It’s every landlord’s goal to have tenants who pay rent on time and take care of the rental property. But to find these tenants, a proper tenant screening process is necessary. That’s where a tenant screening guide comes in handy.
Here is our step-by-step guide to help you find quality tenants for your rental property:
1. Identify what you’re looking for in a tenant.
Before you even start looking for tenants, it’s important that you know what your goal is. You’re much more likely to recognize the right fit if you know ahead of time what kind of tenant you’re looking for.
The criteria needs to be fair. You have to abide by Fair Housing Laws. According to the Fair Housing Act, you are within law to dismiss a tenant’s rental application based on their lifestyle, criminal history, rental history, or income.
Below are important criteria you should keep in mind:
- A clean criminal record
- A history of paying rent on time
- Makes sufficient income to afford rent
- Fits your lifestyle requirements
- Has stable employment or the cosigner has sufficient income
2. Include your requirements in your rental listing.
Your rental listing should contain a sentence that sets up expectations for interested tenants. It should be brief. This will not only be time-saving but it’ll also help you avoid troublesome tenants.
It’s an effective pre-screening technique. The phrase, for instance, could be something like, “all prospective tenants are required to consent to a check on their background and credit history when submitting their rental application.” You can also mention the application fee they’re required to pay.
3. Ask questions during the phone call
You should have a set of questions to ask prospective tenants when they call to view your rental property. This can prove to be a huge timesaver and help you to immediately filter good tenants from the bad ones.
It’s important to ask the same type of questions to all tenants who call. This way, you won’t be accused of discrimination.
Here are the kind of questions to ask prospective tenants:
- Why are you moving?
This question is very important. Listen closely. Done right, it can tell you a lot about the tenant. Look for legitimate reasons for moving. For example, wanting more room or changing jobs.
Also, beware of red flags. For instance, suing a former landlord or being evicted.
- Have you ever been evicted?
This is still worth asking even though many prospective tenants are likely to lie. Asking this question will give them a chance to explain the circumstances. Good people can fall on hard times and their eviction may not be a measure of who they are financially.
- Will you agree to a credit and background check?
This will help separate good tenants from bad ones. As such, you should include it as part of your requirements. It’s important that their consent be written down. Verbal consent isn’t legally binding.
- Can you provide references from your former landlord and employer?
Hesitation or excuses by the prospective tenant to provide references are red flags. References from their former landlord will help you learn important details about them. References from an employer will help you verify whether or not the prospective tenant is financially stable.
- How many people will be living in the apartment?
There should be a maximum of two people per bedroom. Be sure to check with your municipality and fire department. Some dictate the number of people who can stay in a rental property.
The fewer people living in your property, the better. Overcrowding cannot only cause rapid wear and tear on your property, but can also be a health and safety hazard.
- Do you have any pets?
It’s best to know right away whether or not your prospective tenant adheres to your pet policy. It helps save time.
- Do you have any questions?
The tenant also has to be satisfied to want to live in your property. He or she may have questions about the screening process, location, or anything else that comes to mind.
4. Find out more about the tenant during the property showing.
A rental property showing gives you a chance to meet the tenant in person. If the showing goes well, then ask the tenant to complete the rental application.
5. Require a rental application.
You can collect important details about the tenant via a rental application. They’re also official documents that show the tenant’s formal application to live in your rental property. Below are some important details that you should collect from the tenant:
- Employment dates, employment history, salary, and position
- A minimum of 5 years of residence history with landlord contact information
- Ask whether the tenant has ever:
- Declared bankruptcy?
- Refused to pay rent?
- Been evicted?
- Committed a felony?
You could also ask whether the tenant smokes.
6. Reach out to tenant’s employer
Ask for important details such as how responsible the tenant is as an employee, the tenant’s position, salary, and the length of time the tenant has been at the company.
After getting feedback from the tenant’s employer, ask yourself: was the tenant truthful about their salary? Can they comfortably afford the price of rent? As a guideline, the tenant should make at least 3 times the total monthly rent.
7. Reach out to former landlords
To find out about the tenant’s behavior, you need to contact previous landlords. Find out if the tenant:
- Left the unit clean and in good order
- Reasonably took care of the rental property
- Paid rent on time
- Was a nuisance
- Helps reduce tenant turnover. A background check helps attract high quality tenants. The process conveys to prospective tenants that you have a thorough process for screening tenants. It’s a huge money and time saver.
- Aids in verifying application claims. You can verify whether a tenant’s application claims were true or false.
- It helps discourage tenants who are trying to hide something. Tenants with something to hide are unlikely to apply.
- Helps protect you from liability. A background check helps you find out as much information from the tenant as possible. As such, you can reject the application if you have any concerns. In doing this however, it’s important to adhere to the Fair Housing Act..
- Helps keep everyone safe. You need to make sure that your tenant is responsible and isn’t prone to violence.
- Sexual orientation
- Veteran status
- Marital status
- Familial status
- National origin
- Gender identity
- Political ideology
Run a background check and analyze the tenant’s credit report.
There are many benefits to run tenant background checks.
Here are some of the benefits:
The tenant credit report is also important. It allows you to get insights of the tenant’s financial history. Although you are still free to use your judgement, a credit score of 680 or higher is a good credit score.
8. Accept or reject tenants
Finally, it’s time to either accept or reject tenants based on the steps aforementioned. Before rejecting an applicant, make sure you’ve adhered to the Fair Housing Act. As per these rules, you cannot reject a tenant based on:
Tenant screening doesn’t have to be stressful. Hopefully by using this guide you’ll have an easier time screening your next tenants.
If you’d like help with your tenant screening process don’t hesitate to
reach out to us.