Tenant Screening Process

Screening renters is a process that needs to be undertaken with thorough care.  It’s much more than just accepting who responds to your listings first. A bad tenant can make a good property investment go sour really fast. A great tenant will, ideally, not demand as much negative attention so you can focus on other things. There are a few basic steps to follow to better ensure you will get the right tenant.

The Ad Listing (And What to Put In It)

In order to avoid any potential conflict through the screening process, it is important that you are up front with what exactly you are looking for in the ad. Mention any tenant requirements you may have. This could be: no pets, no smoking, max occupancy, etc. Including rent and fees is also advisable. This will do a couple things. It will likely deter people who do not fit your requirements, saving you time from doing a walkthrough for someone who will inevitably not make the cut.

Having this in writing can also provide protection in the event that a rejected tenant claims you have breached the Fair Housing Act, which states that it is unlawful to reject a tenant based off of race, religion, gender, sexuality, nationality, etc. Adhering your screening to your list of expectations, if a prospective tenant does not show that they will be able to follow through with what you’re asking then it is completely lawful to reject them as a potential candidate. Being able to point them back to your original ad will hopefully reduce or negate conflict.

Background Check and Rental History

Analyzing a tenant’s background can be tricky. If a promising candidate comes along and you discover they have a criminal record, this can be off-putting.  As a landlord, you have every right to turn down an applicant because of their criminal history, but if the tenant seems to be a good fit in all other respects, you may want to take the nature of the crimes into consideration when determining whether renting to him or her is worth the risk.

On your application, include a spot for contact information of previous landlords if applicable. Checking with these sources is immensely valuable. It is illegal for landlords to slander former tenants, but talking with former landlords can help address any concerns you may have with a potential renter. If the applicant has a poor history with past rentals, it could be unwise to continue with them.

Employment and Credit History

Knowing if the tenant will be able to afford rent is crucial to determining if they will help move your investment forward. This can also be tricky though. While someone’s credit score can give you a partial idea of their fiscal responsibility, it can be misleading when looked at by itself. A low credit score can be attributed to many things: perhaps trying to buy a house just out of their price range or bad things like credit card debt.

It is best to look at their credit history with a context of their employment situation. If he or she has been working at their current job for more than six months and is making enough money to easily pay their rent and utilities, there may not be an issue. You can inquire about the details of their poor credit report if it seems overly concerning.

Deciding

In an ideal situation, you will have multiple candidates to choose from. The more options you have, the better your chances of finding the right match. Remember that you do not have to settle. If you have several people interested, but none of them meet your requirements, , don’t feel pressured to accept them for the sake of convenience. It’s better to spend more time listing your property and screening more applicants than to devote time to someone who potentially will devalue your property or cause unneeded stress with paying rent or other issues.

Hold out for someone who you think will be responsible. Someone whose history proves that they are equipped to handle paying rent each month, has a clean criminal record, and who comes with great references. As mentioned in the beginning of the article, a good tenant makes a good investment.

About the Author

Dusty Henry is an Editor at All Property Management, a company that matches rental property owners with property management companies in their areas. Search their extensive database at www.allpropertymanagement.com, and then get free quotes from property management companies near you.

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