Renewal Screening Checks

Investing in a rental property can be a great way to earn a steady passive income. Plus, you’ll also be able to benefit from property appreciation rates over time, ensuring a great return on your investment. However, your rental property will only produce a truly passive income as long as it’s leased. 

Retaining tenants for the long term is one of the most challenging aspects of owning a rental property. Luckily, you can increase your chances of finding reliable, long-term tenants with a good screening process.

This should not only include initial background, credit, and rental history checks but also a renewal screening if tenants want to extend or renew their lease. 

Don’t know what a renewal screening check entails? Don’t worry, we’ve got you covered! In this comprehensive guide, the experts at TrueNest Property Management will go over everything you should know about renewal screenings, including tips and best practices for conducting them. Let’s dive in!

What Is a Renewal Screening Check?

A renewal screening check is a process where landlords re-evaluate existing tenants to determine whether they’re fit to renew their lease agreements. 

This process is very similar to the initial tenant screening because it includes a thorough assessment of the tenant’s credit history, credit score, employment status, and criminal background. However, it also requires an examination of the tenants’ behavior and ability to comply with the lease agreement during their initial tenancy.

Why Are Renewal Screening Checks Important?

A lot can change in the span of a couple of months, let alone in a whole lease term. Over their stay, your tenants could lose their jobs, ask their partners to move in with them or stop taking care of your property.

Conducting a renewal screening check will allow you to make informed renewal decisions, reducing potential issues and protecting your investment. 

In addition to helping you ensure that your tenants will continue to be responsible and reliable, conducting renewal tenant screening checks will provide you with the following benefits:

• Financial Stability: Changes in employment or financial difficulties can impact the tenant’s ability to pay rent over time. Reassessing a tenant’s financial status helps you ensure that tenants can continue to afford rent. 
• Well-Maintained Property Condition: Reviewing a tenant’s rental history and current behavior will help you determine whether they are taking good care of your property. Ensuring tenants are consistent with their upkeep reduces maintenance costs and preserves the property’s value over time.

• Minimized Legal and Safety Concerns: A background check can reveal any new criminal activities that might pose a risk to other tenants or the property itself. With a renewal screening, you’ll maintain a safe and secure living environment in your rental.
• Eviction Prevention: Identifying potential issues early on will allow you to address them before they escalate. This will help you reduce the risk of eviction significantly.
• Reduced Turnover Costs: Renewal screenings can help you retain tenants for longer periods, reducing turnover costs and long vacancies.
• Stable Passive Income: By conducting a renewal screening check, you can ensure that your tenants still have the means to pay rent. This can help you minimize the risk of late or missed rents and ensure steady profits. 

The Elements of a Renewal Screening Check

Renewal screenings are very similar to first-time tenant screenings. They can be even easier since you’ll already have some insights into what a tenant is like. Since the purpose of a renewal check is to determine whether you should renew or extend a tenant’s lease, you must collect the following information:

• Credit Reports: This will help you assess the tenant’s financial stability.
• Rental History Checks: This can be a questionnaire or a summary of your experience with the tenant to determine whether they’ve been responsible.

• Criminal Background Checks: This will ensure the tenant won’t be a risk to neighbors, other tenants, or your property.
• Employment or Income Verification: Employment documentation will help you ensure tenants have the means to continue to pay rent.
• Reference Checks: It’s a good idea to ask references from current employers and past landlords to double-check the information mentioned above.

How to Conduct Successful Renewal Screening Checks

When done correctly, renewal checks can be incredibly beneficial to landlords. They can reduce turnover costs and ensure regular property maintenance and compliance with the terms of the lease. 

Here are some tips to help you conduct successful renewal screening checks:

• Follow Fair Housing Guidelines: Ensure the process is non-discriminatory. You can do this by making renewal checks a standard practice on all your leases and avoiding using discriminatory language during the process.
• Disclose Renewal Terms from the Get-Go: Renewal screening checks can be an ugly surprise for tenants. To avoid disputes and misunderstandings, you must disclose renewal requirements, including undergoing a renewal screening process, to tenants when they first sign their lease. 
• Hire a Professional: Tenant screening can be a time-consuming process. Hiring a professional to handle the process, will save you time and ensure unbiased results.
• Keep Important Data Confidential: You must safeguard tenants’ important information following your local data privacy laws and regulations.

• Set the Right Timing: The best time to conduct renewal screening checks is before the current lease expires. By setting the renewal check in advance, you’ll have more time to decide whether to extend the current lease or find new renters. 
• Keep Detailed Records: Maintain accurate and organized records of all the information you’ll need for the renewal screening checks. This will help you avoid misplacing important documents or breaching tenants’ privacy. 

Bottom Line

If your current tenant wants to extend or renew their lease, you shouldn’t jump the gun and agree on the spot. Instead, you should take the time to conduct a thorough renewal screening check. 

This will help you ensure that tenants are still a good fit for your rental and have the means to continue to pay rent on time. Now that you know what renewal screenings entail, and how to conduct them effectively, you’re better prepared to make an informed decision!

Need help screening new or old tenants? Contact TrueNest Property Management! We’ll help you find the perfect tenants for your rental.