The trick to successfully owning a rental property is to find trustworthy, long-term renters. So, when a tenant wants to renew their lease agreement, you may want to rush into it. But it’s better to take your time. This way, you can ensure you’re protected from common issues, such as complaints, costly disputes, or even evictions.
Performing lease renewal screenings is a great way to protect yourself from tenant-related issues. You may be wondering what’s the point of this if you already know the tenants and screened them before they signed their first lease agreement. Well, with a renewal screening, you can spot any potential problems before they escalate. It can also help you decide whether or not to renew a lease agreement in those cases where you’re unsure.
If you want to learn more about the benefits of renewal screening checks, we at SCUDO Real Estate & Property Management have got you covered! We’ll also give you tips for conducting successful and effective tenant screenings that won’t affect the relationship you’ve built with your renters.
Benefits of Renewal Screenings
The main goal of tenant screening is to ensure you find trustworthy renters. But when a lease is up and tenants want to renew it, many landlords skip renewal screenings. While a positive experience with tenants can make you trust them more easily, it’s no guarantee that you won’t have issues with them in the future.
A lot can change for your tenants during their initial lease. So, if you want to protect yourself and your property from liabilities and property damage, it’s better to perform a renewal screening. This will give you the assurance that your renters will still be able to pay the rent on time and follow the terms of the new lease. Additionally, it will provide you with the following key benefits:
- Saving Money - By re-screening tenants, you can identify any issues that can cost you money in the long run. This can include emergency repairs, mediation between residents, eviction, and other legal fees.
- Getting to Know Your Residents Better - Additional screenings give you a better insight into your renter’s financial situation. It also allows you to understand their concerns or problems regarding the rental agreement. In the long run, this will help you build a better landlord-tenant relationship.
- Updating Your Resident’s Status - A lot can change for renters over the course of their lease. Performing a renewal screening allows you to better understand where they stand when it comes to their finances, credit, and other aspects that may affect you as a landlord.
- Peace of Mind - While you may already trust your tenants, performing a renewal screening will put your mind at ease. It can provide more assurance that they will continue being responsible and trustworthy renters.
Elements of Renewal Screening Checks
The renewal screening process is similar to screening prospective tenants, but easier since you won’t need to request as much information as you did the first time around. Below is a list of the essential details you should pay attention to when performing a renewal screening check:
Credit reports give a look into your tenant’s financial habits. Good credit, for example, is proof that your resident is responsible enough to make rent payments on time. Because the results of a credit report can change a lot between leases, it’s essential to verify a renter’s credit before letting them sign a new lease.
Performing a criminal background and court history check is a safety measure you should never overlook. This way, you’ll have peace of mind knowing that your property is in good hands during their tenancy.
As a landlord, you want to ensure you’re renting your property to someone who can pay rent on time every month. That’s why verifying your renter’s income and employment status is essential. You can do this by requesting a recent copy of their W-2 statement. Even if they provided this information during the initial lease period, their financial situation could have changed, so it’s best to check again.
Soft Background Check
It’s important to take into consideration how tenants behaved during their prior lease. Consider if they:
- Paid rent on time
- Stuck to the responsibilities stipulated in the lease
- Maintained the property in good condition
- Had any issues or complaints brought against them
Answering these questions is the simplest way to know if you’d like to have them renew their lease.
Tips for Effective Renewal Screenings
Performing a renewal screening is a great way to avoid potential problems with a new lease. Below are some tips for an effective renewal screening that will give you the security you need to renew a lease while keeping your renters happy:
- Disclose Renewal Terms Beforehand - To avoid misunderstandings or disagreements, it’s best to disclose renewal terms, including renewal screenings, in your initial lease agreements.
- Follow the Fair Housing Act (FHA) Guidelines - To comply with FHA guidelines, you should make renewal screening checks a standard across all your leases. If you want to ensure the process is truly non-discriminatory, you can reach out to a legal professional for guidance.
- Seek Professional Help - Tenant screening can be a demanding and time-consuming process. Hiring a KC property manager to handle the screening can save you time and effort.
At first, performing additional screenings can seem like an unnecessary process. But now that you know the benefits and elements of an effective renewal screening check, you can take the next steps to protect your business.
If you have any more questions about renewal screening or are looking for professional guidance, reach out to SCUDO Real Estate & Property Management! With our property management services, you can rest assured that your property will be in good hands.