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Rental Verifications: Are They Still Relevant?

Rental Verifications: Are They Still Relevant?

I was recently participating in an online discussion among other property managers about the rental application and approval process for residential properties. Since this is at the core of what we do, I was intrigued by the conversation.

One of the participants indicated that their company no longer bothers with rental verifications as part of their standard screening process, citing the length of time it can take to get responses back, and a lack of useful data that affected their approval ratings one way or the other, as reasons for this policy change.

While I don’t disagree that the application process can be a bottleneck when prior landlords don’t respond to verification requests in a timely fashion, or applicants themselves are slow to submit proper verification documents, I cringe at the idea of approving applicants without verifying their residency/rental history.

In our experience, the residency/rental verification is still an excellent barometer for foretelling whether or not an applicant will be an excellent tenant. Even if the only information gleaned from the verification indicates that a tenant regularly paid their rent on time or not, this is valuable data to add to an applicant’s overall risk factor.

Our goal is always to place the most qualified tenant in the property. We view this as our fiduciary obligation to the owners we manage for. The owner’s best chance at a great return on their investment is long periods of uninterrupted occupancy. Achieving that requires attracting, thoroughly vetting, and placing an applicant who shows every indication of being an excellent tenant.

What do we hope to learn about an applicant from their residency/rental history?
• They paid their rent on time
• They cared for the property and their occupancy didn't result in any damage beyond normal wear and tear
• There were no Lease violations, HOA violations or neighbor complaints during their tenancy

There are many factors that are reviewed and weighed as we consider the approval of each applicant: income, credit history , criminal background, and so much more. In our opinion, a thorough review of an applicant should still include any relevant data that we can obtain through a residency/rental history verification. In this way, we are fulfilling our obligation to reduce the risk of a tenant default as much as possible, to ensure the success of our client’s investment journey.