Ask Lucas 022: Tenant Screening in Less than an Hour?
Summary: Francie from Indiana asks about my methods to screen tenants quickly and effectively. Quality tenant screening requires reviewing lots of documentation and talking to other landlords. Learn how I do this in 1 hour or less. Full Transcript: Lucas: Hi and welcome to the 22nd episode of Ask Lucas. Today we’re talking about how I screen tenants in one hour or less. Yes. It’s possible. I’m Lucas Hall from Landlordology and Cozy. This is a bite size Q&A show where I answer your questions about landlording and property management. I have some big news for you guys. This week, Cozy released a background check product which means that, not only can you get credit reports … full on credit reports with all the data and the score, through Cozy. But you can also get background checks which cover; evictions, and national, and criminal, and terrorist watch lists, and sex offender databases. You can get all of that for free by using Cozy. There really is no catch. Cozy still makes money. They make their money on the applicant who pays for those reports. Then they make enough on that that they can actually give away rent collection for free, which is a nice bonus. That got released this week. Now you can request background checks in addition to your credit reports. This week’s question is from Francie, who appropriately asks how to screen tenants quickly and effectively and still get really high quality tenants. Let’s hear what she has to say. Francie: Hey Lucas. My name is Francie and I’m calling from Gary, Indiana. I heard you say that you can screen an applicant within one hour. Usually, it takes me several hours, even several days, to get all the information I need. How can you do that so quickly and still get the great tenants? Thanks for your help. Bye Lucas: Hey Francie. Thanks for your question. Your comment suggests that you might have read my tenant screening guide in which I do talk about how I spend only about an hour on each applicant or group of applicants. Props to you for doing that because there is a step-by-step guide in there and it’s really helpful. I will answer this question with that in mind. Basically, you are absolutely right. I don’t spend any more than an hour. I love doing tenant screening. I have a passion for finding high quality tenants. I like to claim that I have a little gut feeling about bad tenants that usually ends up being proven right. What I do to find high quality tenants with the least amount of work is that I require all of my applicants to submit a credit report and a background check when they submit the application. I don’t tell them to go get those on their own, because they will forge them. They will Photoshop a credit report and they will come up with a background check from a company I’ve never heard of. What I do is I use Cozy’s online applications. With full disclaimer, Landlordology is brought to you by Cozy. I am an employee at Cozy. But even if I wasn’t, I would still use it because the tools are awesome. I’m a landlord. I was a landlord before Cozy and I’ll be a landlord after Cozy. The online applications are standardized. They are easy to use and a tenant can fill it out on their phone. What I do is I … In the system, I require that they pay for and authorize a credit check and a background check that Cozy does automatically when they submit their application. When I get an email that says, “Hey. You have a new applicant. Here’s their application”. The credit report and the background check are included. It’s right there and I can just look at it. I don’t have to go back and ask for more information and then wait for all 3 or 4 of the applicants in the group to get their act in gear or come back from vacation to handle it. It’s just all there and done. I don’t even have to spend time on them until I have all the information. I do end up showing them, typically. That’s about 75% of the time. Tenants want to see a place before they actually rent it. Every once in a while I’ll get an out-of-state person who doesn’t care. The pictures are great and they’ll rent it site-unseen. But most of the time, they want to see it. I’ll spend maybe half an hour showing them a place. Then, maybe 10 minutes on the phone with them doing a pre screening before that. Add it all up. Between the review of the credit report and background check, and the application, and then calling former landlords, which is probably 20 minutes of time … calling and leaving voice mails and talking to people. Add it all up. It’s about an hour. It’s not one consecutive hour, but it’s about an hour. I can live with that. I follow all the steps. I have my standards for credit scores and convictions. If they pass, they pass. I’ll know about everything within an hour. I hope that helps you. I hope that you’re able to find some really high quality tenants in the future. I know that if you require credit reports and background checks with the application submission, then your process will improve. I know, for me, I’ve reduced the amount of time per group of applicants by about 3 hours. I think that you’ll see a definite improvement. For me, it was the simplest way to cut back the most amount of time, with the least amount of effort. I still get high quality tenants because, quite honestly, if they have evictions or really horrible credit or a ton of debt, I’ll know right off the bat. I don’t even have to bother with calling past landlords because I can rule them out within a matter of minutes. It won’t even take the full hour. Thanks again for listening. Take care and happy landlording.