How can you develop and implement a tenant screening process?

As a commercial landlord, you want to find reliable and profitable tenants for your properties. But how can you ensure that you are selecting the best candidates for your space? A tenant screening process is a systematic way of evaluating potential tenants based on their financial, legal, and business background. It can help you avoid costly vacancies, evictions, damages, and disputes. In this article, we will show you how to develop and implement a tenant screening process for your commercial leasing business.

Find expert answers in this collaborative article

Selected by the community from 2 contributions. Learn more

1 Set your criteria

Before you begin screening applicants, it's important to define criteria for accepting or rejecting them. This should be based on your property type, location, market demand, and risk tolerance. Common criteria may include credit score and history, business plan and financial statements, industry and market analysis, references and reviews, and insurance and security deposit requirements. Additionally, it's essential to ensure your criteria are consistent, transparent, and compliant with fair housing laws and anti-discrimination regulations in your area.

Add your perspective

Paul Mulligan JP

Real Estate Buyers Agents Property Strategist @ Sydney Buyers Agent | Real Estate Investment|Harvard Trained Negotiator
Report contribution
The number one problem is the lack of systems. When I was the department manager of PM I walked into a complete mess. I implemented the following: 1. A new application form to capture everything that was double-sided. 2. A checklist from the application stage right through to move-in. 3. A vacant whiteboard with tenants exiting a property. 4. A process for managing the vacate. The property managers were incentivized by a 10% commission. If the processes weren't followed they'd lose the commission for that property. I restructured everything operational too.

Like

2 Advertise your property

To attract qualified applicants, you need to advertise your property by utilizing various channels, such as online platforms and directories, social media and email marketing, networking and referrals, signs and flyers, or brokers and agents. When advertising, make sure to emphasize the features and benefits of your property, such as the size, location, amenities, price, and lease terms. Additionally, including your screening criteria and application process in your advertisement can help you filter out unqualified or uninterested applicants.

Add your perspective

3 Collect and review applications

The next step is to collect and review the applications from the interested applicants. You can use online forms, email, or paper documents to gather the information you need, such as name and contact details, business name and type, desired lease term and move-in date, income and expenses, credit report and authorization, business license and permits, and references and testimonials. It's important to verify the accuracy and completeness of the information provided by the applicants. To do this, you can use online tools, phone calls, or site visits to check their credit, background, references, and business operations. Additionally, you should compare applicants against your criteria and rank them according to their suitability for your property.

Add your perspective

4 Conduct interviews and inspections

After reviewing the applications, you should conduct interviews and inspections with the shortlisted applicants. This will give you an opportunity to meet them in person, ask questions, and gain insight into their personality and professionalism. You can also demonstrate your property and explain the features and expectations. Additionally, it's important to prepare a list of questions and topics to cover during the interview and inspection such as business goals, experience, customer base, growth potential, lease preferences, and negotiations. It's also wise to take notes and record your impressions of the applicants during the process. You should be on the lookout for signs of honesty, reliability, compatibility, and profitability.

Add your perspective

Tobi Eniafe

Helping clients make seamless effort in securing their retail rollout expansion || Worked along side 20+ International and National retail brands || Site Acquisition for retails || Real Estate Manager || FM Enthusiast
Report contribution
Understanding the process when it comes to prospective tenant selection is crucial for any property -- Enlisting needed info about the prospect, who they are, where they work, why they are leaving their first place of location, what type of job they do and the family background -- Providing an inventory list for inspection and making reference to what was functioning before the client comes in -- Having a detailed and we'll laid down rules with respect to the tenancy agreement on what the tenant and owner responsibility (ies) are

Like

5 Make a decision and sign a lease

The final step is to make a decision and sign a lease with the selected applicant. You should notify them of your decision, sending a lease agreement that outlines the terms and conditions of the rental, as well as requesting insurance certificate and policy, security deposit and first month's rent, business registration and tax ID, signed lease agreement and addenda. You should review the lease agreement with the applicant, explaining the clauses and responsibilities, then conduct a walk-through of the property to document the condition and inventory. After that, you can exchange the keys and welcome the tenant to your property.

Add your perspective

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

Add your perspective

How can you develop and implement a tenant screening process?

1

2

3

4

5

6

1 Set your criteria

2 Advertise your property

3 Collect and review applications

4 Conduct interviews and inspections

5 Make a decision and sign a lease

6 Here’s what else to consider

Commercial Leasing

Rate this article

Thanks for your feedback

More articles on Commercial Leasing

More relevant reading

How can you develop and implement a tenant screening process?

1

2

3

4

5

6

1 Set your criteria

2 Advertise your property

3 Collect and review applications

4 Conduct interviews and inspections

5 Make a decision and sign a lease

6 Here’s what else to consider

Commercial Leasing

Rate this article

Thanks for your feedback

Explore Other Skills