Tenant Screening

11 Replies

Hi, I need to have a formal application and tenant screening resource.  I saw the tenant screening service recommended by BP - SmartMove.  I don't think it will work for me.  My properties are located in Dayton, OH and my 1 BDRM units rent for $375.  SmartMove won't work because most of my tenants make $8/hr - $12/hr and are not internet users.  I need a written application that I can submit for a low fee.  In the past I would just review their background for free on local court websites.  I required a photocopy of photo ID to verify their info.  I also required photocopies of paystubs to verify monthly income is 3x monthly rent.  I still feel like that strategy fits my marketplace, but I am worried about the legalities of tenant screening.  What is appropriate?

@John Kallas  You're on the right track. I have some low rent properties in Dayton too. Documentable income is the largest success factor, followed by court records, mostly for evictions.

I've been using Nation Tenant Network, NTNonline.com to do basic checks. That gives me credit & evictions for <$30, and saves me the trouble of hitting every municipal and county court. The credit report does a good job of giving me past addresses, they may or may not have reported. They do not verify income sources, I do that myself.

Thanks.  I have heard of them.  I will check them out.  I already review (local) public court records to check for evictions, although this is not as thorough as NTN doing a nationwide search.  I do feel like my market dictates that I take tenants with undesireable history and for the most part I have been successfull doing that.  Other people would not do this, but they are in better areas.  I have applied a 4 yr eviction and drug/violent crime period requirement.  But I think I need to write this down and be more firm.  I also will not sign a lease until utilities are transferred over.  This stopped one applicant this week.  "It was his girlfriends fault that he was living with."  My method is not perfect, but for the large part it has worked and I have had great occupancy doing that.  However, I am concerned I need to improve.

I rejected a woman applicant yesterday.  She called me on the phone and introduced herself.  She wanted me to know that she did not have kids or a boyfriend.  I like that scenario a lot, but I was very alarmed that she thought to tell me that.  I found that she had criminal history and evictions, but they were approx 10 years ago.  What I didn't like is that she had escrowed the rent on her landlord in 2012.  I met her at the apt and she explained that the landlord had refused to resolve a leaking roof.  I thought that was understandable.  When I met her, she walked around my apt with a chip on her shoulder.  She told me everything that was wrong (freshly remodeled, new everything except tub).  She had the personality where she wanted to be in control.  She told me that I wouldn't have any problems as long as my maintenance is up to par.  She told me that the dinette wood floor needed to be cleaned and that the tub needed work.  She then asked for the application which I thought was strange!  I said I didn't had one and that I had already checked her background on public record - the truth.  She really reacted to that and wanted to know how I approve people.  This was another flag.  I also said that I didn't think things would work out.  I told her the wood floor was just stripped and refinished and that it was what it was.  My opinion was that she would cause me a lot of trouble and that she expects a $700 unit for $375.  There is a small water stain on the wood floor, but it is in fine condition.  I told her that I didn't see a reason to go forward if she was already unhappy with the unit.  I believe that it is a very nice unit for the market.  She was shocked.  I know that I made the right decision, but that whole interaction scared me.  Everything about it.  I need to get my act together and have written criteria and post it on the refrigerator and stick to it.  I will check out NTN.  Thx.

I use AAA screening so the tenants don't need to do anything online.

You hand them the paper, they fill it out and you email it in. Takes about an hour to get the report back.

Another one recommended to me is http://www.screenthetenant.com/

Gentleman also helps potential buyers with credit issues get their credit cleaned up and assists with their loan applications with lenders he works with. Hope this helps.

@John Kallas  

I just switched from a screening service someone mentioned above to NTN once I figured out NTN caught more stuff than the other (an applicant last year gave me an NTN someone else pulled on her and I pulled the other, NTN had more info).

That woman you met with sounded like a definite PITA!!

As far as legalities go, you need to have a written criteria and stick to it. Have a clause that says, "No one who has demonstrated combative or argumentative behavior will be approved".  To lower your chances of being sued, try to be as nice as you possibly humanly can when you reject them. You don't want to piss them off so they run to a lawyer out of revenge. 

I *always* look up potential tenants on the online county lawsuit databases because I always find more info that way than any screening company I have tried has. I only do this after I have a paid for application since there are way to many tire kickers in my area.  If I find that an applicant is fighting with everyone, getting sued and suing people, getting pulled over multiple times for DUIs, not having insurance, etc., I seriously doubt they are going to get follow my rules about written approval to modify the residence or honor my pet or smoking policy.

In this case with this lady you just denied, that's a tricky one.  When she asked for the application I would have responded that although I really appreciate her feedback, that I would not be changing anything with the tub or floor or lowering the rent.  If she fights with you about it, there you have your combative and argumentative behavior. But I wouldn't deny her right on the spot.  If she still applied and didn't fill out the application completely and called to inquire later, assuming your application says it needs to be completely filled out to be processed, if it wasn't let her know that it wasn't and that's why you didn't process it and offer to refund her app fee. Or that she lied on the app (if she did), that you found contrary information online/via screening, and that that is an automatic denial (good reason to not upfront let her know what you know via the online records). Make sure you issue the required denial letter. 

I appreciate the advice Kim!  Yeah, I did not like her domineering attitude.  I had a tenant like her about 2 yrs ago and I suggested to that tenant that we mutually agree to part company.  Thankfully, she did!  I don't ever want to go through that again.  I don't bully my tenants, but I refuse to accept the reverse scenario too.  I registered for NTN a few hours ago.  My wife and I just wrote up a criteria for tenant screening.  I like your idea about "argumentative or combative behavior".

I am not a lawyer:-)

Your screening procedures seem to be good. There are two laws you need to keep in mind when screening tenants: Fair Housing and Fair Credit Reporting Act.

You still need an application and tenant permission, but if you are checking the court records directly you actually have less responsibility under the FCRA then you would if you ran through a screener.

In terms of credit, there are plenty of companies out there who you can work with to get access to tenant credit reports. Just keep in mind that getting full access to reports will require a site inspection.

In terms of NTN, if you're happy with them, then you should use them :-)

Thanks all!  I am now a subscriber of NTN and have an application.

Hello @John Kallas, I'm Sandy from Brooklyn, a Lic. RE professional. I wanted to commend you for being a realistic landlord in your market place. I work for a company that does comprehensive back ground checks (search: On-Site). In NYC, tenants who are in Housing Court are immediately "black listed". I personally don't agree to this because hearing it from Tenants, they have been blacklisted due to a management company's mistake in filing. Most of the landlords automatically deny the tenant if they financially qualify and are credit worthy.

After finding out what you are comfortable with in terms of what to allow and deny, I definitely encourage you to keep it up, even if at times, it looks as if no one will qualify. You will luck out in the end finding a qualified tenants, and at least feel good that you have integrity.

Additionally, ask for landlord references. Some tenants may have bad credit, but always make rent a priority! Best, Sandy.

Hi @John Kallas  , glad you found a good tenant screening company and application. 

I want to second what @Kimberly H.  said about written criteria. The BEST protection agains a lawsuit or frivolous claim is detailed, written criteria which you should prepare ahead of time, and apply equally to ALL applicants. 

I also find written criteria to be a great pre-screening tool. I share the details of my criteria on the first phone call, and many people opt-out of a showing once they know the expectations for a tenant. 

Good luck, and keep us posted. 

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