How to Screen International Renters
One of the many responsibilities that come with being a property manager is properly screening potential tenants. These screenings should be thorough enough to ensure that you’re getting the highest-quality tenants. However, this process may be easier said than done, especially if your potential tenant is an international renter and you may be dealing with a lack of US-based credit history.
According to Landlordology, 2 million immigrants arrive in the United States each year, and 75% of these look to rent properties. These foreign-born applicants may not have a US Social Security number, or they may have a lack of credit history due to a recently issued Social Security number. Their overseas credit history, education, and career will be vital in your screening of these international renters. Keep reading to see how you can screen international renters.
Screening international renters
While these foreign-born applicants may not have the US credit history you typically look for, they are likely to have a credit history from their home countries. As a property manager, you can’t refuse to rent someone based on their national origin according to the Fair Housing Act, regardless of how different the screening process may be. In some states, like California, landlords are prohibited from requiring proof of legal residency or citizenship as a prerequisite to renting.
Also, failing to properly screen foreign nationals is cutting out a large population of potential tenants for your property.
Foreign credit history doesn’t carry over, but that doesn’t mean you can’t access it during your screening process.
The screening process may be more manual than you are used to. Rather than going through a second-party credit check party to determine creditworthiness, you may have to go through various documents — bank statements, bills, and income statements — that may also be in a foreign language and currency that you aren’t familiar with. Screen foreign nationals just as you would any other applicant. This means you are looking for a tenant who can:
- Afford to pay the rent. Typically, landlords look for a 1 to 3 ratio, where rent should not be more than one-third of an applicant’s income.
- Prove good rental history and credit history. Check for past evictions, missed payments, excessive property damage, and so on.
- Prove they don’t have a criminal background. To ensure the safety of your other tenants, you want to make sure you aren’t adding danger to your property.
Internal credit reports are available
Nova Credit is a cross-border credit bureau that will give you direct access to international credit profiles, which are created from data pulled from top international credit bureaus. For property managers, Nova Credit is free and will allow real-time screening of foreign-born applicants. Going through Nova Credit as part of your screening process can help you immensely when it comes to being thorough in the screening process, despite your potential tenant’s lack of credit history in the US. It essentially keeps your tenant application pool open without having you stress even more about considering a lack of credit history.
Their credit report will offer the following information:
- US equivalent credit score based on the tenant’s foreign credit history
- Aggregate risk attributes
- Tradelines and repayment history
- Derogatory marks
- Aggregate Statistics
- Additional data helpful to screening, such as employment history and inquiries
Just like you would typically screen potential tenants, Nova Credit allows you to get a credit report to give you the information you need to decide whether or not an applicant is the right fit for your property. Rather than going through the hassle of manually going through the applicant’s documents to screen them, Nova Credit can help give you the information you need for screening directly.
Whether you’re running a check through a credit service or screening documents for yourself, there are still ways you can make sure international renters are the perfect fit for your property.
For more helpful reading, check out these Uloop articles:
Getting Ready for a Successful Leasing Season: Prep yourself for success ahead of a busy leasing season, from updating rental prices to investing back into your property.
Showing Units During Coronavirus: In the age of a new pandemic, you may find yourself struggling to safely show off available units. Check out this article for tips on how to navigate showing units off to potential tenants while being COVID-compliant.
12 Signs an Applicant Will Be a Good Tenant: Gearing up to screen an applicant for your rental property? Check out this article for signs to look for when considering potential tenants.