Here’s why the tenant screening process is so strenuous
You are feeling anxious because you have found the perfect rental home, and while you were viewing the home two other potential tenants showed up. So why is the agent taking so long to give you feedback on your rental application? And why do you feel almost as scrutinized as you would if you were applying for a 20-year home loan?
The most recent Tenant Profile Network (TPN) Rental Monitor Report provides some clue as to why the agent is doing such a thorough screening process before approving your rental application. According to the report tenant payment performance has been gradually deteriorating since 2014. “The percentage of tenants “in good standing” with their landlords reached a multi-year peak of 85.95% in the 3rd quarter of 2014. Since then, this percentage has declined by just over 3 percentage points to 82.77% by the 1st quarter of 2017,” states the report.
Sunell Afrika, rentals manager for SAProperty.com, says that landlords and agents are taking this trend indication as their cue and making sure that tenants are screened properly to reduce the risk of a lack of payment or other breach of the contract in future.
“Tenants might not understand why their application could take some time to approve, but there are certain items that need to be “ticked off a list” before any rental agent or landlord could consider signing a lease with a particular prospective tenant,” explains Afrika adding that this highlights the importance of tenants not leaving the search for a new rental property for last minute as this just puts additional strain on the tenant and agent for a fast outcome.
What to expect
Once you’ve identified a home you love and want to rent you will be required to submit all the required documents. This will include a detailed application form, a copy of your ID or passport, three to six month’s bank statements, proof of income and references from previous landlords. The agent or landlord will follow this up by conducting a credit check and finally check that all the information you’ve provided checks out.
Things the agent will consider during this process:
- Whether your income is high enough to comfortably afford the rental.
- If the salary statement matches the bank statement.
- If your credit record is clear.
- Whether you pay your bills on time.
Afrika says that often the agent also make use of the interview process with a prospective tenant to try and establish a “gut feel” from the tenant as the agent will ultimately advise the landlord on who to sign the lease with.
Landlords and agents are increasingly realising that it is more important to choose the right tenant than to hastily place someone in a property; as bad choices at the application and placing phase could lead to a loss of income later. “With the PIE Act and the Consumer Protection Act in place, it is important that the right choices be made before a contract is signed, as getting rid of a bad tenant later is lengthy and costly,” adds Afrika “Although the tenant screening process is not a guarantee that nothing will go wrong, it does help in placing a tenant who might prove to be an asset by paying his rent on time and in full each month and who wants to keep his lease in place for a long time to come.”
As a tenant it is understandable that you might feel eager to secure a sough-after home, especially in very competitive rental markets, but it is good to keep in mind that the application and screening process will ultimately benefit you as much as it will the landlord. When everything is done accurately and “by the books” it ultimately makes for a smooth, conflict-free relationship with your landlord and agent going forwad.