4 Tips for Finding World-Class Tenants for Your Rental

by | BiggerPockets.com

 I once bought a rental house that came with an existing tenant. Things were fine for a few months — but then she started paying her rent late.

Then she stopped paying entirely.

She decided illegal drug use was more fun than paying rent!

Soon after, she was evicted — and she left me thousands of little cockroaches, a death threat note, and the worst smell you can imagine.

Sometimes being a landlord is such a joy.

On the other hand, I’ve had dozens of incredible tenants who pay rent on time, take great care of the property, and are helping me build wealth and financial freedom in a spectacular way.

So, how does someone find more of the great tenants and fewer of the bad ones?

If you want to succeed as a landlord, you must do just that. You must learn how to discern which are world-class tenants to avoid renting to scumbags.


Well, today I want to share four tips for attracting word-class tenants.

4 Tips for Finding World-Class Tenants for Your Properties

1. Think like a funnel.

In business, a sales funnel is the idea that you want to get a lot of leads coming in, knowing that only a few will ever buy from you. For example, 1,000 people might see an ad for a pair of socks in the newspaper, but only a few dozen of those will go to the store, and maybe just a couple will buy a pair of socks. That’s a sales funnel, and it’s found in almost every industry — including landlording.

Your job as a landlord is to use this exact funnel to attract tenants — a lot of them.

Think of it this way — if you get just one person to call about your vacant property, what’s the chance they are going to be a great tenant? It’s kind of a gamble. But what if 1,000 people called about your property. Could you find one that is going to be perfect? I would hope so — or else you probably need to move towns.

The point is, the more people you can put in the top of your funnel, the more picky you can be to get the one ideal tenant at the bottom.

So how do you do this? You need to have an advertising system that’s going to bring you qualified leads. This could be Craigslist, Zillow, Postlets, the newspaper, a sign in the yard, a post on Facebook — or, if you are like us, you could do ALL of these. The more marketing we do for tenants, the greater chance we have of finding that needle in a haystack.


Related: 8 Tips for Fairly But Firmly Dealing With Problematic Tenants

Now, once you start getting leads into your funnel, it’s time to start weeding out the bad ones. Which brings me to tip #2…

2. Set high standards.

In our landlording business, we have carefully defined the standards that state who we are willing to rent to — and who we are not. This list is written on our website, written on every piece of marketing material we put out, and verbally told to every prospective tenant over the phone.

Our standards are simple:

  • The tenant must earn 3 times the monthly rent from documentable income sources.
  • The tenant may not have any prior evictions.
  • The tenant may not have any felonies.
  • The tenant must have a 600+ credit score.
  • The tenant must have excellent references from past landlords.

If a tenant doesn’t meet these requirements, it’s unlikely we’ll ever rent to them.

Having this carefully defined list of standards helps us in two distinct ways:

  • It discourages time-wasting prospects from even contacting us.
  • It helps us look at each candidate objectively rather than emotionally.

Yes, I’m sure we could rent to a tenant who had a prior eviction, one who has bad credit, or one who had a bad past experience with a landlord — and maybe they’d be fine.

But maybe they wouldn’t — and I don’t like to increase my chance of dealing with a bad tenant because of the HUGE negative consequence of a terrible tenant.

I’ll let other landlords take that risk. I’m in this game to win, not gamble.

OK, on to number 3.

3. Screen like your future depends on it.

Because it does.

Tenant screening is not some afterthought so you can check off some boxes.

It’s perhaps the most important step in the process — so give it the attention it deserves.

Screening is the process of verifying that the tenant meets all your minimum standards that we discussed in step two.

Because — let’s be honest — people are not always truthful. It’s your job to verify everything.

For an in-depth, step by step guide to tenant screening, including the actual application I give to tenants to fill out, check out “The Ultimate Guide to Tenant Screening” or pick up a copy of The Book on Managing Rental Properties on Amazon.

But let me give you a brief overview of how we do our screening in three easy steps:

  1. First, call their place of employment to make sure they earn three times the monthly rent.
  2. Next, check with past landlords to make sure they’ve been a good tenant in the past. The kind of tenant they’ve been is the kind of tenant they’ll be. This is one of the most important steps in the screening process and the #1 most often ignored by landlords learning how to find tenants — to the peril of many landlords.
  3. Finally, run a background and credit check on the tenant. There are numerous resources you can use to do this, such as RentPrep.com, MySmartMove.com, or one of hundreds of similar companies online.

Look for past evictions, judgments, felonies, and other indications that the tenant might be a troublemaker in the future.

Of course, be sure to review local, state, and federal Fair Housing Laws to make sure you are not engaging in any illegal discrimination when screening tenants. The penalties are severe for landlords who violate these laws.

Now, if the tenant makes it through your screening process, then you can feel confident that you are placing your bet on a winning horse. It’s time to sign the lease and move them in.

But getting a world class tenant doesn’t end there. For that, let’s go to step four.


4. Train and manage effectively.

The final step in finding incredible renters who will take care of your property, pay on time, and help you build tremendous passive income is training your new tenant to be world-class.

Related: 5 Scams That Trick Landlords Into Accepting Less-Than-Stellar Tenants

You see, most tenants want to be great, but many just don’t know how. It’s your job as the landlord to train them to be so.

Train up your tenant in the same way you would train up a child: Establish rules, make them known, and instill consequences for breaking those rules.

For example, your tenant should know perfectly well when rent is due, where to pay it, and what happens if they don’t. If they decide to pay late some month, don’t be lax on the late fee, even though you’ll want to. Imagine setting up rules for your toddler and then never enforcing those rules. What are you going to end up with? A spoiled brat that causes you nothing but headaches. In the same way, your tenant will likely become more and more difficult the longer you let problems go unanswered.

But that also means you need to live up to your end of the contract as well, taking care of maintenance issues promptly, keeping lines of communication open and honest, and treating your tenant with the highest levels of respect.

Be firm but fair in your treatment of tenants, and you’ll enjoy years of mutual respect and a truly world-class tenant.

How do you place the best tenants possible in your rentals?

Leave your comments below!

About Author

Brandon Turner

Brandon Turner is an active real estate investor, entrepreneur, writer, and co-host of the BiggerPockets Podcast. He began buying rental properties and flipping houses at age 21, discovering he didn’t need to work 40 years at a corporate job to have “the good life.” Today, with nearly 100 rental units and dozens of rehabs under his belt, he continues to invest in real estate while also showing others the power, and impact, of financial freedom. His writings have been featured on Forbes.com, Entrepreneur.com, FoxNews.com, Money Magazine, and numerous other publications across the web and in print media. He is the author of The Book on Investing in Real Estate with No (and Low) Money Down, The Book on Rental Property Investing, and co-author of The Book on Managing Rental Properties, which he wrote alongside his wife, Heather, and How to Invest in Real Estate, which he wrote alongside Joshua Dorkin. A life-long adventurer, Brandon (along with Heather and daughter Rosie) splits his time between his home in Washington State and various destinations around the globe.


  1. This standard, “The tenant must earn 3 times the monthly rent from documentable income sources,” turns the customary standard on its head. The customary standard is the landlords should set the rent to be no more than a typical tenant’s one week or ten-day’s wage, so as not to price out the typical tenant who is of course, the mainstay of the rental market.

      • The standard used to be as I stated (and according to HUD, still is), but about coincident with the last bubble run-up, landlords turned the standard on its head. It probably happened when house prices and house values became so disconnected. Investors paid too much for the house, then set the rent to be an amount that would cash flow, or at least break even. Then they required prospective tenants to make at least 3 times the rent without bothering to take into consideration the demographics of the typical tenant. Supply and demand might force the landlord to adjust down the rent expectations. When that happens, landlords justify their investment as future appreciation potential rather than present cash flow.

        Let us suppose a tenant making median wage even though we know the typical tenant makes less than median wage. The median wage right now is about $50,000. HUD and all the financial advisors recommend that housing cost no more than 25-33% of salary, and advise people to seek housing accordingly. On a monthly basis, 25% is about one week’s salary. Thus a mid-size unit (not a studio and not a suburban house) should be no more than about $960/month. That is still too high because typical tenants make significantly less than median wage. This is how market rents used to be figured, as opposed to today where market rent has bee redefined as what the market will bear.

        Furthermore, charging according to what the market will bear instead of what is reasonable given the rather inelastic nature of typical tenant wages creates some of the problems landlords experience. In many communities, it is impossible to find housing that meets affordability standards. No wonder tenants resent landlords, and no wonder there are rent defaults. A bit of research will probably show that when rent was within affordability standards, there were far fewer evictions.

        People often think the way things are today is how they always were. People forget there was a time not that long ago when no one had a credit report, and landlords nevertheless managed to screen tenants successfully. The credit report becomes more important when rent is outside of affordability guidelines. Otherwise, considerations besides credit reports are more indicative of a great tenant, such as utility letters; previous landlord recommendations; clean car; clean, quiet respectful demeanor, etc.

      • Yes, the math is the same either way. What is different is the baseline. Are you expecting tenants to make 3 times your rent, or are you charging 1/3 of a typical tenant wage? The first can (and does) price out your typical tenant market while the second obviously does not.

  2. Kevin Fox

    Great stuff, Brandon.

    Your suggestion about training tenants to act in the manner you want them to is something I do not see harped on nearly enough. In some ways, I think the landlord is as responsible for the tenants actions as the tenant themselves. L

    WAY too many landlords want to be ‘chill’ and seem to be afraid of charging late payments according to the terms of their lease. I see people posting in the forums all the time about how they only charge late fees after the 3rd/4th/5th occurance, or after the rent is a full month past due; which is absolutely crazy to me.

    Don’t get me wrong, I do think that late fees should be waived in situations where the tenant is blindsided by challenging, unforeseen circumstances making it difficult or impossible for them to pay on time. However, it has been my experience that, compared to the number of people who claim to be going through such circumstances, these truly unpredictable, unforeseen tragedies are few and far between.

    Unfortunately, time and time again, I have seen the cliche about giving people an inch and them taking a mile hold true when it comes to late payments.

    I think the worst part is how many people I see asking about ways to reward tenants for paying on time, rather than punishing them for being late. Maybe it’s just because I’m in San Diego where there’s an incredibly strong renter-pool but, in my opinion, your reward for paying on time is that you get to continue renting the property, you don’t have to pay a late fee, and I won’t start the eviction proccess.

    Maybe that’s just me though.

  3. Penny Clark

    Nice article Brandon! And thanks for putting some of the responsibility on landlords who don’t enforce rules with wayward tenants. It can be uncomfortable to tack on a late fee after the 5th or to demand the tenant remove that eyesore of a couch off the porch. If landlords can’t treat this like a business then they should hire a property manager.

  4. Brandon, please check the new Federal regulations about felons. Seems we can no longer disqualify a tenant because they have that negative .There are others. Just came out 2 weeks ago.

    • Scott Weaner

      I think that you can still deny felons. First of all, the HUD rules are not LAWS. Second, just make your standard “No felonies in the past X years, and no violent felonies EVER.” I will not knowingly rent to a felon, unless HUD plans to indemnify me against property damage and financial loss.

      In my case, I can just show them my tenants, the majority of which are African American and Hispanic, so I can’t really be discriminating against them, can I?

      • Brandon Turner

        Hey Bob and Scott –

        So, yes – I’m aware of the new Hud guidelines – but here’s my thinking.

        The new guidelines state, “While having a criminal record is not a protected characteristic under the Fair Housing Act, criminal history-based restrictions on housing opportunities violate the Act if, without justification, their burden falls more often on renters or other housing market participants of one race or national origin over another.” I would argue – a felony IS a justification, as long as I held that standard across anyone who applied regardless of race. So a white male with a felony is treated the same as a non-white male with a felony.

        Of course, if I was called into court to prove this, I would need to find statistics that show that people with prior felonies have caused more harm to their neighbors than those without felonies, and people with felonies have a higher rate of evictions than those without. Of course, right now, those are just my theories as I’m not aware of any studies done on the topic, which would need to be done if a lawsuit was served. Maybe we, at BiggerPockets, can do that study soon. It would be fascinating to find out.

        I’m also not an attorney so everything here is just my opinion. 🙂

  5. james russell

    good catch on the non disqualification for felons. but in Brandon’s defense he did say to keep up with fair housing laws to make certain you don’t get dinged with major penalties from braking said laws. but, if no one has checked in the last 2 weeks that is really important info to share. and since i am renting my first property this week and modifying our own contracts, that’s really helpful. especially to me! thank you both for this info

  6. Neil Shawyer on

    Very interesting. I’m new to the real estate business and rental. I like the section on training your tenant, that part had never crossed my mind what with all the things going on around me and learning how things are done. That’s going on my list as I write.


  7. Pete T.

    Katie, I would obviously expect the tenant to make 3 times the rent as a general rule of thumb. The rent will be determined by the area and quality of the property, as all properties are not equal. I didn’t think the felon legislation passed yet, but a solid criteria for screening really negates this issue somewhat.

    • Obviously expecting the tenant to make 3 x the rent only works if your rent is no more than 1/3 of the typical tenant’s salary. Otherwise, you expect your units to be like Lake Wobegone where all the tenants have above average wages.

  8. Justin Sheeran

    Thank Brandon.

    You mentioned “First, call their place of employment to make sure they earn three times the monthly rent.” Do you find that employers generally give you this information freely? I haven’t tried but I can imagine them telling me they can’t release that information to me.

    • Brandon Turner

      Great question, Justin. So, when a prospect fills out an application – that application has a “release of information” section which allows me to verify the information on their application. I’d say 50% of the time, the place of employment simply will tell me over the phone. The other 50% of the time, I have to fax or email the “release of information” to them, then they will release it. This is fairly standard practice for HR departments.

      Hope that helps!

  9. Peter Mckernan

    Good Article Brandon!

    Making a note of number 4. I have one renter that has been in there since we bought the place three years ago and wants to rent for many more years to come! She has kept the place looking nice and has even refurbished the old wood floors underneath the carpet that was put in when the old owners had the place.

    Keep up the good content!

  10. Matias Escobar

    Hi Brandon, Great article. When you say tenants must make 3 x times the rent amount, are you saying each tenant must make that amount or if for instance there are two working adults tenants paying for the rent you would qualify their income as one for the whole unit? EX: rent is $1000 and there are 2 adults, each making $1,500 per month: would that be enough? Thanks!

    • Truth be told, Brandon is turning the guide upside-down, as has almost every landlord. The guideline used to be phrased as the rent should not cost more than about 7-10 days of the typical salary for the typical tenant of the neighborhood. Otherwise, the rent could become disconnected to the wages that pay rents and lead to cost-burdened tenants, defined as tenants paying more than 30% of their income as rent. Currently in the US, 50% of tenants are cost burdened, and 50% of those cost-burdened tenants are paying more than 50% of their income for rent.

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