We’ve all heard stories about tenant-landlord disputes. It is therefore important for landlords to conduct a proper screening process on prospective tenants. When done properly, an effective screening will help avoid problematic tenants at an early stage.
In this guide, you will learn how to weed out poor tenants, leaving you with responsible, long-term renters.
Without ado, here’s how to screen tenants for your rental property.
1. Request the prospective tenant to fill out a rental application form
Begin the process by requesting that each prospective tenant fills out an application form. There’re many sources to get application forms.
One way is to use one of the application forms available online through On-Site or Tenant-Data. Another way is by creating your own personalized rental application form using Microsoft Office Template. See a sample here.
If you decide to create your own, make sure to include everything you need to know about the tenant. For example, it should include:
- Criminal check
- Criminal history report
- Tenant’s rental history
- Income
That notwithstanding, certain states prohibit landlords from discriminating against renters with certain criminal convictions. Since there’s no nationwide database of criminal records, it is best to hire a reputable tenant screening company.
2. Follow the Federal Fair Housing Act
A landlord’s desire to find the right tenant doesn’t exempt them from adhering to the Fair Housing Act. You should follow these rules to avoid being accused of discrimination. You must not discriminate a prospective renter based on:
- Religion
- National origin
- Sex
- Disability
- Familial Status
In addition, you should also comply with those of your own state.
3. Run a Credit Check
Most states allow landlords to charge a tenant the cost of running a credit check. Even if your state doesn’t, it’s still a good idea to pull a tenant’s credit. You can use the Equifax Identity Report for this purpose.
You should consider checking the current debt and credit history when reviewing the credit report. The current debt shows if the tenant has unpaid balances, carried hefty loans, or maxed out all credit cards.
The credit history looks for a history of bankruptcy, collection accounts, and late payments.
4. Perform a background check
This check helps a landlord see if there’re pre-existing problems lurking beneath the surface. With a background check, you can peep into your prospective tenant’s rental history. The results may reveal important things such as a history of prior convictions, damaging property, or skipping rent.
Typically, you only need their social security number to run the background check. Companies that provide such services include Screening-Works and Star-Point. When using any of these companies, make sure to request a background check on their:
- Public Records
- Criminal Records
- Evictions
5. Ask for details of past landlords
This will help you verify if the tenant had any issues with past landlords. Dig a little deeper to get a real sense of the tenant. Often, the only things that a present landlord asks from a former landlord is whether the tenant paid all rent and if they were aware that they were moving.
Some basic questions to ask without invading anyone’s privacy include:
- Would you rent out a property to this tenant again in the future?
- Has the tenant caused damages to the property?
- Did the tenant have payment issues?
- Did neighbors ever complain of disruption from the tenant?
- How did they keep their apartment? Were they clean?
- What reason did they give for moving?
6. Contact the Employer
Before allowing the tenant to sign a lease, verification of income is key. You can do this by asking the interested renter to give you a recent copy of their paystub. You can also make direct contact with the employer to learn more.
While some employers won’t give out salary details, they’ll tell you whether or not the tenant is an employee.
7. Choose a consistent tenant
You should scrutinize tenant’s prior addresses and employment history available on their application form.
Do they switch jobs or move locations often?
If their employment seems inconsistent, that might be a warning sign for you. If they move often, the pattern may likely continue even in the future.
8. Make a decision
Review the entire application process and make a choice. If you haven’t found any red flags, it’s time to sign a lease or rental agreement. It goes without saying that you should have a quality residential lease.
You’d be surprised at how many people would just sign it without even reading its contents.
Conclusion
Tenant screening is one of the most important components of the rental process. Therefore, it shouldn’t be ignored or rushed. There’s nothing worse than getting a problematic tenant. You can save tons of money and hassle by doing the necessary legwork mentioned in our guide.
With the help of an experienced property management company, you can increase your chances of picking top-notch tenants as well as decrease your workload.
We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.
