Tenant Screening Best Practices for Property Managers | Insights from BCG Real Estate Group

Tenant screening is a huge part of the property management process, and if you want to succeed as an investor, you will eventually need to get good at it—or outsource it to someone who is. Our team at BCG Real Estate Group has learned many hard lessons along the way and has scars and new processes to show for it.

Proper screening significantly reduces the risk of evictions down the line. Over the years, we’ve dealt with a few evictions (which are inevitable the longer you’re in this business and the more you grow), and they all suck. We later realized that at least half could have been prevented with more thorough screening processes. In Cook County, evictions take at least six months and cost a minimum of $2-3K, even if everything goes smoothly. They are expensive, physically and mentally draining, and can sometimes be dangerous.

So, what are some of our key processes, you ask?

First, use reliable background and credit check software. We used to rely on the free Zillow software, and while it’s convenient, it has vulnerabilities and can be tricked. We’ve since switched to Rent Butter, which takes a more forensic accounting approach by linking to an applicant’s bank account to verify if the income they claim is accurate.

Second, make calls to verify information. We now routinely contact previous landlords and employers to ensure tenants aren’t trying to pull a fast one on us. We also ask non-standard questions or questions that they should easily know but may not have synced with the applicant. This approach can help us weed out fake numbers or the “call my boss” scenario, where the reference is actually a friend.

Third, ensure that tenants pay everything upfront before receiving any keys. If a tenant has a questionable financial history or has been late on payments in the past, we recommend collecting the move-in fees and first month’s rent as a cashier’s check, money order, or through Zelle/Venmo (cash is not recommended). While we prefer our management system to handle most, if not all, payments, issues can arise when payments bounce. Sometimes a tenant can make it appear as though they’ve paid, only for us to receive an insufficient funds notice five days later. Once the tenant is in the house, getting them out can be a real challenge!

Finally, we try our hardest to collect as much information on applicants as possible so that if issues arise, we have more insights than just what’s on the application. For instance, collecting emergency contacts has saved us a lot of trouble; we were able to stop an eviction by reaching out to a tenant’s parents when the tenant stopped communicating and paying us.

In the end, there are still ways for individuals to slip through the cracks. Criminals are becoming increasingly sophisticated, using fake identities, false social security numbers, forged documents, W-2s, and more. By following just a few of these best practices, you can significantly reduce your risk.

Tired of unclogging toilets at 2 AM and in need of property management services? Give us a call to schedule an initial consultation with one of our experienced professionals, who can help you understand how we can best meet your needs. Call 773-207-4787 or email bcgrealestategroup@gmail.com.