Are you a landlord wondering about renewal screening checks? Well, you've come to the right place! Renewal screening checks are a vital part of protecting your investment and ensuring your best tenants rent from you long-term, but many landlords aren’t familiar with the process.
In this article, we'll dive into everything you need to know about renewal screening checks, including what they are, why they're important, and how to conduct them effectively!
What are Renewal Screening Checks
A renewal screening check is the process of evaluating your current tenants when their lease is up for renewal to ensure they are still a good fit for your property.
This process includes conducting a background check, credit check, and rental history verification, just like you would for new tenants. The purpose of this check is to identify any potential issues or concerns that may impact a renter’s suitability for your property.
By conducting renewal screening checks, you can ensure that your rental property remains occupied by reliable and responsible tenants.
Renewal Screening Process
As a landlord, ensuring that high-quality tenants occupy your rental property is essential. Renewal screening checks can help you achieve this by evaluating your current tenants when their lease is up for renewal.
Below you can find the steps involved in a lease renewal screening.
Before conducting a renewal screening check, you must notify your tenants that this process will take place. You should include this information in your lease agreement and remind tenants a few months before their lease expires. If you didn’t include a renewal screening clause in your original lease, be sure to add it to any new leases you create.
Once you've notified your tenants that you’re performing a renewal screening, you'll need to collect specific information from them. This includes employment verification, and a credit report and background check authorization.
Analyze the Information
After collecting the necessary information from your tenant, you'll need to analyze it to determine if your tenants are still a good fit for your property. Additionally, check your records for things like late rent payments, lease violations, and property damage. If you notice any red flags, these tenants may not be the best fit for your rental.
Once you've analyzed the information, you'll need to inform your tenants whether they can renew their lease. If they pass the renewal screening check, you can offer them a new lease. If they don't, you'll need to explain why and provide them with a notice to vacate.
Update the Lease Agreement
If you've identified any minor issues during the renewal screening check, it's important to make any necessary changes to your lease agreement to prevent similar issues in the future.
Elements of Lease Renewal Screening
Renewal screenings for tenants are similar to those done for new tenants but are much simpler since you don't need to collect as much information.
Below is the most important information to review in a lease renewal screening.
Good credit scores indicate that a renter has a solid financial history, and credit reports offer the most comprehensive and reliable view of a tenant's financial habits. Keep in mind that credit scores can fluctuate between leases, so make sure to include this as part of your renewal screening consistently.
Income verification helps demonstrate a tenant's ability to pay rent on time. As job markets continually shift with the economy, verifying income between leases is essential.
A tenant’s court history and criminal record may change during their tenancy. Performing a background check will allow you to determine whether a renter has been convicted of any violent crimes while leasing your property.
Assess Your Records
While performing your renewal screening, check your records and ask the following questions to determine if your tenant has been a responsible renter.
- Were all rent payments made on time and in full?
- Did the renter have good relationships with other tenants and neighbors?
- Did the tenant consistently maintain and take care of the property?
- Were the terms of the lease agreement upheld?
Importance of Renewal Screening Checks
Renewal screening checks are crucial for landlords as they help ensure that their rental property continues to be occupied by responsible and reliable tenants. Here are a few reasons why renewal screening checks are necessary.
Identify Potential Issues
Even if a tenant was initially an excellent fit for your property, their circumstances might have changed. When you screen a tenant before renewing a lease, it allows you to see whether any changes in behaviour or other issues altered their suitability for your rental.
Protect Your Investment
Rental properties are a significant investment, and keeping them in great shape is a top priority for landlords. By conducting renewal screening checks, you can ensure that your tenants are responsible and will take care of your property.
High tenant turnover can be costly for landlords. In order to find new renters landlords need to spend money on marketing their rental and getting it rent-ready.
Renewal screening checks can help reduce turnover by ensuring your tenants are happy and satisfied with their living situation. This can encourage them to renew their lease and continue upholding the lease terms.
Peace of Mind
By conducting renewal screening checks, you gain have peace of mind from knowing that your rental property is occupied by responsible and reliable tenants who will take care of your property and pay their rent on time.
Renewal screening checks are an important part of the lease renewal process that can help ensure the success and longevity of your rental property. By conducting credit, income, and background checks, you can feel confident about renewing a lease with a current tenant.
Remember to consider the resident's history and behaviour in your unit before making a final decision. If you find the tenant screening process overwhelming, consider hiring a property management company like Pinnacle Property Management!