DAILY REAL ESTATE NEWS | THURSDAY, JUNE 07, 2018
Tenant screening is more than a credit or background check. But many landlords are failing to gather critical documentation that could help avoid approving tenants who later default on their rent, need to be evicted, or have other problems that cut into a landlord’s profitability, according to a new survey by the American Apartment Owners Association of more than 1,100 of its members.
Thirty-seven percent of landlords fail to collect paycheck stubs; 67 percent don’t ask for Social Security cards; and 20 percent never ask to see a driver’s license, the survey found. But all three are critical to screening tenants and avoiding losing “thousands” in lost rent, the AAOA says in its report.
The AAOA urges landlords to collect paycheck stubs to help determine if the tenant can really afford the rent. The higher their debt-to-income ratio, the higher the risk of a tenant defaulting on rent.
Further, the AAOA notes that a Social Security card remains the best form of identification. It shows the state in which it was issued and the tenant’s legal name. “Most importantly, should your tenant skip town and leave owing you rent, you will have a much higher chance of collecting that debt through a collection agency if you have [their] Social Security number,” the report notes. “In many cases, you can also use the [number] to trace the tenant’s new whereabouts to serve them a court summons as well.”
Likewise, a driver’s license also provides another layer of identification, including the date of birth and their most recent address. “These pieces of information are crucial when conducting a criminal and eviction background search,” the report says.
Source: American Apartment Owners Association