The Ninja Guide to the Tenant Screening Process

What in the world is a Ninja Guide? Coined by President and CEO of Consumer Electronics Association (CEA), Gary Shapiro, the Ninja Guide is a metaphor Shapiro uses to demonstrate how to create a ‘killer strategy’. It is defined by clear goals, flexibility, focus on competition and innovative thinking.

Shapiro has worked with big-name companies like Apple and Google. But his ideas can be applied to any industry. Here is my Ninja Guide to the Tenant Screening Process. Master these skills and you can easily weed out the enemy.

The Art of Success - Visibility

You’ve got the advertising strategy for your property. It’s in the best possible condition for an inspection and you’ve attracted a large pool of qualified potential tenants.

Now it’s time to find the chosen one.

Rule number one - don’t let a large upfront payment or rental amount fool you. It is important to check the applicant’s background. Look at factors like references, rental history, and income.

Code of the Ninja - the tenant screening process

1. Collect back as many applications from potential tenants as you can. If you only have one application don’t hold off, time is of the essence. I’ll explain why in a minute.

2. Check to see if those people completed all the application questions. Check for 100 Points of ID and proof of income. If the total income will not cover the rent, put the application to the sword.

3. Take a quick scan of all the applications. Pick 3 people you find suitable for your property. Have a think about the number of adults and children, their ages and the type of people they are. It’s important to consider this for two reasons. If their lifestyle matches your property, they are likely to stay a long time, saving you from going through this process anytime soon. Secondly they will be more likely to pay the rent and look after the house.

4. Pick your top 2 applications and start getting your hands dirty:

• Living History
• Find out why they are moving and speak to the current and previous people they have rented from. All the questions you need to ask the references will be covered in the next chapter to this blog.

• Work / Income Habits
• Have a chat to their current and previous employers. It’s important to back up their claim about the amount of money they earn and find out if their job is stable. Will they be able to pay the rent in 6 months time?

• Personal and Professional References
• Look into their character and find out about the type of people they hang out with and who they think would give them good references. Read between the lines.

While checking up with all the references make sure there are no contradictions or signs that give you a bad feeling. For example, if the applicant’s current property owner said they would not rent to that person again, this is a huge warning sign. Stop there and do not proceed with this application.

If everything checks out, the last step is to consider your good old instincts. Then call the applicants to arrange the first payment of rent and signing of the lease.

Ninja Mental Attitude - plan for the unexpected

Looking after your rental property is like running a business. Contingency plans are a must. The preparation of having a back-up plan or “Plan B” is to provide an option to operate your business efficiently and minimise potential loss of revenue. In regards to the tenant screening process, get back to all applications within 48 hours, because if they pull out after you have given them the go ahead, you can fall back on your next favourite applicant before they find another property.