Tenant Qualifications: What to Allow and What Not to Allow

by | BiggerPockets.com

Let’s talk about tenant qualifications. What criteria should applicants be required to meet in order to be approved? Is there any room for leniency? What are some deal breakers?

First of all, for any self-managing rental property owners, I strongly suggest that you hire a property manager. (Why? That’s a topic for another day.)

And to everyone who currently utilizes a property management service, I want to share something with you that is pretty important. As much as you expect rules and policies from your management company, I encourage flexibility and adaptability when it comes to tenant screening.

At my company, we consider tenants on a situational basis. I think this strategy injects a personal touch into managing properties and evaluating prospective renters.

That being said, here are some tips that even self-managing property owners could implement when pre-qualifying a tenant.

What to Consider When Screening Tenants

What Are the Most Important Things to Look for When Screening Potential Tenants?

  1. Income Verification: Make sure that the tenant is making at least three times the amount of the monthly rent. That way, he or she will (theoretically) still have sufficient funds to cover their monthly payment even if circumstances interrupt their monthly budget (i.e., unexpected expenses, loss of employment, etc.).
    Ask for proof of income, call their employer to make sure they are indeed employed, and double-check that they are getting paid what it says on their pay stub. I’ve had tenants lie before, fraudulently providing inaccurate numbers. So, it’s important that you pick up the phone and make that call.
  2. Eviction History: In my opinion, you probably don’t want to be putting anyone in your property that has an eviction on their record. However, sometimes I’m willing to bend on this and dig in deeper to understand the circumstances of the eviction—especially if the potential tenant tells us that it was a mistake. Maybe they actually gave the landlord notice, or maybe they vacated the property but the landlord went ahead and proceeded with the eviction anyway.
    Believe it or not, there are many instances where a prospective tenant has been unjustly evicted even though they gave enough notice to that specific landlord. Therefore, I’m often willing to listen to the story and approve tenants that have been unjustifiably evicted.
  3. Criminal Background: Check to see if the applicant has any criminal activity on their record, particularly something that took place in recent years. And major criminal activity that occurred at any point in their lifetime is usually a deal breaker.

Related: Tenant Screening: The Ultimate Guide

What Factors Are Less Important?

  1. Credit Score: This is something I really don’t take into consideration as much. I’ve found a less than optimal credit score isn’t the end of the world—as long as the person’s income verification checks out.
    My reasoning is somewhat personal. I’ve run various successful companies that have earned huge amounts of revenue, but my credit score isn’t the greatest. Why? I didn’t begin building it up when I was 18; I didn’t have credit for a long time. The algorithm that determines credit scores (and the whole credit system, for that matter) is a bit weird to me.
    Of course, when someone has a great credit score, that’s wonderful. But it’s not something I necessarily focus on.
  2. Criminal Background: Yes, I already touched on this. But similar to one’s eviction history, I think it’s important to consider applicants’ records on a case-by-case basis. I want to understand their story better. I’ve approved folks that had a dent in their criminal history, especially if it was 10, 15, or 20 years old.
    Of course, looking past someone’s record is heavily dependent on their specific legal troubles. I’ll read court documents, if they’re available, to fully try to understand what was going on and why it happened. We all make mistakes—some people are never even caught for theirs. So, I’m definitely willing to work with people.

To be sure, it’s ok if you have a property manager that’s cut and dry when it comes to tenant screening criteria. Some have procedures and policies in place where if an applicant doesn’t meet these parameters, they’re out. It’s similar to traditional lenders.

I, on the other hand, like being more flexible and adapting to the circumstances. Also, sometimes money talks.

Here’s a scenario: say, someone wants to rent your property, but they have a 17-year-old DUI on their record. They’re willing to pay a year’s worth of rent in advance. What would you do?

You have to weigh your options. As a landlord or property management company, you have the authority to approve or disapprove based on your own policy. Just make sure to investigate thoroughly and avoid making any rash decisions.

What are things that you are willing to bend on when it comes to tenant qualifications? What are no-gos or red flags?

I’d love to hear from property managers and both beginner and experienced landlords. Please, comment below!

About Author

Engelo Rumora

Engelo Rumora, a.k.a.”the Real Estate Dingo,” quit school at the age of 14 and played professional soccer at the age of 18. From there, he began to invest in real estate. He now owns real estate all over the world and has bought, renovated, and sold over 500 properties. He runs runs Ohio Cashflow, a turnkey real estate investment company in the country (Inc 5000 2017 & 2018) and is currently in the process of launching a real estate brokerage called List’n Sell Realty. He is also known for giving houses away to people in need and his crazy videos on YouTube. His mission in life is to be remembered as someone that gave it his all and gave it all away.


  1. Costin I.

    The 17 year old DUI is old enough to be inconsequential. I’m more worried about what else they have and the reason why they want to pay rent ahead for a whole year – that could spell trouble later as they could do whatever in your property and you might have trouble evicting since you accepted rent for the whole period already. You better be clear on the landlord-tenant laws in your state and the obligations it creates to the landlord with the acceptance of rent. I would get the first and last month rent, plus a double deposit.

    • Engelo Rumora

      Thanks Costin,

      As you mentioned it all depends on the particular state.

      We are in Ohio and if someone offers us 6+ months of rent in advance, we will usually take it (Unless we uncover some serious past criminal activity).

      Not many folks can rub 2 pennies together in the Midwest so in our eyes someone that can comfortably afford to pay $4,000 – $5,000 in rent and in advance is doing mighty alright lol

      Much success

  2. margie kohlhaas

    These are all good points; however one thing to consider is establishing a base set of criteria for screening and apply it to all applicants equally. This will allow for a little bit of flexibility within the law. I’ve seen many lawsuits occur due to not treating people fairly and being overly flexible with one applicant but not flexible with another. It’s good to know your state laws on criminal history. Some states will only allow you to consider a certain number of years. I don’t bend on the income qualifications. If 3x the income isn’t available then they need a roommate or two.

    • Engelo Rumora

      Thanks Margie,

      How does the division of real estate prove that you are treating people indifferently?

      I mean wouldn’t a few disgruntled tenants need to get together and file a complaint jointly with proof?

      I’ve seen it all in real estate and believe something like that happening to be a long shot lol

      Thanks again

  3. Adam P

    Credit score does not matter, however credit report DOES. Focus on last 3-5 years and ensuring there is no pattern of late payments. I just rejected someone for a $200 collection. If they let $200 get to collections, in my tenant friendly market will they prioritize keeping an eviction off their record?

    Criminal history is important in multifamily. You need to consider the neighbors who are also your tenants. Always read details of criminal records, as I notice speeding tickets have started appearing on reports (which I don’t care about).

    I also look for 3x rent as income, but find credit reports much more important than income. I have seen $150k income earners with long credit reports full of collections. While I have inherited tenants who would never pass my income requirements, who pay rent on the 1st every month, never even slipping to the 2nd.

    I am not sure what markets you are invested in, but in all the markets I am in, evictions are expensive. There is zero chance a landlord in those markets pays hundreds to thousands of dollars to evict a tenant for not giving notice. Once the tenant is gone, you re-rent the apartment.

    Bankruptcy and eviction are the absolute no exceptions rules I have.

  4. Kyrstin Szewczyk

    I always put a credit score qualification but am willing to bend that based on circumstances, like you said. Such us some amazing tenants I have that always pay on time and really take care of the house but have awful credit because of difficulty paying medical bills for their son. When it’s life happening, and not recent poor decisions (as in, not establishing credit for a long time isn’t a great decision perhaps but you’ve since remedied it so shouldn’t be penalized for that), credit score alone shouldn’t matter.

    For evictions I’m also pretty strict but Adam, while I like your post I have to disagree (personally) with no exceptions to bankruptcy and eviction. If any landlord starts an eviction, even without fully going through with it, I believe it still goes on the record. Whatever the process I have heard of evictions that should have never ended up on the record but there’s no way for the tenant to get that off their record (I believe, if someone knows differently I’d love to hear).

    Bankruptcy is also interesting. Again if it’s due to poor recent life choices, sure that’s a disqualifier, but if it was six years ago due to an investment that went sideways or medical bills, why would that disqualify them?

    Interestingly, in Seattle you really can’t discriminate based on criminal history (with a couple exceptions). While I agree with you that I think this is an important one (both to discriminate on when legally allowed and to make sure you’ve thought through if what the charge is actually matters) you have to make sure it’s legal.

    I think overall for me the income requirement (of the combined household income…families or roommates) is the most important and then just making sure you’ve thought through any exceptions.
    And have a solid list of qualifications both to keep yourself focused on what you actually care about and to make sure you’re not being biased and ignoring good renters (just because they have 10 facial piercings and a tattoo sleeve doesn’t mean they’re going to be bad tenants).

  5. Katie Phan

    I would recommend having a set criteria but also consider exceptions on a case by case scenario if you could mitigate risk by offsetting it with something else. For instance, if their credit is weak because it’s due to shallow history and not because they don’t pay on time, then I’ll offset it with a higher security deposit. If they don’t don’t meet the income requirement but have lots of assets to support an emergency event, then that would be used as an offset. What I’ve learned as a prior underwriter are 2 important things. The borrower (in this case tenant) should meet 2 important criterias….1. The Ability to repay and the 2. Willingness to do so. Missing one of those is a no no.

    • Engelo Rumora

      Thanks Katie,

      I’ve always said that “money speaks every language” lol

      If someone can truly come to the table with some serious $$$ as a deposit or pay rent in advance, we will take a deeper look and see if we can make a deal happen.

      “Life” get’s in the way too often when it comes to tenants and paying rent on time so we like folks that can pay large amounts in advance and stay ahead with regularly monthly payments.

      Have a great day

  6. Katie Rogers

    I understand why landlords have latched onto the requirement that tenants make three times the rent. However, let’s consider where that number come from in the first place. In an influential real estate investing book published 1962, the guidance actually went like this: As part of due diligence, evaluate the demographics of the typical tenant in the location of the unit. The rent should be no more than one-third the typical tenant’s income,adjusted for size of unit. Landlords have turned the guidance upside down. The original guidance makes sense because its it tenant income that pays the rent. Pricing out good tenants is counter-productive, https://www.amazon.com/turned-into-million-estate-spare/dp/B0007F2P7E/ref=sr_1_5?s=books&ie=UTF8&qid=1549342990&sr=1-5&keywords=How+I+Turned+%241%2C000+into+One+Million+in+Real+Estate+in+My+Spare+Time

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