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Tenant Screening: What Criteria Can You Use?

by Kevin Perk on November 6, 2012 · 21 comments

  
tenant screening criteria

My previous two articles discussed the importance of tenant screening and how to avoid a federal discrimination suit.  In this article I want to discuss some of the criteria that you can and should be using to screen your potential tenants.

As mentioned in my previous articles, you must treat all applicants equally.  Further, you cannot discriminate against the seven federally protected classes.  But you have to have some method of choosing the best tenant for your property.  You have to discriminate, or choose, in some form or fashion.  So what should a smart landlord be looking for?

Here are my Top 7 Criteria for Selecting Tenants

  • Can they prove who they say they are with proper ID, SSN#, etc?
  • Do they have a job and/or enough income so they afford the rent and utilities?
  • Do they have job stability, a good work history and good job references?
  • How is their credit?  Do they pay their bills?  Do they pay on time?  Have they ever filed for bankruptcy?
  • Can they provide good references from previous landlords?  Have they ever been evicted?
  • Do they have a criminal background?
  • How many people will be living in the property?  HUD has guidelines about how many people to allow per room, usually it is 2 people per bedroom.

The above are criteria that you should at a minimum be looking at as you screen your tenants.  You want to know if they can they pay the rent, will they pay the rent and will they cause any trouble.

Of course there are other criteria that you may want to consider as well.  Many of these are based upon experience or preference. Remember also that the tenant screening process begins at the first point of contact with the prospective tenant.

  • Were they rude or abrupt, or were they respectful and well mannered?
  • Were they clean and well put together or was their car full of trash and junk?
  • Do they have any pets?  Pets are not a protected class (assistance pets for the disabled are the exception).
  • Do they smoke?  Smokers are not a protected class, you can discriminate against them and some landlords do because of the added expense of cleaning up their properties when a smoker moves out.
  • Do they own a motorcycle?  Guess where that motorcycle may end up in the winter?  Likely in your dining room dripping oil on the floor.
  • Some landlords will not rent to lawyers.  Lawyers are not a protected class.  Lawyers are known for suing people, even their landlord.  Just tell one you will not rent to them because they are a lawyer and see what they say next.
  • No job category is a protected class.  I know of landlords who do not rent to police or preachers for example. It may seem harsh, but they do not want to try and evict a cop and would hate to evict a preacher.

The point is that almost anything except for the seven federally protected classes is pretty much fair game for you to use in screening your tenants.  And that is what is so great about real estate investing; there are thousands of ways to do it and no “right way.”  What works for you may not work for someone else.

Like I said before, at a minimum you want to ensure that the prospective tenant can afford the property, will pay on time, will not cause trouble and will not destroy the place.  Whatever standards you choose to use to determine this, write them down and apply then consistently during the application process.

I will talk more about the application process next time.

Photo: Aric McKeown

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{ 21 comments… read them below or add one }

Geoff November 6, 2012 at 6:42 am

I can’t believe you posted a picture of my car on here LOL :)
Sad but I have seen a car like this, and the person that owns the car live in (owns, not rent) a 3 bedroom house, that looks exactly the same.

Reply

Kevin Perk November 7, 2012 at 11:46 am

Geoff,

I have seen cars like that as well. Some do pull up when we do showings and the “oh hell no” thought goes through my head.

Thanks for reading and commenting,

Kevin

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Sharon Vornholt November 6, 2012 at 7:01 am

Kevin -

Don’t foget to check the free sex offender registry. You will have a real problem on your hands with that one.I started checking when I had a potential tenant volunteer the information. On my application it asked if they had ever been convicted of a felony. This man said he was a convicted sex offender and asked it that counted.

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Kevin Perk November 7, 2012 at 11:48 am

Good point Sharon,

That will usually come up on the criminal background report.

Kevin

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Melisa November 6, 2012 at 7:44 am

I am glad you posted this as I am in the process of finding a tenant for one of my empty units in my duplex. I can tell you right now I hate the process, I hate thinking about it, etc. I am trying to find a property management company to screen applicants, I am getting too many calls (which I am not complaining about) I just have not found the time to call folks back (it’s really busy for me right now). This article has help put the minimum requirements I should be looking at in to prospective. I have many other properties but I’ve never had to find a tenant (wish me luck)- I feel like a need a step by step guide, lol.

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Kevin Perk November 7, 2012 at 11:51 am

Melisa,

It can be hard with all of the rules to trip over out there.

Just remember to be fair and consistent. You want someone who can afford the rent, will pay the rent and will not cause problems or unnecessary damage. Write your criteria down to reflect those characteristics and follow them.

My next article will deal with how we put all of the material of my previous articles on screening together in the application process. Watch for it next week.

Thanks for reading and commenting,

Kevin

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Jim M. November 6, 2012 at 7:56 am

Good, informative series of artticles. Thank you.

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Kevin Perk November 7, 2012 at 11:52 am

Thank you Jim,

I appreciate the kind words.

Kevin

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Karen Rittenhouse November 6, 2012 at 3:54 pm

Point is, screen your tenants. I’m amazed by the number of landlords who don’t bother. The screening process is necessary, the most important process a landlord does and can end up saving time, money, and frustration.

I know it’s hard to turn away a live body standing in front of you with cash, but it may be the best landlording decision you can make.

Screen your prospects. We have a right to know who this person is before we hand over our keys. We are, after all, turning over to them a very expensive piece of real estate.

Thanks for your post.

Reply

Kevin Perk November 7, 2012 at 11:55 am

Thank you Karen for reading and commenting.

Screening is so important. It really does save money and headaches! That is why I have spent so much time on it here lately and I’m still not done. More coming next week.

Kevin

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Bryan Jaskolka November 7, 2012 at 4:27 am

Screen, screen, and then screen again, I agree. Too many landlords give their tenants the benefit of the doubt (especailly at first when you don’t even know them!!) only to find that they have real trouble a month into the agreement. Thanks for the post. So many say to “check, check, check” but then don’t tell you what you’re checking for. Thanks for being clear!

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Kevin Perk November 7, 2012 at 11:56 am

Bryan,

Trust but verify right? Because prospective tenants never, ever lie :)

Thanks for reading and commenting,

Kevin

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Dale Osborn November 8, 2012 at 9:43 pm

If they do not meet your minimum criteria – move on to the next applicant and screen them. It is better to leave a unit empty than to put the wrong person in there. There will be damages and court costs to evict them on top of the lost rents. Screen to the max should be the mantra of every landlord.

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Kevin Perk November 11, 2012 at 7:27 pm

Good advice Dale!

It is often better to leave the unit empty for a while. But I know it can be hard when someone has the money and is ready to move in.

Trust me, the money you make on the front end with a tenant that you do not screen well will be lost on the back end when the eventually leave. You will either have to evict them or they will trash the place. Either way you lose time and money.

Thanks for reading and commenting Dale,

Kevin

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Rob November 25, 2012 at 3:54 pm

I recently had a woman look at a house to rent. She had a job, references, etc. Everything seemed ok, except her two year old son was running all over the house with her keys and trying to shove them into every electrical outlet. I told this woman that her son was about to get zapped, but she didn’t seem to care. I rejected her because I thought this unsurpveised child would destroy my house or injure himself. I hate to think what happens at bathtime. He’s probably on his own in a tub full of water.

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Danny Pickrell May 16, 2013 at 2:52 pm

Great post. Tenant screening is one of the most important things you can do when renting out. Often the truth comes out with just a little bit of digging, and can save you a headache in the future. Thanks for sharing this.

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Kevin Perk May 16, 2013 at 11:12 pm

Danny,

You speak the truth. Screening has saved us many a headache. It is an essential part of being a landlord.

Thank you for the reading and the kind words.

Kevin

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Nichole November 5, 2013 at 7:19 am

How important are references these days? It seems like anyone can get a reference.

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Kevin Perk November 5, 2013 at 11:32 pm

Nichole,

They are important. But you need to use them carefully.

For example, if their mom is giving a reference it is probably not the most accurate one.

However, if an employer, former employer or former landlord is giving a reference, those can be great. Here is a tip however with these. Do not call the number listed on the reference. If for example the reference is a former employer, call the main number and ask to be connected to that person when checking the reference. That way you can bypass a potential “friend” sitting in on the reference and get the real story.

As with anything though, references are only part of the story. Be sure to pull credit and criminal histories and check their income and work histories as well.

Thanks for reading and commenting,

Kevin

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Breanna March 29, 2014 at 6:30 am

Thank you so much for this article! It greatly helped with my Real Estate Law class!

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Kevin Perk March 31, 2014 at 10:31 pm

Breanna,

Thank you! Hope it was not a class on how to sue a landlord. :)

Kevin

Reply

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