A lot of landlords actively seek out and try to attract long-term tenants for their properties. These are tenants who pay their rent promptly, maintain the property clean and well-maintained, and comply with the terms of their lease agreement.
In most cases, long-term tenants are found and selected through the use of a comprehensive tenant screening process. Thus, knowing that a tenant is reliable and responsible would make renewing their lease a non-issue.
However, it’s discouraged to renew a lease after it expires without completing a comprehensive renewal screening check first. A renewal screening check allows you to identify any issues that may have developed during the initial lease period, and protect your home and investment.
If you’re not sure how to go about conducting renewal screening checks, you’ve come to the right place! In this article, the Pro X Property Management team explains how to go about renewal screening checks smoothly.
The Importance of Renewal Screenings
Landlords who don’t understand the importance of renewal screenings are more likely to skip them. If they have a quality tenant who always pays their rent on time and hasn’t caused any issues, landlords may rely on that established trust as a basis to renew the lease.
However, it’s important to understand that a lot might have changed during the initial lease period, such as a tenant’s financial position or their employment status, which could interfere with their ability to pay their rent on time.
Done right, a renewal screening check reduces the possibility of future conflicts and protects your investment property from damages. It’ll also give you the peace of mind of knowing your tenant remains reliable and capable of paying their financial dues.
What to Include in a Renewal Screening
A renewal screening check usually covers the same things as the initial tenant screening. However, since you’re already familiar with the tenant, the process may be easier and less time-consuming. Here are the main elements you should include in a renewal screening:
Credit check. The success of your rental investment is dependent on the ability of your tenant to pay rent. Performing a credit check gives you a good idea of their financial habits.
Income verification. Due to the Covid-19 pandemic and the global tech wave, there has been a massive employment reshuffling. You can ask your tenant to share a copy of their W-2 statement, as well as workplace references.
Criminal background check. While potentially unlikely, it’s important to ensure the tenant hasn’t been involved in a criminal case during the course of the initial lease.
Although it might seem redundant to conduct these checks again, it’s important to stay up to date on the tenant’s status and life changes. Obtaining the above information will help you make an informed decision about the tenant and the renewal option.
How to Conduct Renewal Screening Checks
In this section, we will outline how you can conduct renewal screening checks.
Compliance with the Fair Housing Act
The Fair Housing Act (or FHA) provides legal guidelines to prevent housing discrimination of any kind and keep the process fair. In Missouri, landlords are prohibited from discriminating against an applicant or tenant on the basis of race, color, national origin, ancestry, religion, sex, familial status, and disability.
It’s recommended that landlords create a standard screening process for all tenants. If you encounter any challenges with the interpretation or implementation of the Fair Housing Act, you can always reach out to a property professional for assistance.
Inform Your Tenants Beforehand
In order to make the process easier, renewal screening checks should be clearly outlined in the lease agreement. As such, once the lease expires, you simply have to refer to the rental agreement if the tenant has any questions or objections.
If you come upon this information late, once a tenant has already occupied the space and signed the lease agreement, there are still options.
You can create an addendum to the lease agreement and have a sit down with the tenant. Explain the rationale to them, answer any potential questions, and have them sign the addendum.
Renewal screening checks are essential to running a successful rental business. Not only does it give you extra peace of mind, but it helps protect your home and investment each time you renew a lease agreement.
If you have any additional questions on renewal screening or feel as though you don’t have the experience to conduct one, don’t worry! Offering quality management services to landlords in Southwest Missouri and Southeast Kansas, Pro X Property Management is the company to call upon.
Our company is known for its integrity, accountability, and comprehensive management solutions. Our property managers are the best in the industry: experienced, licensed, and well-trained. Get in touch with us today and receive a quote for our property management solutions!