Tenant screening with AI: A guide for property managers

Discover what AI screening is, the types of AI tenant screening, the benefits for property managers, and tools to make AI part of your tenant screening process.
By
Alice Dodd
in
Residential Rentals
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September 20, 2024
8
min read
Tenant screening with AI: A guide for property managers

Did you know that the average payout for property damage insurance claims in the US is more than $13,000?* That’s a major setback when it comes to maximizing rental profit.

That’s why it’s crucial to know your tenant, check IDs, credit cards, and backgrounds, and prevent parties, smoking, breakages, and other risks that can come with unruly tenants.

But tenant screening can quickly get complicated and time-consuming, especially if you are operating remotely, are trying to keep costs low, or only have a small team.

That’s where artificial intelligence (AI) in tenant screening comes in. AI tools make tenant screening easier, more efficient, and more cost-effective than manual checks.

But if you’re reading this, you’re probably asking yourself if you really need AI and why, and wondering where to begin in setting it up. You might even be feeling a little confused about how to integrate it as part of your overall checking process without alienating or angering tenants. 

We’re here to help. We’ve outlined what AI screening is, the types of AI screening, the benefits, and how to make it a streamlined part of the ‘know your tenant’ process.

This way, you can protect your real estate properties and your business with the latest technology, for more peace of mind.

What is AI tenant screening? 

AI tenant screening is when a landlord or property manager uses AI-assisted tools to screen potential property tenants. 

AI can rapidly check a wide range of data and details discreetly to more accurately paint a picture of the tenant’s background, previous rental history, credit score, possible criminal backgrounds, and even social media use. This can help to predict a tenant’s reliability and behavior.

By offering a more informed view in comparison to manual checks, AI reduces the risk of problems like late payments, property damage, or disruption to neighbors.

If any discrepancies come up, AI can flag these, giving you a chance to double-check them with the potential tenant. Some issues may be benign (such as a credit card registered to their partner’s name rather than theirs), while others could be more serious (criminal behavior).

Types of AI tenant screening

Before we look at how AI tenant screening can save time and improve security in your business, let’s take a look at the most common and useful types of AI tenant screening.

Tenant verification 

Tenant verification screening tools use AI to cross-check tenant information with various online databases to verify information such as employment, income, and rental history. AI can learn the types of details to assess and perform a full database check much faster than a human. This ensures the tenant’s details are accurate and that the tenant is trustworthy. 

Application analysis

Tenant screening tools with AI designed for application analysis can learn from existing patterns to spot inconsistencies in data more accurately. For example, they can detect and flag a possible high-risk tenant by looking at rental history, credit checks, credit scores, payment patterns, or other factors that could affect a tenant’s ability to pay on time or stick to the rules of their contract.

Tenant background checks

AI-assisted tenant screening tools that focus on background checks make it easier to scan a tenant’s records to prevent criminality and reduce the risk of problems that could require forceful eviction down the line. For example, AI-powered background checks can scan criminal databases, eviction histories, and other public records without risk of human error. 

Benefits of using AI in tenant screening

If you’re still wondering if AI is worth it, you’re not alone.

“AI solutions need to be more than gimmicks,” said a strategy vice president at a top mortgage lender to income verification company Truework. “We are in a heavily regulated and compliance-driven industry [property]. We need to dot all of the i’s. Not most of them.”

Thankfully, AI is now much less of a “gimmick” and increasingly of genuine benefit to businesses. Here’s why:

Increased efficiency  

An AI-powered software tool can carry out a tenant screening process much faster than a human—especially if you’re managing multiple properties at once and need to do more checks than you have time to carry out. 

AI can cross-reference many sources of data (almost) instantly, and save hours of time in comparison to repeated manual checks. In fact, one PWC study found AI is expected to improve productivity by 40% by 2035.

Improved accuracy 

Even the fastest worker is still at risk of human error, but AI-powered software eliminates this, improving accuracy while still working quickly. In fact, the same 2024 PWC study found that AI has the potential to improve data accuracy by an incredible 80%.

And if there is any doubt, the AI system will flag any potential problems, which you can then double-check manually, so no issues go unnoticed or are wrongly identified.

Access to predictive insights

One of the major advantages of AI-powered screening is its ability to learn from existing patterns and data to make ‘intelligent’ predictions. It can look at previous details to suggest and indicate possible issues, cross-referencing multiple databases and data sources to spot potential concerns.

Cost savings

Because AI-powered tools are so efficient and accurate, they can also save you money on employing the extra staff you would need to perform the same level of tenant screening. Similarly, more accurate screening can save you significant costs in the long run, as it reduces the risk of property damage, late or missing rent payments, or costly eviction processes.

How to integrate AI into your existing screening process

Now you know what AI can do and why it’s so useful for renter screening, let’s look at how to integrate it into your existing process and make it a seamless, streamlined part of new tenant checks.  

1. Evaluate your current screening process

Take a look at your current screening process and identify any areas that are currently lacking, where you’ve had issues before, or that tend to take you and your team longer than you’d like. These areas could be the exact tasks that AI-powered tools can help improve. 

For example, you may need:

2. Choose the right AI tools

Now you know where and how you need AI, it’s time to choose the right AI screening solution for you. Several AI-powered tools specially designed for property managers exist (such as Truework, Sterling, or Autohost.ai).

Consider the tasks you need your AI-assisted software to do, and compare them against the tool's features and functionalities (e.g. ID checking, fraud detection, occupancy monitoring, etc.), ease of use, cost, and integrations with any other software tools you already use.

Pro tip: Install Minut’s privacy-safe sensor for noise, occupancy, and cigarette smoke monitoring. By sharing with prospective tenants what monitoring technology you use, you’ll help set clear expectations about the property rules and reinforce a sense of safety and security. Minut uses AI to help you reduce false positives, distinguishing between legitimate concerns and false alarms—so you can focus on genuine issues, improve safety measures, and enhance tenant trust
A view of the Minut monitoring device and noise monitoring data graph
Minut uses AI in its monitoring, and captures accurate data on tenant behavior

3. Train your team

AI-powered tools will help your team save hours of time and stress in the long run, but in the short term, there may be a learning curve as they get to grips with how to use the software. 

Many AI-powered tools will have training videos, a knowledge base, or a helpdesk that should have clear guides on how to: 

  • Use the software
  • Integrate it with your existing tools
  • Optimize it to work best for your needs

In fact, the quality and access to the software tool’s customer service or help desk should be another major consideration in your decision to sign up, so you can get your team up to speed, fast.

4. Maintain compliance 

AI-powered tools may often be more efficient than humans, but they still have to comply with existing property and privacy laws, such as:

Make sure you have the legal right to check data and will act legally on any findings (such as not discriminating against tenant applicants for their credit ratings or past criminal convictions).

Regularly reviewing this will also ensure you remain compliant and your processes are legally watertight, even if legislation changes.

5. Monitor and adjust 

As a property manager, you’re already aware of the importance of tracking metrics and business goals. The same is true for introducing AI-powered checks. Keep track of certain KPIs (key performance indicators) so you can see if your new tool is working as planned, and make data-driven, informed decisions going forward.

For example, you might track: 

  • Efficiency and accuracy
  • Time to screen applicants
  • Tenant experience using surveys 

To ensure tenants feel confident and to build trust, it's important to track how your AI tool enhances the safety and security of your property. Of course, without infringing on tenant privacy or giving them a negative experience.

Tenant screening with AI: A must-have part of your property protection toolkit

Screening tenants is absolutely crucial when it comes to running a successful rental property operation, but it can be time-consuming, costly, and inefficient to do manually.

AI tools can make tenant screening easier, cheaper, and more efficient—saving you time, money, and stress. 

Improving your screening process to verify a potential tenant’s financial status, previous rental and eviction history, background, and even criminal record significantly reduces the chances of future problems, including property damage, disruption, unpaid rent, or neighbor disturbance.

It’s important to identify your screening needs and find the right AI screening tool for you. Using AI with a platform like Minut as part of your overall screening process can help you understand, predict, and monitor tenant behavior. It can also help to prevent risks such as damage, excess noise, indoor smoking, and excess occupancy.

This way, you can prevent your property from becoming just another rental insurance statistic, and maximize revenue and profit instead.

Frequently asked questions about using AI in tenant screenings

What should you check for when screening a tenant? 

When screening a tenant for your property, AI-powered tools can help you check for important details such as ID verification, an analysis of their application to check financial records and income reports, a background check of details such as past evictions, financial checks on credit history or previous fraud, and even criminal record screening. 

What's the best AI tool for tenant screenings?

The “best” AI tool will depend on what you need it for (financial checks, ID checks, or criminal record screening). However, there are several AI-powered tools specially designed for property managers. For example, tools like Cozy can help you screen tenants with AI-driven insights into their financial stability, background, and rental history. 

Property monitoring systems like Minut also use AI technology to assess and monitor property status on details such as occupancy, indoor smoking, noise levels, climate conditions, and security. This makes sure your property is safe and in good standing before screening even begins.