Application and Tenant Screening

33 Replies

Hey BP!

How do you guys handle applications for your rental for couples? Do you make both of them fill out an application? I know both have to be on the lease, but the 3 reports I request cost $55 to run so I'm just feeling that $110 application may be too steep and push some good qualifying tenants away. I have a couple coming today that seems very legit but will of course verify with screening before signing a lease.

Thanks in advance!

@Brandon Allenczy you don't think other property managers the the couple applies for will run background checks on both. I run checks on anyone over 18.If $110 is too much how are they going to pay first months rent and security deposit. If they break up you will know if one of them can afford to stay in the place. 

Hey @Tim Herman thanks for the response. To be clear I plan on performing background checks etc on everyone living there. I was just thinking maybe this was too high and turn some people away but I do get what you mean about not being able to afford the rent if they can't pay this amount.

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You should require an application screening for EVERY adult that will be residing in the property. This includes the 19-year-old son that lives with his parents while attending college or delivering pizza and playing video games all night. All adults should sign the lease, even if they are not financially contributing to the payment of rent.

Part of the screening is a criminal background (or it should be) and you need to know who is living in your rental. I charge $30 per application and sometimes have four people apply together. Whether they applied together or individually for their one rental, the cost would be the same.

Thanks @Nathan G. ! What do you use for your screening/background checks? I use Avail as my PM software and it has a standard Credit check, Background check, and Evictions report. All when bundled are $55. It sounds like you might get the same data for a lower fee?

Everyone over 18 pays to avoid discrimination and also let me know who will be there.  I have had a family of 5 and they each had to pay the 43 fee, shockingly 3/5 lord and they all wasted their money.  Granted I don’t charge anything personally for the application however that is what rent prep charges them.  I do however let them know my qualifications up front and warn them that I get several and choose the best.  I also give them the opportunity before sending the link to explain anything I will find on there so if it is a no go they don’t waste their money.  They are also warned if I find any criminal or financial records I wasn’t warned about regardless of how old it is it’s an automatic reject however depending on what and when it was we may be able to talk it out before and still be accepted. The more someone is against a background check the more they have to hide.   

I charge $25 for 1 adult, $40 for 2. 

The bulk of my screening is done before they have even seen it. 

When they apply most provide their own credit report within 3 days to keep costs down.  Anyone can get one for free. 

I've received dozens of calls from 'professional' screening co's asking about previous or current tenants.  Their questions are a joke.   I screen references much better with more open-ended questions.

Background/criminal and sex offender checks for folks that have resided in state are free and easy to find.  Just need to know which counties they've lived in.  $110 is ridiculous for most couples and I respect your hesitancy to charge that much.








Originally posted by @Brandon Allenczy :

Thanks @Nathan G.! What do you use for your screening/background checks? I use Avail as my PM software and it has a standard Credit check, Background check, and Evictions report. All when bundled are $55. It sounds like you might get the same data for a lower fee?

 My property management software is Propertyware and the screening is built in. I believe we pay Propertyware $16 per screening but I charge $30 to the applicant.

@Steve Vaughan thanks for your input. I think what I'll do is still run the full reports on both of them so I have good data on both people, but pay for the second fee out of pocket. Then, to avoid this in the future, I'll try to find a cheaper method of screening applicants.

@Nathan G. That makes sense. I'm fine with making people pay if it's $30 per applicant but not $55. That seems excessive. I think I'll just pay out of pocket for the second application here so I can get some good tenants in then look for another tool with a cost more like yours.

Originally posted by @Brandon Allenczy :

@Steve Vaughan thanks for your input. I think what I'll do is still run the full reports on both of them so I have good data on both people, but pay for the second fee out of pocket. Then, to avoid this in the future, I'll try to find a cheaper method of screening applicants.

@Nathan G. That makes sense. I'm fine with making people pay if it's $30 per applicant but not $55. That seems excessive. I think I'll just pay out of pocket for the second application here so I can get some good tenants in then look for another tool with a cost more like yours.

Have you shopped around to see what other Landlords and Property Managers are charging for screening? I've seen some areas where they charge $75 per person and they have no complaints because it's normal for their market. I'm in a small community of 9,500. I was the first one to start charging for background checks. Now there's a trailer park that charges $55 whereas I only charge $30 and most people don't charge anything.

You shouldn't freak out about a fee unless you know it's outside the market norm. If they are good prospects, they won't be concerned about failing your background check and they'll see the fee as an investment towards getting a good rental.

@Nathan G. that's a good point, I have not. I imagine it's got to be pretty similar as there are some parts of my town that are pretty seedy and good screening is a MUST. You make a good point. I'll do some research and check it out.

Thanks!

@Brandon Allenczy if Avail is charging you $55 per applicant, that well above industry average. You can use Apartments.com or Zillow who charge $29 for credit, criminal and eviction. The other advantage of these platforms is the applicant can apply to other properties within the platform using the one time fee. Some people have the mentality "who cares because the tenant pays" but I would argue excessive application fees can deter applicants. Application fees are in themselves a powerful screening tool. It is a mistake to allow free applications for two reasons:

1. They have no skin in the game, so you may get people applying who are not even interested.

2. If tenants have to pay, they will sometimes self screen. This eliminates some people who know they have horrible credit or criminal background, because they don't want to waste money. They just find a landlord who doesn't require application.

I've been happy with transunion my smart move for screening.  Our process is 1. We prescreen before showing property. 2. They view property and apply. 3. We review and reject or continue. 3. We send invite from mysmartmove for them to initiate their own background check. It covers income, credit, criminal, and eviction for $40, and is required for every applicant 18 and older.  We try to make sure they're a good fit before they invest in the screening.  This level of hands-on might not be practical for everyone, but it has worked well for my own rentals and for my single-family landlords.  Don't be afraid to require reasonable application fees; it's expected by applicants, and provides the first opportunity for your potential tenants to act in good faith.

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@Joe Splitrock I totally agree. I'll never have a free application because of the reasons you just mentioned, but agreed, I would like to find the right balance so as to not deter applications. 

The other question I have is do I really need all 3 of these reports? If I just run the credit and background checks, does this give enough info to show that they have no prior evictions?

@Sharon Powell I actually signed up with smartmove and thought about using it to. If I'm seeing it correctly, Smartmove is ONLY screening, correct? I would love to have 1 tool instead of managing tenants on one platform (Avail), and screening/applying on another one (smartmove). But maybe this is the way to go. Thanks for your input!

Originally posted by @Brandon Allenczy :

@Joe Splitrock I totally agree. I'll never have a free application because of the reasons you just mentioned, but agreed, I would like to find the right balance so as to not deter applications. 

The other question I have is do I really need all 3 of these reports? If I just run the credit and background checks, does this give enough info to show that they have no prior evictions?

 The Apartments.com report is TransUnion Credit with judgements and Checkr background that includes nationwide eviction report. They may be calling it three reports, but it seems all the same information I get on two reports. My guess is the only difference is their profit.

Originally posted by @Brandon Allenczy :

@Sharon Powell I actually signed up with smartmove and thought about using it to. If I'm seeing it correctly, Smartmove is ONLY screening, correct? I would love to have 1 tool instead of managing tenants on one platform (Avail), and screening/applying on another one (smartmove). But maybe this is the way to go. Thanks for your input!

 Smartmove is run by TransUnion credit. It is their own screening service that also includes criminal, eviction and estimated income verification. It costs tenants $40. Although it may be one report, it contains everything that others have in 2-3 reports. I actually like the Smartmove report better than Apartments.com, but I usually use Apartments for two reasons. It costs $10 less and there is an application form. If you use Smartmove, you need to collect application separately. 

I believe Avail also gets their credit portion from TransUnion. so you are not getting anything extra for the $55 versus $40. 

Originally posted by @Drew Sygit :

"the 3 reports I request cost $55 to run"

So, it appears @Brandon Allenczy is running Equifax, Experian and Transunion credit reports.

Suggest just use one, but be sure to check national Evictions, Convictions and Sex Offender lists, etc.

 No it is just the way that Avail refers to their reports. It is only one bureau (TansUnion). Here is from the Avail website:

Yes, everyone over 18 fills out an app and pays the fee.  The issue for you the company you are using is charging way to much in my opinion.  Even if your local market supports that high of a fee I would find a cheaper solution. The markup on that $55 is insanity!