Whether you’re a seasoned landlord or just starting out, tenant screening is a crucial step to protect your investment. While checking credit scores is standard, there are many other factors to consider. This guide will walk you through the essentials, from credit history to rental references and beyond.
What Makes a Great Tenant?
Landlords often look for specific traits when evaluating potential tenants. While good credit, a clean rental history, and a stable income are key, here are other qualities to prioritize:
- Positive Attitude: Polite and respectful tenants are more likely to care for your property. Observe their body language and tone during interactions.
- Stable Employment: Consistent job history and steady income indicate reliability. For student renters, part-time jobs alongside studies can also reflect responsibility.
- Sense of Responsibility: Ask questions about their current living habits, such as paying bills on time or maintaining cleanliness, to gauge their reliability.
- Reliable References: Previous landlords, employers, or even personal references can provide insights into a tenant’s character.
- Property Fit: Ensure the tenant’s lifestyle and income align with your property type—luxury apartments may need higher incomes, while budget-friendly units may allow more leniency.
- Clean Background: Running a background check for criminal history is essential to spot any red flags.
Following Fair Housing Laws
The Fair Housing Act prohibits discrimination based on race, color, national origin, religion, sex, familial status, or disability. Ensure your screening process complies with these regulations, including reasonable accommodations for tenants with disabilities. Check state-specific laws for additional tenant protections, such as Section 8 housing rules.
Setting Clear Screening Criteria
Define your minimum requirements upfront when tenant screening to save time and attract qualified applicants. Here’s what to consider:
- Credit Score: Decide on a minimum acceptable score (e.g., 600).
- Income: Most landlords require three times the monthly rent as income.
- Rental History: Two to three years of rental history is common.
- Employment History: Steady employment for at least two years is a good benchmark.
- Pets: Decide if pets are allowed and specify restrictions.
- Smoking: Outline your smoking policy.
- Lease Term: Determine your minimum lease length, such as six months or a year.
Prescreening Tenants Through Marketing
Optimize your rental property listing to attract the right tenants. Social media platforms like Facebook allow targeted ads based on location, education, or workplace, helping you connect with potential renters who match your criteria.
Building a Streamlined Screening Process
Create a checklist to assess tenant qualifications efficiently. Besides credit checks, consider:
- Social Media: Public profiles can offer insights into a tenant’s behavior (avoid invading privacy).
- Court Records: Check for evictions or criminal cases.
- Online Searches: Google their name to uncover additional information.
Spotting Red Flags
Be cautious of tenants who:
- Ask only about move-in costs without other property-related questions.
- Ignore the details listed in your ad.
- Display unprofessional behavior or poor communication.
- Miss deadlines for applications or deposits.
Verifying Rental History and Income
Contact previous landlords to learn about the tenant’s rental history. Ask questions like:
- Did they pay rent on time?
- Did they maintain the property?
- Would you rent to them again?
Verify income with pay stubs, tax returns, or bank statements. For non-traditional workers, such as freelancers, bank statements can confirm financial stability.
Final Thoughts
Tenant screening takes effort but is essential to safeguard your property and avoid future issues. If it feels overwhelming, consider hiring a property management company to handle the process professionally, ensuring your rentals are in good hands.