How to Avoid the Top 5 Tenant Screening Mistakes

A whopping 66% of landlords do not screen tenants. This is the biggest mistake a landlord can make, as tenant screening is the key to finding tenants who care for your property and pay rent on time. The other 34% of landlords are screening their tenants, but most of them are still making these 5 common mistakes:

Ignoring Red Flags at the Property Showing

The first time you meet a prospective tenant at your property showing, you need to notice and remember red flags in order for the property showing to be meaningful to your tenant screening process.

It’s common for landlords to host open houses, where they meet several prospects. In this case, it’s difficult to notice red flags or remember who you met, which hurts your screening process.

In order to avoid this mistake, we recommend hosting individual property showings. After you meet the prospect and show him or her the property, be sure to write down notes to yourself so you can remember the following:

Manners: You want tenants who are polite and respectful. Did they show up on time and treat you with respect?

Neatness: A tenant’s appearance and belongings can tell you how well he or she will take care of your property.

Interest level: A tenant’s opinion of your property tells you about his or her’s interest level. You want a tenant who is highly interested in your property.

Not Asking the Right Rental Application Questions

Once you meet a tenant, the next step is to ask him or her to fill out a rental application. 

Good rental applications ask for the following criteria:

• Basic information: name, phone number, address
• Reason for moving
• Employment information: occupation and salary
• Employment reference: name and phone number
• Prior residence’s landlord information: name and phone number
• Lifestyle questions: do they own a pet or smoke?
• Ask about criminal history and prior evictions
• Signature verifying information is true

The goal of asking these pertinent questions is to gather information, but taking an applicant’s word for it is not enough. That’s why following up with references (prior landlords and work references) is key.

Not Following Up With Employment References

Landlords will often ask for baseline information, like where a tenant works and salary level. But it’s a mistake to not double check this information. Income level is what tells you if a tenant can afford your monthly rent price and will be able to make rent payments consistently. Asking for a copy of a monthly income statement is an effective way to verify income level. It’s also good to verify this over the phone with the tenant’s manager.

Furthermore, it’s important to verify longer term employment history. Assuming your tenant is not a recent graduate, he or she should be able to provide employment history from the past few years. It’s a red flag if your tenant switches jobs frequently or has gaps in his or her history.

Not Contacting Prior Landlords

The best way to predict tenant behavior is to ask a prior landlord. Contacting a tenant’s prior landlords gives you pertinent information. Be sure to ask the right questions:

• Did he or she pay rent on time?
• Was there ever an instance when he or she did not pay rent on time? If so, how many times and what was the reason?
• Did he or she damage your property?

After hearing the answers, you will have critical information to help you move forward with a decision.

Not Requiring a Credit and Background Check

A common tenant screening mistake is to not check if a tenant is financially responsible. After all, signing a lease with a tenant is a financial commitment.

The best way to avoid this mistake is to cover all of your bases by requiring a tenant credit check. A credit check tells you if the prospective tenant has outstanding debt, missing payments, or bad credit. What’s more, they also check for prior evictions. 

You can reject a tenant based on information from the credit check. We recommend having consistent standards: a credit score above 680 and no prior evictions.

A credit check is not enough on its own. You also need to require a tenant background check. Checking for criminal history is the best way to keep yourself and your community safe. Renting to a criminal is a huge liability risk. In the case of damage or injury, you will be liable for renting your unit to someone who put your community at risk.

Conclusion

The key to finding great tenants who pay rent on time and take care of your property is to stick to a consistent and thorough tenant screening process.

If you leave out important steps, then you might end up renting to a tenant that causes you headaches. Comprehensive tenant screening includes a property showing where you meet and get to know the tenant, a complete rental application, contacting employment references and prior landlords, and requiring a credit and background check.

It’s worth spending time on all aspects of tenant screening, so you don’t have to spend time worrying about a bad tenant.

Let us know in the comments below: what part of tenant screening do you find most important?