Have you heard the story about the tenant who deliberately threw maggots down the stairs to the tenant below? Or how about the tenant who moved in 15 children into a 800 Sq Ft house? These stories are not made up for entertainment – they are true stories taken from actual BiggerPockets members and are just a tiny sample of what a real estate investor often must go through as a landlord.
However – by effectively screening prospective tenants you can reduce the chance of this happening and relieve the stress, headache, and back-aches that often accompany the landlord job. This guide will help you learn to discern a good tenant from a bad one, a responsible tenant from a irresponsible one, and a non-paying tenant from a paying one.
If you would like to skip the information about tenant screening and just start screening your tenant right now – click the following button:
This guide is the authoritative step-by-step guide teaching the process to get your property rented to great tenants with minimal headache, stress, or costs. In this guide, we will look at:
- The Ultimate Tenant Screening Infographic
- What Is Tenant Screening?
- 7 Qualities of a Great Tenant
- Setting Your Minimum Requirements
- Pre-Screening Potential Tenants
- Screening a Tenant in Person
- Protected Classes, Discrimination, and Fair Housing Laws
- The Application: Six Must-Include Sections for Proper Tenant Screening
- How to Run a Background and Credit Check
- Advanced (and Sneaky) Ideas for Tenant Screening
- Calling Previous Landlords
- Tenant Screening Through Employment Verification
- Tenant Screening Through Personal References
- Should You Allow a Co-signer?
- Denying an Applicant after Screening
The Ultimate Tenant Screening Infographic
What is Tenant Screening?
When we talk about screening tenants – what exactly are we talking about?
Screening tenants is about digging into a potential tenant’s background and discovering who they really are. An application (which we’ll discuss in this guide) can only tell you so much – and can be easily manipulated or falsified. Screening your tenant means looking into the information they provided, as well as analyzing outside information you can discover, and coming to a reasonable estimate on the kind of tenant they will be. I say “reasonable estimate” because there are no sure-fire ways to know the future quality of a tenant. As a landlord – it is our job to simply screen effectively and choose the best possible applicant for the property.
7 Qualities of a Great Tenant
As mentioned above, there are no guarantees when it comes to the future quality of a tenant. However – there are several key metrics that will help you decide what kind of tenant they will be. To make your life as stress-free as possible, it is imperative that you only rent to the best tenant possible. The following is a list of the seven traits that make up a perfect tenant:
Their Ability to Afford the Rent Payment
The first and foremost quality of a good tenant is their willingness to pay the rent. Without proper payment, you’ll be forced to evict and be faced with potentially thousands of dollars worth of legal fees, lost rent, and damages. Most landlords require that a tenant earn at least three times the monthly rent from their (documentable) job. Many tenants believe that they can afford more than they really can – so it is the job of the landlord to set the rules. Three times the monthly rent usually is sufficient.
Their Willingness to Pay on Time
While some landlords look at late rent as simply a benefit (and the late fee as a financial bonus to them) a late-paying tenant is more likely to stop paying all together. The stress involved when the rent doesn’t come in is not a pleasant experience and can be avoided by only renting to tenants who have a solid history of paying on time.
The Long-Term Outlook for Their Job Stability
While a tenant may be able to pay the rent and pay it on time right now – their ability to do so in the future is often determined by their job situation. If they are the type to switch jobs often or have long periods of unemployment – you may find long periods of missed rent.
Their Cleanliness and House Keeping Skills
No tenant stays forever – and when they leave you want the property back in good condition. As such, it is important that the tenants day-to-day living be clean and orderly. They must take good care of the property you have entrusted them with.
Their Aversion to Crime, Drugs, and Other Illegal Activities
I don’t need to expound too deeply on this. Tenants who engage in illegal activities will cause nothing but stress and expense.
The “Stress Quotient” – How Much Stress Will They Cause You?
The final quality of a great tenant is something I call their “stress quotient” or the amount of stress a tenant will cause you, the landlord. Some tenants are very high maintenance and constantly demand time and attention. Unless you are having a hard time finding quality tenants – these types will only cause more problems.
This ultimate guide is designed to help you find and sift through the information about the tenant to find one who most closely fits the above seven qualities of a perfect tenant. Obviously, no tenant is going to be 100% perfect, so deciding how close to perfection you will require is a personal choice that largely depends on your desired involvement level and the community in which your property is located in. If tenants are difficult to find – it may be financially advantageous for you to rent to a less-than-perfect tenant in order to fill vacancies. However – if you have plenty of tenants to choose from, you can be significantly more picky.
Setting Your Minimum Requirements
One of the most important steps in screening your tenants and finding the best qualified is by coming up with your list of minimum requirements for the property. This list of standards should be told to the tenant on the telephone, placed on the application, placed on your Craigslist ad, and told in person to eliminate those who simply will not qualify. The following four standards are commonly used by landlords on BiggerPockets:
Income Must Be Three Times the Monthly Rent
Tenants rarely know how much they can afford. By giving an exact minimum income requirement, you can keep out those who might believe they can afford to pay the rent but really can’t. Requiring income to be three times the monthly rent has been used by landlords for many years – as well as banks and other financial institutions that supply loans.
Tenant Must Have Good References
The references you receive from past landlords are the best indication of the way the tenant will behave for you. A bad review from a past landlord is a huge red flag for most landlords. Also – bad references from personal friends or family are also huge red flags.
No Evictions
A tenant who recently faced an eviction is unlikely to ever rent from me. I realize that many people change – but I’m not willing to take that risk.
Clean Background
I want tenants not problems. If a tenant has a background filled with criminal activity, I am very hesitant to rent to them. Again – people do change, but it is not a risk I’m willing to take.
Pre-Screening Potential Tenants
You’ve begun advertising for your property and have begun receiving calls. Contrary to popular opinion – screening doesn’t begin with a background check or an application – it begins with the initial contact. This is known as “pre-screening.”
As you can probably tell by the length of this guide – screening is not a flippant activity that you can do in a few seconds. Screening can take a considerable amount of time – and you don’t want to waste that time on every person who shows interest in your property. This is why pre-screening is so important. Think of the screening process as a funnel – like the kind you would use to pour oil into your vehicle. At each step of the process, you are able to narrow down the pool of applicants until only a small few – or just one – match. Pre-screening is the widest part of that funnel and will help to keep away those who obviously won’t qualify.
Pre-screening Through Your Advertising
Your pre-screening efforts begin with your advertisement. Whether you are using the newspaper, Craigslist, Zillow, or another service to market your property – the information in your advertisement can help to weed out time wasters. For example, by placing the location in your ad, you are able to screen out individuals who are looking for another location (don’t worry – if you don’t feel comfortable putting in your exact address, just put a general location or a nearby landmark.)
Also – putting the price in the advertisement also helps to keep those who can’t afford that price range from calling. I often see ads with no monthly rent listed – and have to wonder how many wasted calls they are receiving or how many potentially great tenants they are missing out on?
Pre-Screening Through Your First Phone Call
The initial phone call is the next logical step in screening tenants. The first thing you hear is often an indication (though, not proof) of the kind of tenant they might be. If the first words you hear after saying hello is a voice yelling into the phone
“How much do I have to have to move in?”
you can assume the tenant might not be a great fit. After all – they are more concerned with getting in anywhere than even asking to look at the property.
When a tenant calls about a property I have for rent, I like to ask them “What can I tell you about the property?”
This open ended question allows the tenant to begin talking and asking questions. The typical questions are generally,
- “How much is it?” (Even though I always include it in the advertising)
- “What’s the address?”
- “Do you accept Pets?”
- “How much is the security deposit?”
- “Will you work with me on my security deposit” (No.)
- “Can I get inside to see it?”
The kind of questions asked by the tenant are great indications of the kind of tenant they are going to be. I’m not suggesting that you judge a tenant solely on their ability to ask good questions – but it does help point me in the right direction as to the type of person they are. Are they orderly? Do they care about where they are going to live? Do they sound broke?
In the conversation, I also always include a few of my minimum requirements, as we discussed earlier. Usually, this is easily worked into the conversation such as, “Now, the property does have a minimum income requirement of $____ per month and we do a full background and criminal check to make sure we only rent to upstanding people.”
Many, many times I simply get a *click* after stating this information. If not, they usually will volunteer how much money they actually make and re-assure me that they have never done anything bad in their entire life.
This simple two-minute phone call does two great things:
- Get’s rid of 80% of the “bad apples” and prevents them from wasting my time.
- Let’s the good tenants know I am not a slumlord and only rent to good people.
In both cases – a win for me. This is what makes pre-screening so important. It allows you to save time, avoid nuisances, and project a good image. I’d also recommend leaving your minimum requirements on your voicemail as well – so when you can’t get to the phone, your tenants still get the message and your pre-screening still works.
Screening a Tenant In Person
The next step of the screening funnel is to meet with tenants and show them the property. This is also a great opportunity to screen the tenant before any paperwork is done. I always re-state my minimum requirements to the tenant in person, just in case they didn’t understand (or chose to ignore) when I told them over the phone.
At this point, many tenants will admit that they don’t quite meet the requirements but ask if I’ll work with them anyways. If I need time to think about it – I always tell them that I will have to check with the owner (or partner, or any other higher authority) and let them know. If I know they immediately won’t qualify, I let them know why but still offer the opportunity to apply. Why? I don’t ever want to be accused of being discriminatory for any of the protected classes. Let’s talk about those now.
Protected Classes
It’s okay to screen people upon some criteria but not other.
For example – discriminating against someone who won’t pay rent is acceptable, as is discriminating against someone with a violent criminal history. However, discrimination against someone in a protected class is not only morally wrong – it’s also illegal. This section will let you know what those protected classes are.
Federal Fair Housing Laws
The following was taken directing from the US Department of Housing and Urban Development’s Fair Housing Website, which states (emphasis mine):
In the Sale and Rental of Housing: No one may take any of the following actions based on race, color, national origin, religion, sex, familial status or handicap:
- Refuse to rent or sell housing
- Refuse to negotiate for housing
- Make housing unavailable
- Deny a dwelling
- Set different terms, conditions or privileges for sale or rental of a dwelling
- Provide different housing services or facilities
- Falsely deny that housing is available for inspection, sale, or rental
- For profit, persuade owners to sell or rent (blockbusting) or
- Deny anyone access to or membership in a facility or service (such as a multiple listing service) related to the sale or rental of housing.
In case you missed it, here are those classes again:
- Race
- Color
- National origin
- Religion
- Sex
- Familial status
- Handicap
While it is vitally important that you don’t discriminate against those classes, it is also important that you don’t even ask questions about those topics. This means don’t ask what their race is, how many children they have (you can ask how many people will be living there,) or if they have a husband or wife. Save yourself the legal trouble and simply do not ask. This also applies for advertising: DO NOT advertise for “no kids,” “great Hispanic neighborhood,” or “home great for families.” This is against federal law.
State and Local Fair Housing Laws
In addition to Federal Fair Housing Laws – your state may also have laws that must be followed regarding fair housing, which might include:
- marital status
- sexual orientation
- gender identity
- age
- participation in the Section 8 Program or other subsidy programs
Be sure to check with your State and local laws to ensure compliance to your fair housing standards. A simple Google search for “your state” and “fair housing” should give you the answers you need.
A Note on Age and Children Discrimination
As mentioned above, Federal Fair Housing laws prevent discrimination against family status and it is illegal to prohibit children. However – there is an exception to the law which states that certain properties that are designated as a “55+ Community.” According to HUD:
In order to qualify for the exemption, the housing community/facility must
satisfy each of the following requirements:
- At least 80 percent of the occupied units must be occupied by at least
one person 55 years of age or older per unit; - The owner or management of the housing facility/community must
publish and adhere to policies and procedures that demonstrate an
intent to provide housing for persons 55 years or older; and - The facility/community must comply with rules issued by the
Secretary for verification of occupancy through reliable surveys and
affidavits.
In other words – if 80% of the units in a community owned by you have someone older than 55 living in them, and your visible intent is to provide housing for an older age bracket, and you abide by the laws that govern this exemption – you have the ability to exclude a familial status to include only those who are 55+ in age – thus discriminating legally against those with young children.
For more information on Fair Housing laws – see How to Market Properties without Violating the Fair Housing Act and speak to a qualified attorney.
The Application: Six Must-Include Sections for Proper Tenant Screening
The application is the window into your tenant’s life. It is important that you ask the right questions – and don’t ask the wrong ones (see Fair Housing, above.) The following is a list of must-have sections to include and ask on your application:
- Name, address, phone number, driver’s license number.
- Social security number and date of birth.
- Current and past landlords with contact info.
- Employer and job details with contact info.
- Have they ever had an eviction filed upon them or broken a lease?
- Release of information signature
These questions are the most important for knowing the past history of your potential tenant. A good strategy to use is to not ask “have you” but instead “how many” or “when.” This makes it tougher for a tenant to lie. For example, by writing “have you been evicted” a tenant will more easily write “no” than if it said “how many evictions have been filed against you?”
Other Questions to Ask
The following is a list of other questions you may want to ask your tenant to find out more about them:
- Requested move in date?
- How many animals do you have and what kind?
- What may interrupt your ability to pay rent?
- Are you on Section 8?
- How much money do you have?
- How many felonies do you have?
- Do you have enough cash to pay the first month’s rent and security deposit?
- What kind of car do you drive?
- Do you have a checking account? Savings Account?
- How many people will be living here?
- Emergency contacts?
- How is your credit? Explain…
- How did you hear about this listing?
The application must be completed completely. If it is not, I send it back to the tenant and ask them to finish it. Obviously, if they forgot one small section, I can make a phone call to find out – but I believe training your tenant to follow your policies begins here.
How to Run a Background and Credit Check
Let’s get down to the nuts and bolts of running background and credit checks – but first, allow me to explain the difference.
A background check looks at the tenant’s criminal and eviction history, as well as looking for fraud or deception.
A credit check looks at the tenant’s ability to pay their bills and obligations responsibly.
Several years ago, a law was passed in the United States that made checking the credit of a tenant much more difficult and cumbersome. Where before any landlord could simply enter in the applicant’s information and get back their credit report – there are now several hoops a landlord needs to jump through, including an on-site inspection. If this is an approach you want to take, there are several reputable companies you can use.
However, at BiggerPockets- we recommend using a screening service known as “SmartMove” which is offered by TransUnion to avoid that hassel. SmartMove is unique because:
- No site inspection is needed
- SmartMove includes BOTH criminal and credit background
- The Tenant applies and pays online
- The vital information from the Tenant’s report is sent to you, the landlord.
- No application process, no site inspection, no waiting period
To run a background and credit check through SmartMove – you’ll need to set up an account with the service which should take less than two minutes. Next, you’ll enter the property information and the potential tenant’s email address.
Your potential tenant will receive an immediate email prompting them to head to SmartMove and set up an account of their own which, again, should take them less than two minutes. They will be required to enter their name, current address, social security number, and a few other pieces of information. After doing so – they will submit their credit card number for processing (though – as a landlord, you can choose to pay for this service rather than the tenant.)
Almost immediately – you’ll receive an email letting you know their information is ready to view. At this point, simply log into your account and search for the tenant via the property address. You’ll see the following screen, letting you know SmartMove’s recommendation for renting to the tenant, as well as links to their Credit Report and Criminal History.
The image above has two things I wanted to quickly point out, labeled with a blue and a red arrow:
- Blue Arrow: This is the recommendation given by SmartMove. I’d recommend adding this into your determination – but don’t solely rely on it. It’s important to dig deeper and find out what else the Credit and Background Checks have to say
- Red Arrow: This is the area where you can access both the credit report and the background check. Notice it also lists their credit score here as well. We’ll look at both these areas, separately, next. Notice also that the above photo says “current address mismatch: input does not match file.” This means that the address that the credit reporting agency TransUnion has on file doesn’t match the address that the tenant entered for their current address. This is not uncommon – but be sure to verify what their current address actually is.
The Tenant Credit Report:
The tenant credit report will contain a wealth of information related to the tenants credit history, including a detailed list of all the tenant’s open or closed credit cards, car payments, monetary judgements, late payments, and more. This information can be overwhelming, but I recommend looking for the following items:
- Credit Score: Depending on your criteria, you may establish a minimum credit score for your tenants. The particular score may depend on your location and cliental.
- Current and Former Addresses: Often times, a tenant may conveniently “forget” a past address. Verify that the addresses given by the tenant on the application match the addresses on the credit report. The credit report may not include all the addresses, but any listed should be verified. You can ask the prospective tenant about the addresses or simply do a Google search for those addresses and, if it belongs to an apartment complex, you can call the apartment to see if the tenant ever lived there.
- Public Records:This part of the credit report will list any judgments levied against the tenant -which includes garnishments or evictions that have a monetary claim. Note: This does not included evictions without a monetary claim. To find these evictions the process can be a little more complicated. Each state and county has a different way of finding out, but it should be public info in each county. You should be able to search (if your county has online records) for your tenant’s name and/or all previous addresses listed on the tenant’s credit report. Look for any cases that involve a rental company or have the words “eviction” in them. It’s not an easy way – and most landlord’s simply rely on the credit report findings- but it is possible. You’ll also find out when you talk to previous landlords.
My policy is to never rent to a tenant with an eviction on their record, though some landlords put a time limit on it such as “no evictions in the past five years.” This is a personal choice and depends largely on your risk tolerance level and the current demand for rentals in your area.
- Vehicle Repossessions: Having a vehicle repossessed is strong indication that a tenant cannot handle their money very well. If you notice a vehicle repossession – definitely ask more questions about this.
An important note about screening a tenant using credit: In the United States of America, a law known as the Fair Credit Reporting Act states that:
“Anyone who uses a credit report or another type of consumer report to deny your application for credit, insurance, or employment – or to take another adverse action against you – must tell you, and must give you the name, address, and phone number of the agency that provided the information.” Source: www.consumer.ftc.gov
In other words – if the tenant’s credit history causes you to deny your tenant – then you must tell them why and give them the name, address, and phone number of the credit reporting agency you used.
The Tenant Background Check
At this point, you can check the second report generated by SmartMove – the Background Check (See the Red Arrow in the photo above.)
The photo below shows what the background check looks like with SmartMove.
In the photo above, the prospective tenant does not have any criminal background; if they did, it would show up here.
Advanced (and Sneaky) Tools for Tenant Screening
You’ve already learned about pre-screening through your marketing and over the phone. We then looked at the importance of screening a tenant in person and the rules of Fair Housing. Next, let’s look at
Screening on Social Networks
In today’s world, people often put more information publicly on their Facebook, Twitter, Google+, or other social network than they would even tell their own mother. I always do a search for my potential tenants and see if I can find any information that would help me make an informed decision. For example, a young couple once applied for one of my apartment units which does not allow pets. However, upon checking her Facebook profile page, we discovered she had a brand new puppy that she did not disclose and was attempting to hide.Drop By Their Current House Unexpectedly
For extra verification as to the tenants cleanliness – you can drop by their home unexpectedly to ask for an additionally signature or to drop off a form. This surprise visit will often tell you interesting things about the way they live and can help you decide if this tenant is worth renting to or not.
Calling Previous Landlords
One of the most important things, if not THE most important verification, you can do for your prospective tenant is the previous landlord verification. In general, the way a tenant has behaved in the past is probably the way they will behave in the future.
It’s not enough to simply call their current landlord – because many times, a landlord of a problem tenant will lie and give a stellar review just to get rid of a bad tenant. It’s always worth talking with their current landlord, but it is important to take their words with a grain of salt. Always call their previous landlords as well.
As discussed earlier, be sure to take notice of any addresses on their credit report and ask the tenant or simply search Google for the owner of their previous addresses to discover any deception. Additionally, keep in mind that sometimes a tenant will give you the name and number of a friend or family member – with the intent that that individual will lie and claim to be their landlord, just to give a stellar review. To combat this, it is a good idea to call the current landlord first and ask if they have any vacancies. If the person has no idea what you are talking about – you can assume you are being tricked and you can deny that tenant immediately.
When talking with their landlords, there are a few questions you might want to ask, such as:
- When did the tenant live there?
- Did the tenant always pay on-time
- Did you ever have to serve a legal notice?
- Did the tenant have any pets?
- Did you ever have any trouble or damage?
- Did the tenant give you proper notice to vacate?
- Did the tenant leave the unit clean?
- Was the tenant asked to leave by you or your company?
- Would you rent to this tenant again.
You may find that some landlords, especially larger property management firms, will require you to fax them over the tenant’s release of information (which you should have on your application) along with your questions.
Tenant Screening Through Employment Verification
It is also important that you verify your prospective tenant’s source of income. Just as when talking with their previous landlords, you will also likely need to fax over the “release of information” signature from the application before they agree to discuss the tenant. Always be sure to speak with the supervisor or human resource manager when verifying employment – not simply an employee (who are often willing to lie or stretch the truth for their friend.)
When talking with the employer, you may want to find out:
- How long has the individual been employed there?
- How much does the individual earn?
- Is this part time or full time?
- Is this position temporary or expected to continue?
To help speed up the process, you can also ask that your prospective tenant submit recent pay stubs with their application, allowing you to ask fewer questions to the employer.
What If the Tenant is Self Employed?
Obviously, if the tenant is self employed you cannot call an employer. In this case, you can ask for and verify income through the prospect’s tax returns. It is recommended that you ask for at least the previous two years, to ensure consistency. Keep in mind, however, that many self-employed people deduct a large amount of expenses, so it can be helpful to have someone knowledgable with tax returns to help you look over the results.
Calling Personal References
Finally, it can be a good idea to call the personal references put on an prospective tenant’s application. While the tenant is able to hand-pick those references, thus making them extremely biased, it still is a good idea to call. While a good reference probably won’t help your decision process much (due to the inherit bias) – a bad reference can help immediately disqualify a tenant. After all – if the tenants own family or friends can’t give a good reference, what kind of person do you think you are dealing with?
Should You Allow a Cosigner?
A cosigner is an individual who agrees to become legally obligated for the payment and condition of an rental. A cosigner is used when the tenant can’t qualify by themselves, usually due to income or a lack-of-rental history. Whether or not you choose to accept a co-signer to help bolster your potential tenant’s qualifications is up to you, but if you do, be sure to:
- Screen The Cosigner Like a Tenant – background, income, employment, etc.
- Be sure the cosigner owns property in the county in which you are renting (so they can’t simply disappear like a tenant might)
- Require an application fee from the cosigner as well
- Fully explain to the cosigner that they are financially responsible for the property and you will hold them responsible should the tenant cause damage or refuse to pay rent.
No matter how great the cosigner, they cannot stop a bad tenant from destroying a property. Don’t use a cosigner as an excuse to put in a terrible tenant that will cause you headaches.
Denying an Applicant
If you decide to deny an applicant, it is vital that you document your reasons why so there can be no question as to whether or not there was discrimination involved. By having carefully defined standards (see above) you have the ability to easily deny a tenant that does not meet your standards.When I deny a tenant, I like to avoid complication by having the tenant “disqualify themselves,” a trick I learned from Landlording on Auto Pilot by Mike Butler. If a tenant doesn’t qualify because of a bad landlord reference – you have two choices. Which sounds easier to you:
- “I’m sorry Jerry, but your landlord gave you a terrible review and I can’t rent to you” or
- “Hi Jerry, I ran into a bit of a snag in getting positive feedback from your previous landlord – so what I need you to do is go and speak to that landlord and get him to call me with a positive review and we can move on. Can you do that for me Jerry?”
Jerry will, most likely, mumble “oh – okay, sure” and then disappear, never to be heard from again. You never disqualified Jerry – he simply gave up due to the work you needed him to do.
When you do disqualify an individual, I always send a letter to them stating exactly why they were dismissed. This can be as simple as a form letter which you check a box stating why they weren’t approved.
Typically, if a tenant applies for a property and fails to qualify – they forfeit their application fee due to the time and cost associated with working their application through. However, if you deny them simply because someone else came first, then you must return their application fee to them.
Final Thoughts
This has been the BiggerPockets ultimate guide to tenant screening. If you have any questions, please feel free to leave a comment below or jump into the BiggerPockets Forum and ask questions to receive back responses from dozens of qualified and seasoned landlords.
At this point – you will have learned the exact process for screening tenants. Customize this guide to fit your own style and location, but refer to this guide for reference if you need a reminder or refresher on tenant screening.
To start a tenant screening right now – click the button below to check out SmartMove.
Finally – for more information on landlording, be sure to check out:
How to Rent Your House: The Step-By-Step Ultimate Guide
How to Be a Landlord: Top Ten Tips for Success.Leave your comments below! Am I forgetting anything? Do you do your screening differently? Let me, and other readers, know how you screen your tenants.
Peace.
{ 59 comments… read them below or add one }
What resources do you use to find out if the applicant has any nonmonetary evictions?
Hi Shanequa,
Each state and county has a different way of finding out (it should be public info in each county, but the method for finding out is different.) You should also be able to search (if your county has online record system’s) for your tenant’s name and/or all previous addresses listed on the tenant’s credit report. Look for any cases that involve a rental company or have the words “eviction” in them. It’s not the easiest way – and most landlord’s simply rely on the credit report findings- but it is possible.
You’ll also find out when you talk to previous landlords.
Hope that helps!
If you are searching court records, many jurisdictions will refer evictions as “Forcible Entry and Detainer” actions if that is the language used in that jurisdiction’s laws. So the cases may not necessarily be identified as evictions. Most commonly, such cases are Forcible Actions or FED cases.
If available in your state/county, online search engines to look at past court cases are usually found on the Clerk of the Court’s website. Most of these search engines require an exact match to pull up the relevant records, so be sure to try a person’s name with/without a middle initial etc. Two things to be aware of: (1) These database are also subject to their own internal mistakes – so a search may produce no results if a party’s name has been entered wrong. (2) Some jurisdictions only allow online access to pending cases (usually scheduled for a court date within 7 days) while others allow a search of all court dates in a certain period (for example, all cases filed after January 1, 1990). So, your results may not be comprehensive.
If you have questions about searching court records online, you should call the Clerk of the Court in that jurisdiction.
Kacie – you’re the best! Thanks!
Wow! This is the ULTIMATE guide to tenant screening!
And what a great infographic.
I’m forwarding this to all of our students. This is amazing.
Thanks, guys. Everyone needs BiggerPockets!
Thanks Karen! And thanks for your help catching my punctuation and other mistakes! Much appreciated!
Is that gross income or net income for the 3x rent rule?
I usually use Gross – but I suppose that’s negotiable, depending on how strict you are and what kind of tenants you have. Hope that helps!
I should print this infographic out and hang it in my office!
Lol thanks Ilir, you should!
Fantastic post Brandon!
Sharon
Thank you Sharon!
Great Post, I am a rookie Owner occupy of a Duplex, I currently have great tenants that were rented by previous owner. Their lease is up in two months, I was looking for guide on screening and this post give me a sense of what I need to pay attention to. One question though if any can answer, when is the right time to ask tenants if they will be renewing the lease or not..lets say the lease is up in April, 2013
Thanks again!
No problem Allan! On my annual leases, I always ask about a month or so before the lease ends – and I tell them I have to know 20 days before the end of their lease. This gives me three weeks to advertise and/or arrange new tenants.
Hope that helps! Thanks for commenting
Wow, Brandon another epic post. I thnk you have it all covered in this one. Im gonna read it again to make sure I didnt miss anything!
Lol thanks Mike! 5000 words…I probably could have doubled it
If you feel like sharing this on your G+ … I wouldn’t mind 
You are not a man of few words! Consider the G and social sharing done!
Nice post. We’ve always been biased to applicants with email addresses and even those who can scan an application in. One thing I really like about the screening service you’re promoting is that it requires that the applicant get on line to complete the application. I understand having to meet applicants to show the unit, but I really don’t want to have to give them an application in person, then meet them again to receive the application and then again to complete the lease. I can facilitate usage of electronic signatures and have started doing so much more in the last year. I’m don’t think people who don’t use the internet are a protected class, but I suppose that could be argued
Alan – I feel the same way. I get better quality tenants from Craigslist than the newspaper- because the Craigslist people know how to use a computer. The same applies for online apps. Thanks for the comment Alan!
Thanks Brandon, I have another question that I am hoping you or any of the cool folks can comment. crooks are usually clever, in the case potential tenant mislead you on the application and you come to find out after lease is signed and they have moved in, can you evict them based on that? of course if they lied about some requirement that should not be overlooked
Honestly – I don’t know but I’m curious as well. You should post that in the Forums – and tag me in the post and I’ll check in!
Wow! Very nice!
Thanks Al! Not as fancy as your latest Infographic on landlording (This was my first ever attempt at making one!) but it works!
Allan brought up a good point, which is why I never tell people just how much info is online, or how easy it can be to find {hint: Search “(your state’s name) courts” Many states are free to search online}. I never tell them what I find online, since I don’t want them giving a fake name to the next guy. AND, I always get a copy/photo of their drivers license before I let them move in, and verify all names and info. You never know…
I use an online application, with PayPal link to pay app. fee, and deposit. If I’m sitting by my computer when they call, I search them while talking. Then I ask “Do you have any criminal issues…evictions on your record I should know about?” I get habitual felons saying “no,” and I’ve had several callers WHO HAD EVICTIONS FILED ON THEM IN THE PAST FEW DAYS deny it. I send them to my online application, and that’s the end of it.
great advice Tom! Thanks for commenting and sharing. Crazy tenants! It’s like they don’t know we are going to find out
Forgive me if my questions are too basic/general, I am brand new landlord and also new in RE, but I very interested in giving it a shot., i read millions of comments daily on BP the more I read the more I see there are a lot to be learned/more questions keep poping up.. Here are my questions
1: Is it against the law to deny a tenant who has filed for BK
2: What happens if tenant was not BK when they moved and file for BK after they have moved in?
Lol, no worries Allan! No question is too basic in this game. Except maybe “what is a house.” Then I’d send you away
As for your questions – I don’t believe #1 is against the law, as they are not a protected class.
If they file afterwards – there is really nothing you can do as long as they keep paying their rent. A BK isn’t grounds for an eviction, and most people with BKs will pay rent just fine. It’s just a big red flag, which is why I don’t rent to them unless I have to.
Definitely jump into the Forums on BiggerPockets and see what others think about these issues. It’s one thing to get my opinion – another to get the opinion from Dozens (or more) experienced investors.
Hope that helps!
A Superb post! I’m really considering using SmartMove but I have a small question.
Can SmartMove’s tenant screening work when screening for lease option tenant-buyers?
If possible, what are some recommended tweaks to make it work for screening tenant-buyers?
Sure, the process really is identical. With a tenant-buyer, though, I would pay much more attention to the Credit Score and the items on a Credit Report – since that is what the bank is going to care about when they go to apply for a loan. Look at how much debt they have compared to their income also.
Dude. Brandon – this is what we call EPIC CONTENT. Thanks for taking the time to put this all together. A+++
Hey Seth – I’m glad you like the post. Please do share it! Thanks.
Thanks Seth! I’m a fan of writing Epic stuff
(as I know you are!)
Thanks for the great article; I’m preparing to be a landlord for the first time.
A couple of questions:
From the article, I see that I can’t ask how many children a potential tenant has, but I can ask how many people will be living there. Is that a valid reason for denying an application (e.g. a tenant wants to move 6 people into a 2 bedroom house)? Is it legal to put into the contract the maximum number of people who can live in the house, and is exceeding that a valid cause for eviction?
From the infographic (“check out their car, appearance, attitude, etc.) – If a tenant passes the background/credit/previous landlord/employment/etc. checks, but I have a bad feeling about them (e.g “This guy really looks like a creep, and his girlfriend has a bunch of bruises…I don’t want him living here”) how can I go about legally denying his application?
Thanks again!
Hey Jim -
I’m no attorney, but I believe there is nothing wrong with limiting the number of people, per bedroom, that can stay in a home. At least in Washington State I know that’s true.
As for denying an app – I am going through that EXACT thing right now. I had a guy come and look at my rental – and everything checks out okay, but I know the guy because I once bought a flip that he had lived in and HE USED A CHAINSAW TO CARVE UP THE INSIDE OF THE HOUSE WHEN HIS PARENTS WERE BEING FORECLOSED ON. Yep. A Chainsaw. So how do I deny him? I’m still working on that one myself
I think you have to be careful, but everyone has something in their past you can deny them for. Whether income, credit, background, or something – there usually is. If not, honestly -I’m not sure. I think this would be a great Forum discussion in the BP Forum if you feel like starting a thread. Tag me in it, and I’ll jump in too!
Anyone have a good answer for this here, as well?
Hi Brandon,
It’s been a while since you wrote the comment above. Did you find a way to deny that prospective tenant? If so, how?
Also, is there a screening criteria that can be applied to anyone but can be passed by almost no one?
Say, a credit score of 850? Would you then have a right to deny anyone because they don’t have a credit score high enough without telling them the real reason? And you can always make an exception and accept a lower score for whoever you like
Thanks
Mike
Brandon-
Great guide to tenant screening. I follow…or try to follow…most of the guidelines you mention but this is the best summary of the important info I have seen. I recently did a post reviewing a service that I use. I am definitely going to go back and add a link to your article. Great work. Thanks!
Awesome article!
My question is, how do you verify that their income is 3x the rent? Would a simple call to their employer work? It seems to me like the employer might not disclose that information.
I usually ask for a copy of their last 2 check stubs as part of the screening process. You are correct that trying to get this info from the employer is problematic. Having them provide check stubs has worked great for me.
3x rent income requirement is throwing me off a little bit, I have rented many times before, never I have been asked for pay stub. Some people may make 10x of the rent, but poorly manage their money or they are in deep hole. I would think makes more sense to validate the emplyment and the leghth of the employment and pay closer attention to Credit History. I like to believe people are smart enough to know what they can afford
Allan – Unfortunately, many are not smart enough, which is why landlords have to evict so many tenants for non-payment of rent. That’s why they need to be cautious when screening. Established and experienced landlords are typically good at doing this, but many novices often fall prey to their lack of expertise, sadly.
I agree with Josh. Most of my potential tenants say they can handle their finances, but if I ever let anything slide, it burns me every time. I’ve learned that people generally don’t know how much they can afford – which is why banks also do such tight tests. Sure, some people can handle their own (like you or I) but most aren’t as responsible. That’s why credit card debt is so crazy high in this country!
Using SmartMove, and the potential Tenant is paying for the service, do you collect a non-refundable Application Fee, can a Landlord collect this fee, if the Tenant is paying for the service? In this situation, if you can collect, how much do you collect since a portion that you are collecting is not going towards the background checks?
Hey Geoff – I would set it up so the landlord pays the charge, and then take the application fee from the tenant for whatever amount you want. For example, I charge my tenant $35 for an application fee, but SmartMove is just $25 – so the $10 cover’s my time for calling and verifying people. I suppose you could also have your tenant pay both online and pay a little extra to you, but that complicates it a little. Thanks for the question – I hope that helps!
What about the inherited tenants? I never thought of not believing what the seller said about his tenants. One turned out to be a deadbeat, another a drug dealer, and a third one had a cat whose fleas infested the whole building. The fourth and only apparently decent one was a little old lady who moved out a few months later because I wouldn’t let her install a washer and dryer in her kitchen. (There is a laundry in the basement.)
Oh well, I managed to get rid of them in due course and they have provided me with several lessons about tenant screening… and countless anecdotes!
Hey Gina, I also don’t generally believe what people say about their tenants once I take over. I generally just deal with the issues when they come up, and remove people when it becomes a problem, but I suppose running a background check for existing tenants wouldn’t be a terrible idea if you can convince your new tenant to allow it! Thanks for the comment, and good luck to you!
Several months ago while looking for tenant screening programs, I came across this site so I decided to give SmartMove a try. Here are the following Pros/Cons IMO:
Pros:
1) Easy to use and user friendly – for both landlord and tenant
2) Offered by a trusted company (i.e. TransUnion) resolves tenant hesitancy over potential identity theft/fraud/abuse
3) The software keeps both parties in the loop, sending updates on the status of the process
Cons:
1) If the tenant’s employer does not report income – the income the tenant supplies SmartMove will be unverified. (e.g. The tenant can claim to make $1 million dollars a year and the program has no way to verify this – and will still recommend tenant acceptance based on credit score). I still ended up having to ask for a copy of the tenant’s W2 etc which basically shows the tenant’s private info – defeating the purpose of SmartMove’s of tenant privacy.
2) If you sign up for SmartMove using the BiggerPockets link, the BP logo will appear for the tenant to see. While I find BP to be a valuable resource, I don’t like the tenant seeing the logo, as the word itself “Bigger Pockets” showing up on the screen kinda reinforces the greedy landlord stereotype. Yes, I like money but I also value my tenants as people rather than having them objectified as a revenue source. Upon a tenant’s first encounter with me, this could possibly be off putting. Maybe the BP logo should be concealed on the tenant interface.
Chris –
Thanks for the feedback. After thousands of customers have used the service via our partnership, this is the first time we’ve had someone make such a comment. I can certainly see your point about not wanting to appear to be greedy, however, we’ve got a lot of people using the service every month for their tenant screening (thousands of screens in the past years); it works, and our company is far from a site for greedy landlords — in fact, quite the opposite. Through our partnership, you save $5 per screen, but if you like the service but don’t want our logo attached, you can go to the portal directly. Either way, good luck!
BTW – We have no control of the interface, and I’ll say personally, I don’t see you losing any tenants because you ask them to use a tenant screening product co-branded as “BiggerPockets.” If they decide not to do the screen, it isn’t because of our brand, but because they don’t want to be a tenant for a landlord who actually does their homework.
Joshua, I just want to be clear that I don’t think your site is for “greedy landlords” in any way shape or form! In fact, a lot of meaningful information & dialogue are available free of charge which is pretty amazing. I wasn’t worried about losing the tenant, and the tenant used the service with no complaints at all. I was more concerned with the subliminal impression on someone who is not familiar with your site; so please consider my critique as a minor quibble.
Best,
Chris
Chris – I’m not mad at you… Love all feedback. Any criticism is always helpful. Thanks for following up!
Very detailed, Excellent Post! I have a good size rental portfolio and I am planning to hire an assistant to manage my properties. This is going to be good reference to set up the process.
We’re glad you found the value in it, Aman!
great guide and Im also working on a tenant placement thing on the side of my business. so these would be advantageous for me
Thanks Jamaal!
Noticed SmartMove does not provide an eviction record search. Any suggestions on where to get that? Thanks!
This guide is absolutely brilliant. I often direct many of our prospective landlord customers to it so that they have it as a quick reference. You’ve covered all the bases!
Thanks David!
Brandon another solid article! Great information as I try to decide whether to self manage or get a property management company since I’m investing part-time. Has anyone written a guide on selecting and working with property management companies? Sure this topic has been discussed extensively in forums so I’ll check there.
Thanks
Thank you for the article it was a big help.
I do have a question as to how you stop wasting your time showing the apartment when people call and don’t meet the criteria during a pre-screening call. How do you politely deny showing them or tell them they don’t meet the criteria?
Hey Tori, thanks for reading and commenting! I wrote a WAY more definitive guide to the actual process, called “How to Rent Your House: The Definitive Step by Step Guide” so definitely check that out for a lot more – but to quickly answer your question, I always make sure I let them know of the criteria on the phone and ask them point blank “does this work for you?” and I just refer to the “policy” (that’s how to politely do it! No one questions “the policy.”) I also schedule group showings, knowing 50% of people won’t show up. I’m also a big fan of not letting people know I’m the owner, so it’s much easier to turn people down cause I’m just doing my job. For more on this, check out How to Be a Landlord. Hope that helps some!