Landlording & Rental Properties

10 Screening Tips to Help Avoid Profit-Tanking, Time-Consuming Tenants

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Placing quality tenants in your rental property is one of the most important components to a successful and profitable investment. It’s worth taking the time to implement a system and strategy for analyzing potential applicants. Here are some helpful principles to consider when advertising and screening for tenants.

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10 Screening Tips to Help Avoid Profit-Tanking, Time-Consuming Tenants

Set Expectations With Advertising

You can help ease the screening process by making sure that you are listing your detailed expectations in the ads that you place. Phrases such as “single families only” or “no pets accepted” should be listed, as well as the size of the home, the location and the rent amount. This will eliminate many of the calls that are not going to be the right fit for your property.

Use Applications Wisely

An application is an important part of the process of screening your prospective tenant. Regardless of the exact system that you use to choose your tenants, you need to have an application on file in case of any legal issues that may come up. This should provide you with basic information that you can use for credit or background checks. Standard rental applications can be found online and printed out.

Ensure the Ability to Pay Rent

Knowing that the tenant you are considering is able to pay the amount of rent you are asking is the first big hurdle. A good estimation to use is multiplying the rent you are asking by three and comparing that to their income. This calculates a rough estimate of how much they are paying in rent, utilities and other living expenses against what they are earning. You want to know that you are not going to suffer because there is not enough money coming in the door to pay the rent you are asking.

Related: The True Cost of a Bad Tenant: Why You CAN’T Afford Not to Screen

Check Out Their History of Timely Payments

Check the potential tenant's credit report or ask for references from a previous landlord about their payment history. You are checking to see if the prospect pays regularly and on time. Their history of timely payments should give you a good indication of what you can expect in the future. Having to deal with a tenant that doesn't pay on time is something that can be hard to handle, extremely time consuming and harmful to your potential income production.

Keep an Eye on Cleanliness

Make sure the tenant you are considering is good at maintaining the house. While they are renting your property, it is important that they are able to care for the overall condition of the rental property. While you will likely be responsible to maintain the exterior of the property, you need to be sure that the tenants are going to report any problems that occur. The longer a problem is left unattended, the worse the problem can become. A leak might seem like a small thing, but without repairing it in a timely manner, the leak could easily do major damage to the property and even cause exceptional mold problems that could cost a fortune to have fixed.

Verify Employment History

The longer a potential tenant has worked at the same job, the better. You want to make sure that their source of income and ability to pay the rent will last at least as long as the lease period. Ideally, you want the tenant to work for a reputable company, and it is always a good idea to check employment references.

Check Credit History

Using credit information to analyze a potential tenant is a good idea, but not necessarily the whole story. Someone may have had a job loss or medical problem that tanked their good credit, but now that they are back on their feet, they are paying regularly. A rocky economy sometimes means taking a chance on people. Do not believe solely what a potential renter tells you. It is vital that you check their credit history to get to the truth.

Focus on how they are paying their debts over the last year or two. You want to look for some obvious improvements in their recently recorded accounts on their credit record. Someone who is consistently late on other types of debt will likely be a late or non-paying tenant as well.

Perform a Criminal Background Check

Make sure to check out the criminal history of your potential tenant. Another way to pre-screen tenants is to make it obvious in your advertisement that you will be conducting a criminal background check. This can help you to avoid wasting time with phone calls that aren't going to pan out. The last thing you need is someone dealing drugs or wanted by the police. While this may seem obvious to most landlords, it's important to spend the time and resources to get a good background check before placing a tenant.

Check Into Their Eviction Record

Avoiding tenants with any evictions on their record is a good way to ensure that you aren’t getting a repeat offender into the building. Call previous landlords to find out if the tenants left on their own or were evicted. While there are always unusual circumstances, double check the stories before making a decision.

Related: The Ultimate Comprehensive List of Tenant Red Flags

Go With Your Gut

While your gut instinct may work in other instances, it’s probably not best suited for placing a tenant. While you can certainly take the time to get a good feeling of the individual, be watchful and cautious as they analyze the house and ask you questions. That said, you need to combine this with what you find in the basics of your tenant screening and application process. Weigh the items together and choose wisely. The wrong tenant can be costly and time-consuming.

Landlords: What would you add to this list? Has skipping any of these steps ever lead to a tenant disaster?

Weigh in with a comment below!

Ken Corsini is a seasoned real estate investor and business owner based in Woodstock, Georgia. Ken is best known for his role on HGTV’s hit show “Flip or Flop Atlanta,” and has flipped over 800 hou...
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    maggie smith
    Replied about 5 years ago
    Here’s a question for the app- “In an emergency, if you can’t pay your rent, who will? ” Get that name, relationship and contact info up front, and call the contact to double check. I get a non-refundable cleaning fee up front, “towards final cleaning to hotel standards.” This does not prevent me from demanding a broom clean place upon termination, and from taking out additional funds from the security deposit, if needed for a big mess.
    Katie Rogers from Santa Barbara, California
    Replied about 5 years ago
    I am guessing you are not from California. In California, it is against the law to make any part of the deposit “non-refundable.” If the tenant has left the place broom clean, and with only normal wear and tear, they have satisfied the conditions to receiving their entire deposit back.
    maggie smith
    Replied about 5 years ago
    Katie, I am from Florida. However, you make a most excellent point. I attended a presentation by John Schaub this weekend (author of several best selling books about re investment), and he emphasized that every landlord should look up the statutes governing landlord/tenant regs in their state, and memorize them. That important. Guess I have some homework to do!
    Mindy Jensen BiggerPockets Community Manager from Longmont, CO
    Replied about 5 years ago
    In your first point – Set Expectations with Advertising – you recommend stating “Single Families Only” or No Pets.” Stating ‘single families only’ can be perceived as a Federal Fair Housing Violation – discriminating against familial status. While you are probably recommending that they inform people up front that multiple families are not going to be allowed to live in the property, it can also read that you won’t rent to single people, so be careful how you word your advertisement. But absolutely set as many expectations up front as possible. Another is to conduct phone interviews so you can weed out even more people before you meet them in person. Great article, Ken.
    Alex Hamilton from Roseville, California
    Replied about 5 years ago
    Mindy makes a good point Ken. Don’t expose yourself to a lawsuit by advertising your tenant screening requirements improperly. That being said, I agree it’s beneficial to be forthcoming with your criteria. Be sure to apply the same screening criteria to all applicants equally. Landlords that “Go With Their Gut” when choosing tenants will have a hard time proving compliance with Fair Housing Laws if sued for a discrimination violation.