first post you want to go over and look at their current living quarters. Which one is more invasive? 

Things become invasive when you assert that you have every right to do it. 

How do you know you're seeing all of the bank statements? Outflow does not equal debt. What if I'm servicing $35,000 of credit card debt by paying the monthly minimum? You would never know. What if I get paid in all cash? 

In our experience people who want our houses and have nothing to hide from us are happy to give us all the information we need.  The credit scoring system in this country tags people who make minimal payments on large balances as good credit risks. It is a habit that ismore indicative of personal finance illiteracy than credit risk.

People who are paid in cash we would probably want to meet in their homes. That's why we have a multi-dimensional screning process.

In terms of rights and responsibilities, of course there are responsibilities that come along with viewing credit reports or any other sort of information. It's called the Fair Credit Reporting Act, and it requires that you get tenant consent and notify them if you plan not on renting to them because of something in their report ("Adverse Action"). It also places certain responsibilities on the tenant screening company, but that's not germane to the discussion here.

If you are demanding peoples personal information is there any reason why you should not be subject to the obligations and responsibilities entailed in data protection and privacy legislation.

@Account Closed

There is the FTC disposal rule, but the very short version for a small landlord would be "Shred when you're done."https://www.ftc.gov/tips-advice/business-center/gu...

There's also the GLB act and the FTC act, but again, these are more on the screening companies then yourself.

What is even weirder is that there ARE laws related to data breaches. So they don't care how you store it, but then have legislated what to do when you're hacked.

I have not used any type of screening company before and over the years I have done pretty well with the process I have used.  In the past 4 years, I have noticed that I am not getting the quality tenants I want (I had to evict my first person about 4 years ago, after 9 years with no evictions) and I am wanting to improve my screening process.   I have met with them and driven by their house to see what it looks like on the outside, look at what their car looks like inside (if they don't keep it clean, chances are they don't keep the house clean) etc.   I have many long term tenants (one for 14 years, 3 for 8+years, 2 for 5) but still don't feel like I screen them well enough.  I am going to try Smartmove and see how it goes.  Thanks for the feedback everyone, very interesting responses.

@Ariel O.

Good point.  I did not think to check the court system to see if they had taken other landlords to court for lead based paint issues or others.  I should have thought about that considering I bought my 3rd house from a guy that was being sued by his previous tenant for not disclosing lead based paint.

@Wayne Smith

You're also looking for evictions, too :-) Or if they just like to litigate.

@Wayne Smith

 I have only used tenantbackgroundsearch.com I think it is great! There are three levels in which to choose, but the highest level (only $29.95) includes a nationwide eviction search, nationwide criminal search, along with previous address history and a great credit report.

I gather their info on the rental application, and submit an order for the report and pay with a credit card (I collect an application fee from them which almost covers the cost). It emails the prospective tenant to complete the process, which is pretty painless.

I don't care so much about their credit score, as much as if they are past due on any payments, how much debt they have, or if they have been untruthful about their history in any way.

I find that those that have something to hide decide not to put an application in on the unit, since they know I am doing a background and credit search.

I understand though that there is Tenant Screening / Mysmartmove available through BP, but I don't have any experience with that service.

@Account Closed I think it is great that you and your wife have found a process that works well for you. I know someone that is an onsite manager of a 24-unit building, and has been for like 20 years. He rarely has issues with evictions or late payments, and he doesn't even take applications, search background or anything. I don't even think that he gets a copy of their ID. He basically interviews them and "gets a feeling" from them whether they will be good tenants or not. I would never do that, but it works for him.

That being said, this is a forum where we help our fellow landlords. So it would be great to share if you have found where to search for landlord/tenant cases in Maryland, including evictions, as I haven't been able to find it. You might be quite the hero to all of us MD landlords. :-)

Originally posted by @Ariel O. :

@Ihe O.

There is the FTC disposal rule, but the very short version for a small landlord would be "Shred when you're done."https://www.ftc.gov/tips-advice/business-center/gu...

There's also the GLB act and the FTC act, but again, these are more on the screening companies then yourself.

What is even weirder is that there ARE laws related to data breaches. So they don't care how you store it, but then have legislated what to do when you're hacked.

 As well as what you could be liable for..... and it's not just if you are hacked, you could be burgled or not as careful as the law requires you to be.

@Account Closed

If you don't want liability worries, don't be a landlord.

You still haven't answered my question about where you find MD eviction records online. Would be very helpful to all the MD landlords here.

Beth, 

I don't know what my wife  does but she is a licensed realtor so that may have something to do with it.

We don't work on  feeling. We do take applications and follow up on the information (or at least some of it). We find that genuine applicants volunteer information often over and above what we asked and often invite us to pursue further enquiries.

We use AAA and have been very happy with it, it sounds like it does the same thing and for the same cost as Smartmove. If that's the case, Smartmove should be fine.

Originally posted by @Ariel O. :

@Ihe O.

If you don't want liability worries, don't be a landlord.

You still haven't answered my question about where you find MD eviction records online. Would be very helpful to all the MD landlords here.

I take a risk management approach by not exposing myself to unnecessary liability and/or risk without the prospect of commensurate reward.

The credit report is the supposedly the last step of our application process. We did not start out by saying we won't pull peoples credit but we found that by the time we got to that final step we had already gotten enough information to make our decision. We are now at the point where if we don't feel we can approve an applicant from the previous screening steps nothing on the credit report is likely to change that. As I have said I know people with fantastic credit and all that separates them from being broke is a single missed paycheck.

I have already answered the other question. My wife is a professional property manager. I honestly don't know what and how she looks this stuff up - and I'd rather stay in her good graces than be a forum hero. Plus if she tells me she'll start asking me to do it and I don't want to.

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