Screening Tenants: A Guide for Landlords
Finding a suitable and respectable tenant is one of the hardest jobs a landlord faces. Vigilance in searching for a potential tenant will lead to finding one who is trustworthy and reliable, and won’t end up trashing your unit or leaving and breaking the lease contract. There are too many landlords out there who never screen applicants before approving tenants, leading to many issues and headaches later. Thankfully, there are many ways for a landlord to screen tenants, and with new and emerging technology, landlords can now check backgrounds and run credit checks much quicker and easier than in the past. Remember, there is no excuse not to screen your potential tenants with so many quick and easy ways to do so.
- Create a paper application process (if you don’t already have one). Make sure to include all pertinent information that you will need from the tenant, including: full name, date of birth, Social Security Number, their current address, background information, employment data, rental history (this is important so you can contact previous landlords to see how the tenants have done in the past), income and also personal references. If you don’t have an application form, you can create your own simple version, or you can get a free one from the local real estate association. Once the tenant has filled out the application, here are a few things to look for:
- Income. You need to make sure that the potential tenant’s income will be sufficient to cover the amount of rent they would be paying. Keep in mind they have other bills to pay as well.
- Current (and previous) employers. Check out how long they have been with their current employer. Have they had multiple jobs? Do they have long gaps in between jobs?
- Lifestyle clues. Take a look to see if the potential tenant has any pets, or other information that might be pertinent to whether or not they would make a good tenant.
- Financial data. In order to do a thorough background check, you will need to ask the tenant for their financial information on the application. A full financial picture of the potential tenant is key to finding a reliable tenant.
- Any personal references. Be sure to check up on any personal references that the tenant gives on the application. References should include the references’ names, phone numbers and how long they’ve known the tenant. Don’t just look it over, make sure to call at least one or two to verify they know the tenant and perhaps ask a few questions, such as how long they’ve known the tenant, their relationship with them and how they know them (Church? Work? Family?).
- Do an online search for the potential tenant. Searching online (using Google or Bing, or another popular search engine) will tell you a lot about a person; make sure to see if the tenant has any social media profiles, a website, or a blog. Decide by looking at everything online whether the tenant would be right for your property. If they don’t happen to have anything online to look at, then just skip this step.
- Run a comprehensive background check on the tenant. A comprehensive background check will reveal the tenant’s history and give a detailed report on any evictions, criminal activity and charges, and public records as well. You can order a background check through several different companies. Online reports are also available. If you’re watching your budget (most companies charge a fee for this service), you can do your own background check by contacting the local courts or police department, however this might be a very time consuming process. As a side note, some states don’t allow landlords to reject a potential tenant based solely on if they have a criminal history (you will have to check with your state to see if this is enforced in your state).
- Run a credit check. There are three major companies that you can run a credit check through: Equifax, Experian, and TransUnion. A credit check will let you see a tenant’s credit history for the last 7-10 years, and will give you an idea of the tenant’s credit activity (such as if they’ve ever declared bankruptcy, have any late payments, charged-off credit cards, etc.). To simplify this background screening process and to get comprehensive information on the tenant, you can use a service like Houserie.com to get not only a credit check, but also a comprehensive national criminal and an eviction check for a low fee.
- Reach out to previous landlords. Once the tenant has “passed” the first four steps, now it’s time to contact the tenant’s past landlords. Questions to ask include: Did the tenant always pay their rent on time? Did they ever damage the property? Did they get along with their neighbors? Was the property clean and undamaged when they left? All of these questions will give you a clearer picture of the tenant and how they will behave if you allow them to rent your property.
- Contact the employer. Once you have talked to the tenant’s past landlords, have a short phone conversation with the tenant’s current employer. A few important questions to ask might include the reliability of the tenant, verify that they do indeed work there, the tenant’s salary (some employers or Human Resource workers won’t give out this information; in this case, make sure to get two or three past pay stubs from the tenant) and if termination is in process.
- Set up a face-to-face interview with the potential tenant. Once you have completed all of the above steps, the final step would be to set up an interview with the tenant. Here are a few important questions to ask the prospective tenant:
- Do you have any pets? How many do you have, and are they housebroken? (If you don’t allow pets, make sure the tenant knows this upfront.)
- Do you smoke? If so, do you smoke outside or indoors?
- Do you have people who stay the night frequently (family and friends)?
- Do you have any children? If so, how many and what are their ages? Remember you cannot reject a tenant based on familial status, i.e. whether they have children and if so, how many children they have.
Now that you have completed all of these steps for screening your potential tenant, go over the lease contract with the tenant in detail. Then when both parties agree have the tenant sign the lease and move in! This whole process might seem like a lot of work but in the end finding the right tenant will save you time, money and a lot of stress.