The (Almost) Complete Guide To Tenant Screening: Ensuring Quality Tenants For Your Rental!
Tenant screening is a crucial step in the rental process that ensures you select responsible and reliable individuals to occupy your properties.
Remember – a vacant unit is much less expensive than an eviction – choose wisely.
The Ultimate Screening Checklist will take you through the process!
In this comprehensive post, I’ll walk you through the tenant screening process and procedures, including how to leverage free court websites.
I’ll cover the prequalification process, and how to save time and verify information before showing the property.
Already have questions? Drop them here!
What Is Tenant Screening?
Tenant screening is the process of evaluating prospective tenants to determine their suitability and reliability as renters. The goal is to minimize risks such as late payments, no payments, property damage, lease violations, and ultimately evictions. The positive side is that most applicants will self-eliminate almost immediately. Download the Ultimate Screening Checklist to avoid most pitfalls! See the stories below!
Make It Easier For Yourself – Take Careful Notes and Verify As Much As You Can Prior To Showing Your Property
There’s no reason to waste anyone’s time in showing properties to those that are not qualified to rent it. Although many landlords use rental platforms to accept applications as the first step – and they likely charge the tenants for that – I prefer to do this in a more manual way. Unless you’re dealing with dozens or hundreds of units, you can easily start the tenant screening process with the initial call, email or text from anyone who contacts you about your rental listing.
My strong advice: do NOT show your properties until you’ve pre-qualified the tenant first. If there are any concerns about their ability to pay rent, to pass a criminal background check, to prove verifiable income and a verifiable rental history, and/or to pay the security deposit in full, then stop right there.
Be sure you have listed *all* the requirements you want/need for your property in your listing. It’s true that most tenants won’t read the whole listing; it’s much easier for them to contact you when they first see the photos, and ask questions at that point. Time is valuable however, and I’ve learned to redirect the applicant back to the listing if they have clearly not read it. You’ll hear questions like, “How many bedrooms?”, “What’s the rent?”, “What credit score do I need?”, “How much is the security deposit?”, “Do you accept pets?”, and the always popular, “What do I need to move in?”. Simply direct them back to the listing, and have them call back if they meet the requirements.
Again – your time is valuable when doing tenant screening. Tenants need to do their own diligence, and to be sure they meet all the requirements before contacting you. That’s exactly the first line in my listings – “Please read and meet *all* requirements before contacting”. And as you probably guessed, they don’t read that, either 🙂
Step 1 – Take Notes!
Whether a prospective tenant calls, emails, or texts, take notes about what they tell you. Sometimes what they ultimately put on an application may be very different than what they first said. Lack of consistency is a red flag. Important tip – if anyone is rude, aggressive or uncooperative on the initial contact, simply hang up or stop responding. That behavior will only get far worse if they rent your property.
- Ask where they are living now. Once I know the county they’re in, I look up that county’s court web site and search for their name. I’m not concerned with traffic violations, but the listing and rental application/process clearly states no criminal background, no judgments (medical is excepted) and no evictions. Anything I find, so will a condo board and management company, and they will not approve any drug convictions, evictions, violence, felonies, etc. I have the same policy for single family rentals as well.
I always ask during the first contact, “Do you have a criminal history, because we check.” And occasionally, I will hear “no”, even as I’m looking at their history on the county court web site and can see there are issues. NEXT! - Ask why they’re moving. The usual reasons are needing a larger space, the owner is selling the property, they want a shorter commute, the rent is going up, etc. A red flag is when a tenant tells me they have a terrible landlord that never fixes anything. Although it may be true, having an antagonistic relationship with a soon-to-be prior landlord does not bode well. I let applicants know that I always contact previous landlords to verify information about their rental history. Often, a homeowner who is selling their property hasn’t rented in years, or possibly ever. That’s ok, as long as I am able to verify their property ownership through the tax records, something I’ll go into in the next post about processing applications.
Also keep in mind, when a tenant says they’ve been renting from a relative, it will be difficult to ascertain if they’ve ever paid rent or what their history actually is. Be careful considering an applicant without a rental history; yes, we all had to start somewhere, but if you’re an inexperienced landlord, you need to be extra careful. You can ask for a much larger security deposit (in some states), or have a co-signer, but if the rental market is strong in your area, I highly recommend going with an applicant who has a verifiable rental history. -
Ask if they’re employed, for how long, and what the combined monthly income is. It’s surprising how many people will say they don’t know, or that they don’t have a job in the area yet and plan to get one when they rent the property, or there will be multiple adults all contributing to the rent but none have verifiable employment, etc. Some landlords require three times the rental amount as monthly income. I don’t, but I do require that employment is verifiable. Self-employment is fine, as long as tax returns can substantiate the income.
One popular guideline is the 30% rent rule, which says to spend no more than 30% of your gross income on rent. So if you earn $3,200 per month before taxes, you could spend about $960 per month on rent. It’s ok to be somewhat flexible with that, but if a tenant has to pay all utilities and possibly landscaping (for a rental house), they will still need to pay for food, renter’s/car insurance, gas, cell phone, health insurance, and all the other things that go with everyday life. Even if they tell you they live frugally, you don’t want to rent to someone who is one flat tire away from financial disaster.
This important point cannot be understated! A full security deposit is a must. Listen to the paw! -
Do they have the full security deposit? Do NOT be flexible on this one. Any tenant that is moving, knows that this will be required. If they don’t have it, or ask to make payments on it, you already know they’re not on strong financial footing. My policy is that it’s payable in full upon lease signing, and if they don’t/won’t have it at that time, they never will. No payment plans. Real estate is a huge investment on the part of a property owner, and almost certainly you’ve had to put a down payment on your property. I’ve had people tell me they’re waiting for their tax return to have it. Yes, multiple people have said this. Again, a huge red flag about financial instability. Pass!
- I don’t charge a fee for the application, only the background check if their application is accepted. Many landlords and rental companies charge for their applications. They do this partly to make additional income, and partly to filter out the unqualified. I don’t charge for my app, because I pre-qualify before even showing the property, and 99% of tenants do not make it past that step. I rarely have to process more than two applications for a rental property, and I only do one at a time. If the first one is processed successfully, then they pay for their background check, which is done through American Tenant Screen. They pay on that site, not to me, and we both get a copy of the report. If that comes back clean, we’re good to go.
Check Facebook as well. You’d be surprised how many people are living very differently than what they’re telling you, as far as employment and their current living situation. - Pets: I ask how many pets would be living in the home, and what kind. I’m not talking about service or ESA animals, I’m talking about pets. Condo associations often have breed/size restrictions, and applicants need to understand that. Yes, I put it in the listing, but as we know, it’s rarely noticed. I allow pets in my rentals, unless it’s a condo complex that doesn’t allow them. And some don’t, but I never get into any discussion about that with an applicant; I simply refer them to the condo association for further information. Should you choose to allow pets, know which kinds are on your insurance policy’s “dangerous breeds” list, and decide how you want to handle that.
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Credit Score: I do not ask for a specific credit score for my single family rentals, but condo associations often have a credit score minimum. I make sure that’s in the listing for our condo properties. If a tenant doesn’t know their score, I refer them to USA.gov for a free report.
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Income Verification: I save this part for the actual application processing, but I always ask if paystubs are available for W2 employees. For the self-employed, I request tax returns.
And Of Course, A Story! Or Five.
All my listings say, “Please read and meet these requirements before contacting.”
Some phone calls/texts over the years:
Me – Hi, do you meet all the requirements?
Tenant: Yes, my friend and I do, together.
Me – Do you both have verifiable rental histories? (a requirement)
Tenant: No, I’m 23 and have always lived at home.
Me – What about your friend?
Tenant: Well, maybe in Trinidad, where she’s from.
Me: Unfortunately, that doesn’t sound like you meet the requirements.
Me – Hi, do you meet all the requirements?
Tenant – Yes.
Me – What’s your monthly income?
Tenant – I’m not sure.
Me – That’s a requirement.
Me: Hi, do you meet all the requirements?
Tenant: A woman who has 2 restaurant jobs, no credit score and no security deposit, but said, “Yes, and you have my word that I have support from my mother and grandmother, they’ll help me out with whatever I need to move in ASAP.”
Me: Unfortunately, you don’t meet the requirements.
Tenant: Yes, I meet all the requirements
Me: Great, what is your credit score?
Tenant: Why do you need to know all this?! I don’t give no information to no condo association, you realtors is all RUDE AF!!
Tenant: Yes, I read the requirements, but your security deposit is so high, is that negotiable?
Me: No, that’s a requirement.
Tenant But in Illinois, our security deposit was only $400!
Me: Do you live in FL now?
Tenant: No, we’ll be moving soon and getting jobs there.
Me: Unfortunately, you don’t meet the requirements.
Here’s a bonus tip:
While these tenant screening stories have their humorous sides, be especially careful with anyone who tells you they are desperate to move, are living with deadly mold, have a landlord who is the spawn of the devil, may be homeless in a few days, or have a domestic violence situation to escape from. DO NOT get caught up in anyone’s drama. Be polite and professional, but do not ever be swayed by drama or desperation. Follow your process. Again, an empty rental unit is far less expensive than damage and eviction.
Be sure to check out our next post will go into more detail about processing an application.
I’m Alyse, a landlord since 2008, in both Florida and NJ. Over the years, I’ve learned from my many mistakes, and hopefully I can save you from making some of the same. Of course, you’ll be making some unique mistakes of your own, but not to worry – someone, somewhere, has had the same problem and when we share stories, we learn from each other. If you’d like one-on-one coaching or mentoring, I’m also available for that!
Share tips, successes, and pitfalls of where you list your rental properties. Drop me an email or subscribe to my newsletter, and I might feature the issue and the resolution!