Everything You Need to Know About Renewal Screening Checks

As a landlord, vacancies can be costly to your bottom line, especially extended ones. And to avoid that, most landlords are usually eager to renew the lease of the existing resident to keep revenue flowing in.

However, this is not always the ideal thing to do! Why? You see, rushing into a lease renewal without considering certain crucial things can be detrimental to your bottom line.

This is where renewal screening checks come in. This is an easy way to safeguard yourself against drawn-out issues with residents, including disputes and evictions. You may also be able to ascertain whether the resident is worth renting to again or not.

It is also an opportunity to confirm the resident’s identity and payment history, which is an important step to protect yourself from increasingly sophisticated rental scams.

That said, subjecting your resident to another round of screening may not be smooth sailing. If you don’t do it right, it may damage the trust you have built with them over time.

So, in today’s blog, our experts at Compass Property Management walk you through everything you need to know about renewal screening checks.

What is a Renewal Screening Check?

This is a process you may want to undertake when a resident’s lease is nearing its end and you’re considering renewing it. It’s usually a good way to determine whether or not the resident still meets the screening qualifications.

Unlike the standard move-in screening process, renewal screening checks occur while the resident is still occupying the property.

What Benefits Do Renewal Screening Checks Have?

Some landlords choose to skip renewal screening checks for their residents for some obvious reasons. They figure that they don’t have to subject their residents to another round of screening because they have had a good rental history.

However, for savvy landlords, this criterion is simply not enough to qualify a resident for another lease term.

To get the whole picture, you’ll need to screen the resident to ascertain that they still fit the bill. After all, a lot could have changed during their tenancy. Luckily for you, a simple screening check can help you identify any gaps that may jeopardize their qualifications.

The following are some benefits of requiring residents to do a renewal screening check:

• Help you understand any issues the resident may be facing. This can help you avoid potentially costly issues later down the road.
• Help you identify any potential red flags that may have emerged during the tenancy period and which could lead to issues if left unaddressed. Such as, resident damage, lease violations, or a history of late payments.
• To ensure you only retain quality residents who will respect the property and honor their obligations.
• Help you decide whether you may need to update any of the residents’ obligations.

Now that you know the purpose they serve, let’s look at the information you may need to gather.

What do Landlords Screen for?

Renewal screening checks are similar to the standard move-in screening checks for potential residents. However, the only area they differ is in the scope of the information you may need to gather.

The following is the information that you’ll want to consider when conducting a renewal screening check for a resident:

Credit Rating

A prospective resident’s financial situation can change between leases. That’s why it’s important to check it again to ensure the resident is still able to meet their financial obligations.

Luckily, checking a resident’s credit report is quite simple. All you’ll need to do is obtain their written consent and run their details through a reputable credit referencing bureau.

The information you get will be the most complete and verifiable view of the resident’s financial habits.

Income

There is no substitute for the resident’s income. Knowing how much they make should tell you whether or not they would qualify to live on the property.

To get started, require the resident to provide you with a copy of their W-2 statement. This will help you get crucial information. Including, their total annual wages, and employer information.

Background Check

Finally, review the resident’s background to identify any relevant court history or other concerns that may have occurred during their lease or been missed during the original screening process. Fortunately, conducting these checks is typically quick and affordable.

Soft Checks

After completing the formal evaluations, take a moment to perform some informal or “soft” checks. Consider the following questions to help assess the resident’s overall behavior and reliability:

• Has the resident consistently paid rent throughout their tenancy?
• Has the resident caused any damage to the unit exceeding normal wear and tear?
• Have there been complaints about the resident from neighbors and other residents?
• Has the resident communicated issues promptly and appropriately?
• Has the resident kept every term of the lease?

If the resident checks the right boxes on these as well, continue with the process.

What Should Landlords Keep In Mind When Screening Residents?

When screening residents, keep the following things in mind:

Observe Fair Housing Laws

Check the local anti-discriminatory laws and note the protected classes. Examples of common protected classes include race, color, sex, and nationality. Next, ensure that your entire screening process treats residents fairly regardless of such classes.

Hire a Property Manager

An experienced property manager brings expertise and efficiency to the lease renewal process. They’ve conducted numerous renewal screenings and are familiar with the red flags and positive indicators to look for.

Bottom Line

While renewal screening checks can seem like an unnecessary burden, they are not! Done well as aforementioned, they can help you avoid potentially costly issues later down the road.

If you have a question or need expert advice on any aspect of property management, look no further than Compass Property Management. We’re a one-stop shop for all of your property management needs in Grand Rapids and the surrounding areas. Get in touch to learn more!