Screening a tenant who has no references

14 Replies

Hi guys, I just had an applicant for a rental unit who has owned his own home for the last 3 years and doesn't have any landlord references. Would I just fall back on the credit/background check? If he wasn't paying his mortgage on time it will show up on the credit report.

I do have alot of other applicants who have references. Would I be safer selecting one of these?

Thanks,
Greg

Are there rental references before he owned his home? Did you ask him why he is moving into a rental when he owns his home?

I have rented to lots of people that have no rental references: Sold home and moved into town, lived with their parents, lived with friends, etc. I just do the normal background and credit checks and skip the landlord check.

I have found that the credit report and background check is better than references anyways.  Some people with bad reputations actually lie on references and put a family member with a different last name as a previous landlord. Upon calling the "landlord", you find nothing but rave reviews, only to find otherwise too late.

I completely agree with @Daniel Mohnkern

Look at:

  • Length in Field of Employment
  • Rent to Income Ratio
  • Credit Score
  • Payment History
  • Criminal history

If they screen well on these ccategories, you should be just fine.

If things look iffy, get a double deposit or a co-signer.

If you can verify they really owned their home for the last three years, and their mortgage was reported on their report, that would be a plus.

But, I agree with  @Account Closed that there should be landlords before that.  If this person really went from Mom's house into his own house, well that doesn't provide any more references, so you'll have to do a little more digging.

One thing I used to do, is ask to see their driver's license to prove they are who they say they are.  While you do this, you write down the address on the license - now you have an address to check against the ones listed on their application.

Then, I would require a personal printed check for the application - and now I have another address.  Plus, I know the applicant has a bank account in good standing, if the check clears.

You'd be amazed at how many applications don't list those addresses.  You can deny them based solely on them not giving you correct info or for omitting info.  

If everything checks out, then I'd go by the credit report and employment history.  If you ask to see a pay stub, you can look at the year-to-date numbers, which will give you an idea of how long they've been working there. If they tell you they've been there 10 years, but their year-to-date shows 1 month's worth of earnings (and it's April), there's another inconsistency.

Also, always Google the business, and then call the HR Dept, never the number of their "supervisor" that they give you.  You can also Google that supervisor number they gave you, to see if it's just some guy's cell phone.

Account Closed

Thanks for sharing your experiences. I'll make sure I pay close attention to detail when I meet with the applicant.

I would do your standard background/credit check and then ask for employer references. 

everyone has a different opinion but I don't even ask for references! I have a lot of prior homeowners, etc. personally I look at credit/background and rent being more than 3x wages.

Not having landlord references, IF it's because they are/have been a homeowner themselves, is not a deal breaker for me. 

Some of my best tenants were homeowners for quite a while before they lost their home to foreclosure and began renting from me.  Other than the fact that they had bad credit (because they weren't making their mortgage payments), they otherwise had good jobs/income and everything else checked out.  They just bought at the wrong time (i.e. peak of the market) and had mortgage payments in some cases 2-3 times what I was charging for rent. 

I also think there's something to be said for someone who has owned a home before and knows what it's like to own/maintain one, as opposed to a lifelong renter who has been trained over the years to simply "call management" for ever little issue/repair that they think needs to be addressed.

I agree with @Kyle J. , and I currently have 2 good tenants that were homeowners with no previous landlord references. Both lost their houses to divorce, and one led to a foreclosure. Their employment was verified and their background checks were fine. So far, so good. 

However, when a 30something says they've always lived with mom, then I reconsider ;)

Great points everyone, thanks.

I like the approach of having applicants present something that mitigates their weakest. If they don't have references, then I would like to see them score high on my home inspection.

Home visits are a new part of my tenant screen process. If at all possible, I want to eyeball the place where my incoming tenant is moving out of - especially if they have bad credit or some sob story.

One guy withdrew his application - I don't think he wanted to go through my house visit - I'm grateful for missing a headache.

Another lady had divorce wreckage credit but a City councilperson as her reference. I accepted her - and don't regret it.

@Al Williamson ,  A house visit to prior residence??  That is something interesting I have never considered!  Good idea. I like it.

Originally posted by @Al Williamson :

I like the approach of having applicants present something that mitigates their weakest. If they don't have references, then I would like to see them score high on my home inspection.

Home visits are a new part of my tenant screen process. If at all possible, I want to eyeball the place where my incoming tenant is moving out of - especially if they have bad credit or some sob story.

I was thinking this exact thing while I was walking through an applicant yesterday. They mentioned their husky is shedding due to the spring warmup and they continuously have hair on their socks. I would love to see if that is representative of their overall cleanliness. I imagine a shedding husky would be difficult to constantly clean up after when it's shedding after winter so I give them some credit there but would still love to see how their place is kept.