Vacancies are not ideal for your rental business. Not only do they mean you lose your passive income, but you have to accrue additional costs to keep your rental in good shape. Luckily, you can minimize the risk of vacancies by finding long-term tenants.
Longer tenancies come with a stable passive income and the peace of mind of knowing your rental is taken care of. So, it makes sense to want good tenants to stay on your property after their lease is over. However, when a tenant wants to stay after their lease is up, simply renewing the rental agreement is not the best course of action.
Rushing into a renewal can lead to issues such as disputes, missed rent, and even evictions. A positive experience with a tenant in the past is no guarantee that they won’t cause any issues moving forward.
The best way to keep your investment protected is to perform a screening check before signing a renewal lease agreement. Keep reading to learn how to perform successful screenings while keeping your renters happy!
Benefits of Renewal Screenings
The main goal of tenant screening is to ensure you ensure that your renters are responsible and trustworthy. Renewal screening checks have the same purpose. A lot can change for your residents over the course of their lease. So, if you want to keep yourself and your property protected, it’s better to go the safe route.
A renewal screening will give you the peace of mind of knowing that your renters will pay you on time and comply with the terms of the new lease. Here are other benefits of renewal screenings:
Save money. A renewal screening can help you avoid issues that can cost you a lot of money in the long run, like emergency repairs, legal fees, and evictions.
Keep tenants happy. Renewal screenings allow you to get a better understanding of your tenant’s life and finances. This can help you update the terms of the list in a way that benefits both you and your renters!
Reduce tenant turnover. With a lease renewal screening process, you can identify if tenants will remain responsible and reliable in honoring the terms of the lease. This can significantly reduce the tenant turnover rate!
Avoid evictions. Evaluating a tenant’s financial status and behavior during the renewal process can help you identify potential issues before it’s too late and the only course of action is an eviction.
Reduce stress. While you may already trust your tenants, performing a renewal screening will help to put your mind at ease. It will give you proof that they are still responsible and trustworthy renters.
How to Conduct a Renewal Screening Check
Renewal screenings are not too different from new resident screenings. Although, they’re easier because you don’t need to gather as much information.
Here’s how to conduct a lease renewal screening process in only five steps:
1. Review Their Rental History
Think back about the tenant’s rental history with you. Did they always pay rent on time? Did any complaints or issues arise during their tenancy? Did they comply with the terms of the lease? If the answer to these questions is positive, the tenant is worth keeping. If not, renewing their lease might not be a good idea.
2. Request Their Updated Financial Information
As a landlord, you want to ensure you’re renting your property to someone who can pay rent on time every month. That’s why it’s important to request updated financial information from your tenants before renewing their lease. Make sure to ask about their current employment status, income, and credit score.
3. Conduct a Property Inspection
Inspecting the property once a tenant’s lease ends allows you to identify any damage or maintenance issues that need to be addressed. This will let you know whether the tenant has maintained the property in good condition and has honored the terms of the lease regarding property maintenance. A tenant that doesn’t care for your property is not worth keeping.
4. Criminal Background Check
Even if you think you know a renter well, performing a criminal background and court history check is essential. This will help you determine whether they pose a risk to your property or neighbors. Plus, it can save you a lot of headaches in the long run.
5. Offer a Lease Renewal
After completing the screening process, it’s time to determine whether to renew the lease. If the tenant has been responsible and has met the screening criteria, you can go ahead and renew their lease.
Once you decide to offer a lease renewal, you must draft a new rental agreement. It should include any changes to rent, lease duration, or other provisions. Always make sure that the tenant understands and agrees to the new terms before signing the lease agreement.
Tips for Renewal Screening Checks
While a renewal screening can be greatly beneficial for you as a landlord, your tenants might not be happy about it at first. Here are three tips for introducing easy, non-intrusive renewal screening checks to all your leases.
Be aware of FHA guidelines. Keep the process non-discriminatory by following local Fair Housing laws. Additionally, make sure to make renewal screenings a standard practice in all your leases.
Disclose renewal terms beforehand. It’s best to tell tenants about any required renewal screenings from the beginning of their lease. This will help you avoid future misunderstandings or disagreements.
Hire a third-party professional. Renewal screenings can cause a rift between you and your tenants. You can avoid this by hiring a professional to handle the process for you. At SGI Property Management Dallas, we screen for success, ensuring that only the best tenants occupy your rental!
Bottom Line
Renewal screening checks may seem like a waste of time, but we can assure you that they’re worth it! They give you the peace of mind of knowing that your renters remain reliable and responsible.
Plus, they help you keep yourself and your property protected from liabilities. Now that you know the importance of additional screening checks, you can add this requirement to all your future lease agreements.
If you have any more questions about renewal screenings, contact SGI Property Management Dallas! With our tenant screening services, you’ll be able to rest assured knowing that your property is in good hands.
