As a landlord, it should be one of your primary responsibilities to search for the best tenants. You may even leverage a credit checking service to check your creditworthiness. However, renting to foreign nationals isn’t always as easy, as when dealing with an international student or a foreign tenant. A better tenant screening process makes it easier to eliminate poor-quality tenants and increases profitability.
Immigrant Tenants Are Imminent
You might not have come across a foreign tenant yet, but did you know that immigrants account for approximately 14% of the US population? What’s more, by 2026, immigrants are expected to account for 74% of the population growth.
Each year, about 2 million immigrants enter the US, and at least 75% of these people search for rental units to live in. Also, landlords can’t ignore the fact that 45% of these foreign nationals arrive in the US seeking a college education and then permanently move to the US for jobs. A majority of these people have high salaries and present great overseas credit histories.
Speaking of which…
Foreign Renters Don’t Necessarily Mean Bad Credit
A majority of highly educated immigrants typically have a decent income and have super-prime or prime credit scores. However, since they don’t carry forward a credit score from their home country, they commonly have brief credit profiles within the US. As a result, most of them are locked out of the rental market.
On the flip side, landlords also find it very challenging to rent to immigrants even if they are ideal renters. They are forced to undergo a manual and tedious process to put together their tenants’ disparate documents to better understand their creditworthiness. They do so with the help of bank statements, income statements, utility bills, and alternative data, which may even be in a foreign currency or language.
Also Read: How to pass a rental credit check
An Agency That Provides International Credit Reports
If you want to find a way to simplify this process, we recommend Nova Credit. This agency can be described as a credit bureau for immigrants that provides international credit reports to landlords who are keen on providing a rental unit to landlords.
Nova Credit does this by pulling data from a number of international credit bureaus such as Circulo de Credito, CRIF, Equifax, TransUnion, and Experian. Their services are completely free of cost from landlords and property managers and help simplify the real-time screening of foreign renters.
Each applicant’s data is processed and summarized in a format that is similar to the US credit report. Each analysis complies with and is standardized for US laws and regulations.
How Does An International Credit Report Help?
An international credit report includes:
● Credit score equivalent to US standards
● Risk attributes
● Repayment and tradeline history
● Aggregate statistics
● Derogatory market
● Other data such as employment history, inquiries, and bureau notices
By accessing this information, landlords will find it easier to identify the best foreign-born renters. This helps to:
By shortlisting the best applicants, landlords can maximize their monthly income and, in turn, their net operating income.
By decreasing the overall time and resources spent manually screening foreign-born tenants, landlords can reduce their costs.
Landlords will also be able to distinguish between the best and risky tenants to make sure they have long-term leases in their portfolios. In turn, this would mean a lot less bad debt in their accounts.
Having access to the international credit report can also benefit immigrant renters. They will be able to remove unnecessary approval conditions, which typically involve paying higher deposits, involving a co-signer or guarantor, or worse, getting rejected because of a no credit history in the US.
By harnessing reliable agency data, new technologies, and international credit reports, both international renters and property managers can save a lot of time and money. It’s a win-win for both sides of the leasing contract.
What You Need To Know As A Landlord Before Renting to Foreign Nationals
As property owners or property managers, you need to know the following methods to get an International applicant’s financial history.
Request Proof of Immigration Status Before Renting to Foreign Nationals
There are laws that forbid landowners or Property management in Oklahoma City from discriminating against tenants on the basis of gender, race, religion, disability, familial status, or national origin. It is legal to ask rental applicants to provide documentation regarding their immigration status.
Here is another matter too. The immigration status is essential because if your documentation only permits you to stay in the country for 7-8 months, you won’t be able to fulfill the terms of a 12-month lease. That could be an issue for denying your application.
Utilize The Individual Taxpayer Identification Number
Anyone who migrates to the U.S. must have an ITIN number. It is simple to track the consumer report of the tenant’s rental history with ITIN. The Internal Revenue Service (IRS) registers foreigners to collect taxes. However, it is advised for landlords to include the ITIN number on the international tenant application form so that you can keep track of their applicant.
Request Bank Statements of your Applicant
Be careful in every step you take before renting to international nationals. If your tenant doesn’t have an ITIN number yet, you can request bank statements for the last 12 months. The statement will give you useful information to check if the tenant regularly pays their bills or not. Not only that, but the statement will also give you an idea of an approximate income versus expense ratio.
Request Proof of Income
If your international rental applicant is serious about renting out a residence, they will be willing to provide proof of income. Make sure the potential tenant is financially stable. Once you receive confirmation of the income report, contact the applicant’s employer to verify it. Sometimes an employer would be willing to sign a lease agreement for his international employee, especially when an applicant is migrating because of a job opportunity.
Screening an international rental applicant or renting to foreign nationals is a dull and time-consuming process that requires attention and experience. You will need different details for different tenants. Hiring a property management company to handle these tasks for you can reduce a lot of stress and uncertainty.
Property Management OKC is dedicated to screening and verifying international applicants on your behalf. Based on the facts, we would give the best advice to either accept or decline the application. There will be privacy in all the information shared between the owner and tenant. With us, you will get the most in the screening report. Not only that but, reports include aliases and eviction records, employment and bankruptcy records, medical collections, foreclosure checks, and so on.