When it comes to managing occupied rental properties, the relationship between landlords and tenants is of utmost importance. Property owners should never rush their decision when choosing a new tenant. Handing over the rental property to a stranger without proper inspection can be a great risk. To mitigate such a situation, landlords should devise a proper screening mechanism for running background checks on potential renters.
To assist property owners and managers we have compiled an essential checklist on how to screen potential tenants with some easy-to-follow steps.
How to Screen Potential Tenants: Crucial Steps for Landlords to Consider
Before finalising the tenancy agreement, go through these essential tenant screening steps.
Look for Someone with Good Credit Score
Before shortlisting the tenant, it is better to check the credit score. To request a credit report in the UAE, the tenant’s consent is required. Plus, they should be willing to provide the relevant supporting documents.
A higher credit score in the tenant credit screening typically indicates a history of responsible financial behaviour, including making payments on time and managing debts effectively. According to Al Etihad Credit Bureau (AECB), the credit score residents are given runs between 300 and 900. This entirely depends on their financial history and transaction records.
If the score is above 700, it is considered good. However, if the credit report of an individual has a score below 600, it is concerning. If the tenant is unable to make rental payments or financially manage the rental increase, it could lead to rental disputes. In such a situation, landlords, property managers and even tenants can contact the Rental Dispute Settlement Centre in Dubai.
Check Employment Status
This is one of the most crucial steps of our checklist on how to screen tenants. Landlords should confirm a tenant’s employment status and get an idea of their average monthly income, if possible.
These steps help assess the renter’s income stability, according to the required income-to-rent ratio. As a general rule of thumb, a tenant is expected to earn at least three times the rent amount.
Employment verification can prevent landlords from renting to tenants with an unstable job history and the consequent financial challenges. Like credit score checks, this also reduces the likelihood of potential rental payment issues or defaults. However, if such issues arise, here’s how to report a rental-related dispute as a Dubai landlord.
Check for Conduct and Criminal Records
Checking for the good conduct and police records of tenants is another prudent rental tenant screening practice for landlords. It ensures the safety and security of their rental properties.
To put things into motion, a landlord or property manager can visit their tenants’ current or previous neighbourhood. They can ask around in the community about the social behaviour and participation of their potential renters.
Besides, if there’s no urgency, shortlist only those tenants who have acquired the Rental Good Conduct Certificate. It provides further assurance that the renter has maintained a good track record with previous property owners and managers.
To vet the tenant for criminal activities, ask for their police clearance certificate. As a landlord, make sure not to hand over the house keys without these background checks and confirmations. It is one of the crucial steps to screen tenants.
Use Social Media
When it comes to tenant screening, social media can also be a pretty useful tool for landlords. By exploring a potential tenant’s online presence, property owners gain access to information beyond what traditional screening methods provide.
Examining an individual’s social media profiles can be a good way to learn about their lifestyle preferences. However, all this research depends on the availability of data. Remember, not everyone shares their life events online. Moreover, don’t treat everything you see on social media as the final word as many people use it just for fun. Exercise caution and maintain respect for privacy when leveraging social media as a tenant screening tool.
Go for In-Person Interviews
Landlords should have face-to-face interactions with renters before getting into a legal agreement. This is a good way to clarify matters regarding the usage and management of rental properties. There should be a proper interview process for effective tenant screening.
Property owners and managers should prepare a list of interview questions to ask the applicants. The responses can help gauge their behavioural aspects and reactions to different situations. Furthermore, talking over all the crucial matters right from the start can help maintain a good landlord-tenant relationship in the longer run.
Check If the Potential Tenants Own Any Pets
We believe that it is essential to include a question regarding pets in your tenant screening checklist. A landlord or property manager must know whether their shortlisted renters have furry friends or not. This will help them prepare accordingly and make an informed decision. It is another useful tip on how to screen a new tenant.
Many landlords don’t prefer to have any pets on their property. It is mainly due to concerns about cleanliness, hygiene and potential property damage. That said, whatever the pet policies are should be communicated with the tenants beforehand. Here are a few more things to consider before bringing a pet home.
Discuss Tenancy Agreement Terms Beforehand
Now we come to the most important part which is the tenancy agreement. Prepare a rental contract checklist and add all the important clauses to it. From rental payment terms and increments to handling the maintenance and repair responsibilities, list down and discuss everything.
The scenarios where early termination becomes necessary should also be discussed and mutually agreed upon. Furthermore, go through the laws and regulations for a tenancy eviction notice in Dubai, as well as other Emirates. Make the rental contract legally detailed and share it with your prospective renters for a thorough read before they sign it.
There you have it – a detailed checklist for property owners and managers on how to screen potential tenants. Make sure to learn about the landlord rights and responsibilities in Dubai and other cities before outlining the tenancy contract.
On a side note, if you are eyeing an investment in rental real estate, there is an impressive array of options available. Start your property hunt off on the right foot by browsing these properties for sale in the UAE.
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