Tenant screening is the process of
estimating potential renters for available apartment units. In general,
the purpose of tenant screening is not to determine the eligibility of a
tenant for a certain program, but to determine if the person is likely
to be a good tenant. Widespread use of tenant screening services by
property managers is a relatively recent practice. Tenant screening
agencies or private agencies that sell information about prospective
tenants to property managers first began operating in the U.S. in the
1970s. There are many housing authorities and owners of multifamily
subsidized housing that have written policies which include procedures
related to tenant screening.
Nowadays, many landlord and property
managers perform a credit check on applicants looking for accommodation.
Furthermore, the property managers are highly reliable on public
records, rental references and employment verification for verifying the
tenant’s identity. Today, tenant screening is a common practice and
companies offering such services can be found across the world. The
practice of screening potential tenants is designed to help rental
property owners lessen the risks and liabilities associated with
prospective clients.
Key driver of the global tenant screening services market
is the rapidly growing rental housing market. Due to the Great
Recession, rate of unemployment has been high and income has declined,
constraining household budgets and making people shift toward living in
rental houses. Young adults are the potential age group to rent a house
due to changes in studies, jobs, etc. Renting has significantly
flourished in regions, especially in central cities, where land prices
are high and low-income households are concentrated. Apart from this,
technological progress has also been a key driver of the global tenant
screening services market. Tenant screening service companies are now
able to collect information from public record databases and the major
credit reporting agencies, store it in their own databases, and then
distribute it to their clients quickly via fax or the Internet. In
addition to local tenant screening companies, there is a growing trend
toward large, national screening agencies that offer online services.
Such agencies work exclusively through the Internet, are owned by large
corporations, and usually do not have a local presence. Increase in
local renting licensing is also boosting the growth of the tenant
screening services market. However, a key restraint of the tenant
screening services market is security concern faced during verification
of the tenant. Small and medium sized agencies can find huge
opportunities for offering tenant screening services across central
cities.
The global tenant screening services
market can be segmented on the basis of type, services, agency type, and
region. Based on type, the tenant screening services market can be
divided into online and offline. By services, the tenant screening
services market can be categorized into instant credit check, tenant
suitability check, full referencing, full income verification, landlord
referencing, and right-to-rent checks. Based on agency type, the tenant
screening services market can be classified into large agencies and
small and medium agencies. In terms of region, the global tenant
screening services market can be segmented into North America, Europe,
Asia Pacific, Middle East & Africa (MEA), and South America. North
America and Asia Pacific are likely to account for prominent market
shares due to the presence of developed countries, such as, the U.S.,
China, India, Canada, and Japan in these regions. Europe is an emerging
market for tenant screening services due to the penetration of
technological solutions and high growth of population in the region.
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