Most landlords and property owners I have spoken to always seem to have some tenants who are causing them sleepless nights. Whether this is due to difficulties in paying rent or engaging in activities that cause disturbance. The truth is that all this could have been prevented if proper screening had been done. Tenant screening refers to the process used by landlords and property managers to evaluate potential tenants on their suitability to pay rent and keep house rules.
Here in Kenya, it is uncommon for landlords to do any screening. And this has caused property owners a lot of disputes. In this guide, we will be delving into the basics of tenant screening, how it helps you as a landlord, when it makes sense to do it and how to actually do it.
How does tenant screening help
You must first understand that the relationship between a landlord and a tenant is just like any other relationship. Before you choose someone to marry or a friend, there are some thing you check before committing. This is how tenant screening works; your aim is to see if you are a good fit for each other before signing the tenancy agreement. So how does this help you as a landlord?
1. Reduces the risk of arrears
One thing landlords and property managers hate is rent arrears. What some tenants don’t understand is that rent is the landlord’s business and delaying on it puts them at financial strain. Some of these units are also built with loans so delayed rent becomes a huge problem for the owners. Screening tenants helps reduce this risk as you gauge the renters ability to pay.
Turnover is rate at which tenants vacate your units. If you have 20 rental units, and 10 tenants choose to vacate in a year, your turnover will be (10/20) x 100 = 50%. Screening your tenants will help reduce this rate and means stable income for you as a landlord.
3. Saves you time & stress
Having vacant units or huge rental arrears can cause you sleepless nights. Moreover, having tenants that keep on moving in and out wastes your time facilitating the moving or sourcing new tenants. Screening ensures you get long staying and better paying renters which guarantees you stable income and less stress.
4. Reduces damage to your property
When tenants move in and out of your units constantly, fixtures, paint and the built-ins are normally subjected to a lot of wear and tear. You will begin noticing that things break a little too often and this can add to the maintenance costs quite fast. Vetting tenants ensures you get people who respect your property and will maintain it in good conditions.
5. Increases Profitability of Units
At the basic, tenant screening helps you in getting high quality renters for your rental units. This types of tenants pay you well and cause minimal disturbance. The result is that you begin seeing increased profitability of your units which will help you sleep better at night.
When Tenant screening makes sense
While we advocate for screening, the reality is that there are properties in which it makes more sense to do it. If you have single-rooms or bedsitters renting below KES 10,000/Mo, tenant screening might not make that much sense as renters in this category already have risks associated with their incomes. If you were to subject them to excessive screening, most would either not pass or have plenty of options to choose from. Based on our research, tenant screening makes sense in the following areas;
- Places where rent and demand is significantly high
- If you are renting out a furnished apartment
- In high value rental properties where arrears might stack up fast
- In family-oriented units with already well-paying tenants residing in them. A bad tenant could easily chase you many good tenants if not well contained.
How to do tenant screening
Tenant screening might sound complicated but it is very easy to do. However, care needs to be taken to avoid any form of vetting that is overly personal or sounds discriminatory. If you are planning to rule out tenants on the basis of tribe, race or religion, this can be termed as discrimination under chapter IV of the constitution and you can be taken to court over it.
1. Verification of Identity
The first step is to verify their identity. You can do this by asking for their name and seeing if it matches the registered one on their active phone number. After all, they will eventually give you their name while signing the tenant agreement.
2. Confirm source of income
Most Kenyans either work informally and don’t have a pay slip or are remote workers earning money online. It might be difficult also for a stranger to give you proof of their source of income. However, for employed Kenyans a copy of their pay slip may work. For those without a formal income source, you might need further clarification either from a reference or in the deposit.
You can also include the question of; “How much do you make monthly ________________” and provide a range for them to feel comfortable. For example;
| Monthly Income Range | Tick (✓) |
| Below KES 30,000 | ☐ |
| KES 30,000 – 50,000 | ☐ |
| KES 50,000 – 70,000 | ☐ |
| KES 70,000 – 90,000 | ☐ |
| Above KES 100,000 | ☐ |
If the rent is above 40% of what they make, then they pose a risk in terms of rent payment. Assuming they give a range of KES 30,000 – KES 50,000 and your rent is KES 42,000, this could be a looming risk. Instead of employment status, focus more on income consistency and how it compares to your rent as this marks their ability to pay you.
3. Speaking to a previous landlord
While many people might be reluctant to provide you with their previous landlord’s details, if you are unsure, please ask for it. I recommend this for premium rental units such as apartments in Nairobi’s upmarket areas like Westlands and the likes. Some might not have had a previous landlord, in the case of first-time renters so don’t stress much about it.
4. Have a brief conversation
The best way to know someone is taking time to know them. You can set about 15 minutes when they come for house viewing to have a conversation with them. Make sure you ask the right questions and you are not too intrusive. Questions that might help you understand them better include;
- Why are you moving ___________________?
- How many people will you be living with ___________________?
- When do you expect to move-in _______________________?
- Do you intend to keep house rules ____________________?
Gauge their honesty as well as their demeanor while answering your questions. You might pick up hints of rudeness or bad attitude. I like asking myself, “if this is how they are responding over small questions, how will they respond if they are behind on rent?” DON’T ignore red flags
5. Required Deposit & Signed agreement
The final test is to present them with the tenancy agreement, the house rules and payment terms. Remember to include all of this information in the agreement, that way upon signing, it functions as a contract that can be legally enforced if a disagreement ensues.
