Flexible Tenant Selection Criteria?

9 Replies

I've got two vacancies coming up in the next two months and as of right now I don't have any formal written tenant screening criteria. My price range tends to attract a decent number of tenants with bad histories (crime, eviction, credit). However, I'm an optimist and I have found that some people may have made mistakes at some point (even in the recent past for some), but that doesn't meant they're bad people or can't pay their rent. For example, in one of my units I have two tenants with criminal records straight out of the halfway house who are without a doubt my best tenants. 

I'd like to develop written criteria that allows me to both reject, at my discretion, tenants with red flags, and accept on a case-by-case basis others who might have similar red flags but  after interviewing/checking with references might appear to be genuinely attempting to get their life back on track. What would be the best way to do this? Does anyone have any written selection criteria that allows this flexibility they'd be willing to share? Alternatively, has anyone gotten burned trying to do this kind of thing?

You should develop written screening criteria for your properties.

Here is a copy of our:

APPLICATION PROCESS/SCREENING CRITERIA

Thank you for applying with Liberty Management, Inc. CRMC for your housing needs.

In order to better serve you, we feel it is imperative that you are made aware of and fully understand our application process and screening criteria.

A copy of Landlord's Residential Lease Agreement and customary terms and provisions are available on our website at www.libertymgt.net for your review prior to submitting your application.

Property Condition:

- Applicant is strongly encouraged to view the Property prior to submitting any application. Landlord makes no express or implied warranties as to the Property's condition.

- Please list in the application any applicant request for landlord to consider regarding repairs or treatments should applicant and landlord enter into a lease.

(Quoted rents apply only to those who elect to use free online rent payment system a $10 processing fee will be added for any other methods of payment)

*Please have the following items ready before applying:

- Last 2 addresses and Landlord Information

- Employer and Previous Employer: Name, Contact, Start Date, Salary

- Dependant Information

- Emergency Contact Information

*Have the following documents ready toUPLOADwhen applying:

- 2 months of Paystubs or Income Verification

- Copy of Renters Insurance

- Pet Picture (if applicable)

- Current Vet Records (if applicable)

You may also email your documents to:[email protected]

Business Relationship

We are licensed real estate agents in the state of Texas and we represent the Owner. The relationship between a landlord and tenant is a business relationship. A courteous and businesslike attitude is required from both parties. We reserve the right to refuse rental to anyone who is verbally abusive, swears, is disrespectful, makes threats, has been drinking, is argumentative, or in general displays an attitude at the time of the showing or during the application process that causes management to believe we would not have a positive business relationship.

MUST READ!!!

Before going any further in applying for this home - there is a $60 application fee per adult to complete this application. Everyone that is going to occupy the property that is eighteen (18) years of age or older must fill out an application and submit a $60 non-refundable application fee.

We do not pre-screen Applications. Applicants are required to pre-screen themselves with the following criteria and will need to meet the requirements below. If you feel you meet these minimum requirements, you are encouraged to apply.

ONCE THE APPLICATION IS PROCESSED,THE $60 FEE ISNON-REFUNDABLE!

Application Process & Screening Criteria:Liberty Management, Inc. is committed to equal housing and we fully comply with the Federal Fair Housing Act (FFHA) and the Fair Credit Reporting Act (FCRA). We do not discriminate against persons because of race, color, religion, sex, handicap, familial status, national origin, age, sexual orientation, or gender identity. We also comply with all state and local fair housing laws. We offer application forms to everyone who requests one.

Approval is based on seven factors:

- Income Verification

- Employment Verification and History

- Rental Verification and History

- Credit History

- Criminal Background Check

- Terrorist Database Search

- Pet Criteria

Identification -

Each applicant is required to provide a copy of a legible Government issued photo I.D.

You will be prompted to upload Identification when applying.

Income Verification-Income should be at least three (3) times the monthly rent and verifiable from an unbiased source: i.e. - employer through pay stubs, tax returns, and/or bank statements. Self-employed income may also be verified with a CPA-prepared financial statement or tax returns. Your employment history should reflect at least 6 months with your current employer in San Antonio area. Transfers or relocations must have correspondence showing an accepted job offer. Any verification fees required by the employer must be paid by applicant. Applicants who do not meet the above employment or income requirements must submit Savings Account statements showing a minimum average balance equal to 8 months of rental payments, for the last 6 months.

Employment -We require verifiable employment history for at least the past three (3) years. You must be a permanent employee (not temporary or probationary). If you are self-employed, retired, or not employed, we can accept such documents as signed tax returns (2 years minimum), bank statements, etc. that provide proof of applicant’s ability to pay the rent. If military, we need a current copy of your LES. If you are active duty military, you must be on an assignment that, to the best of your knowledge, will allow you to complete an initial 12 month lease.

Residence History-We require verifiable residence history for at least three (3) years whether you currently own or rent.Applicants are responsible for providing information including the names, addresses and phone numbers, of Landlords with the dates of residence for the previous 3-5 years. Rental history must be verified from unbiased sources. (Cannot be from family or relatives)

Home ownership will be verified from a current credit report.

We accept base housing as rental history.

Any evictions within the previous 5 years will be automatic grounds for denial. Broken leases will be considered on a case-by-case basis and an additional security deposit may be required.

Credit History -We will obtain a copy of your credit report. You cannot provide this to us, we will obtain this ourselves. Credit history should show that the resident has paid bills on time and does not have a history of debt “write-offs” or accounts that have gone into collection. Money owed to a previous landlord or utility company is cause for denial. Residency may also be denied due to poor credit history. We do not accept co-signers.

Criminal, Sex Offense, and Terrorist Database Check -We will check these databases for all occupants over 18.

We do not rent to any person required to register as a sex offender. Criminal backgrounds involving violent crimes, prostitution, and domestic violence and/or involving the possession of weapons or illegal substances are all grounds for denial of an application.

An exception may be made for type and or age of offense, please provide details to the Property Manager.

Rental Criteria for Pets -Pet policies vary from one homeowner to another. Some owners do not permit pets, while others restrict type and/or size of pets. No more than two pets per household are permitted without specific owner's approval.

Property Insurance Companies do not allow certain particular Breeds, either purebred or mixed. Therefore, dogs fully or partially of the following breeds will be rejected:

Akita, American Bulldog, Bullmastiff, Mastiff, Chow, Doberman, German shepherd, Husky. Presa Canario, Pit Bull, Siberian Husky, Staffordshire Terrier, "Wolf Dog", Bull Terrier, Pit Bull Terrier, Rottweiler and any combination of these.

Tenants will be evicted for misrepresenting any of the above type of dog, as well as for being in possession of any poisonous, dangerous, endangered species or otherwise illegal pet. Our pet policies are strictly enforced, and any breach will be grounds for termination of your lease agreement at tenant's expense.

A $400 pet deposit is required for each pet.The Pet Deposit includes a $100 Non-Refundable Pet Fee.

Special consideration is given to “Service Animals” that assist a tenant with special medical needs. (Please provide proper documentation).

We require with your application, a picture of each pet that will be on the property.

Please have pictures of pets ready to upload when applying.

We may require you to bring the dog(s) to our office for approval.

No Aquariums larger than 10 Gallons allowed.

No ferrets, reptiles or rodents of any kind are permitted as pets. All birds must be confined in cages and not allowed to reside outside their cage.

NOTICE TO ALL APPLICANTS:

Quoted rents apply only to tenants that elect to use our online tenant payment system from their checking or savings account. A $10.00 processing fee will be charged for each payment received either in person or by mail or by any other method.

NO SMOKING:Smoking is not permitted inside the home or garage.

Applicant or an appointed representative named by letter must physically view the property prior to submitting the application for rental. The representative must be someone other than the showing agent.

While we make every effort to describe our rental properties accurately, changes can and do take place. Tenants should verify schools, pets, features, etc. Listings do not constitute a guarantee of the facts stated.

You should personally inspect the property before signing the lease agreement!

School enrollmentconcerns should be investigated prior to submitting your application. Please verify the school information with the school district, enrollments get capped and designation boundaries may change.

Applicants should satisfy their concerns regarding crime statistics or the presence of any sex offenders in the area, before submitting an application. This information is available free of charge on the internet at the following sites:

Sex Offenders: www.txdps.state.tx.us

San Antonio Area Crime Stats:http://www.neighborhoodscout.com/tx/san-antonio/crime/

REASONS FOR DENIAL OF APPLICATIONS

If you failed to give proper notice when vacating a property.

If previous landlord(s) would be unwilling to rent to you again for reasons pertaining to your behavior or that of any family member, guest (welcome or not), your pets, or any animal on the property during your tenancy.

If you have had three or more late payments of rent within the last 12 months.

If you have an unpaid collection filed against you by a Property Management Company.

If an unlawful detainer action or eviction has occurred within the past five (5) years.

If you have recently received 3-day notice to vacate.

If you have had two (2) or more NSF checks within the last 12 months

If you have filed for bankruptcy or foreclosure within the past 24 months we may deny your application.

Any bankruptcy must have been discharged at least one year previous to the date of your application.

If you have allowed any person(s), not on the lease, to reside on the premises.

If we are unable to verify your information, we must deny the application.

No Businesses may be operated from the property. If you have a home based Business that you think we might approve please let the Property Manager know.

**If misrepresentations are found after the lease agreement is signed, the lease agreement will be terminated.

Disabled Accessibility concerns: Should be submitted in writing to the property manager. We must obtain Owner approval to allow modification of the premises. All modifications are at the expense of the disabled person, and the disabled person must agree to restore the premises, at their own expense to the pre-modified condition (provided the modification would affect the use and enjoyment of the premises for future residents).

We require:

Written proposals detailing the extent of the work to be done.

Written assurances that the work is to be performed in a professional manner by a licensed/bonded contractor.

Written approval from the landlord before modifications is made.

Appropriate building permits and required licenses made available for the landlord's inspection.

A restoration deposit may be required per Fair Housing guidelines.

Start of Lease Agreement:

No rental property will be held vacant for more than two (2) weeks, unless approved by Liberty Management, Inc.

Residents moving in before the 20th of the month pay prorated rent for that month, for residents moving in on the 20th or after they will need to pay the prorated rent and next month’s rent at move-in.

Vacant Homes --- Liberty Management has a policy that all leases will begin within 14 days of application approval or Availability date whichever is later. We are unable to hold the home rent free without a lease agreement longer than that time. Rent will be charged beginning on the 15th day.

Occupied Homes --- Liberty Management will typically advertise an availability date with the properties we manage based on the representation of the occupant. In some cases, those dates will need to change due to circumstances beyond our control. We ask the approved incoming tenant to be flexible in these cases. We understand the burden this can create and strive to advertise a solid date so incoming tenants can plan accordingly.

Upon Approval:

Once you are approved you will be notified by phone and or email. Applicants have 24 hours to pay the Application Deposit in order to secure the home off the market on your behalf.

If we do not receive your Application Deposit within 24 hours of approval, Liberty Management, Inc. will withdraw your approval and process the next application received, and or consider any other applications.

Once the Application Deposit is paid Liberty Management will remove the property from the market and will not lease the Property to another person.

You and any co-applicant may not withdraw your application or the application deposit. If you or any co-applicant withdraws an Application or notifies us that you've changed your mind about renting the dwelling unit, a $250.00 Administrative Fee, AND a daily rate of the proposed rent calculated from the date the application was submitted shall be forfeited to Liberty Management, Inc. and/or Landlord from the Application Deposit. The number of days will begin with the date of the application submittal and end on the date of the termination notice.

Once the lease agreement is signed the Application Deposit will be credited to the Security Deposit in the lease agreement.

What some of our tenants would like you to know before you apply:

1. Liberty Management routinely conducts two periodic inspection surveys or more as needed of the property with interior pictures and send the reports to the owner.

If this is going be a problem for you please do not apply for one of our properties.

2. The lease agreement gives Liberty Management authorization to place a keybox on the property and to market and show the property for rent last 30 days of the lease agreement. If this is going be a problem for you please do not apply for one of our properties.

Have the Following Documents Ready to Upload When Applying:

Government issued photo I.D.

Proof of Income - pay stubs, bank statements, etc.

Picture of each pet that will occupy property (if applicable)

Failure to upload or email these documents will delay the processing of your application

If you have trouble uploading documents please email documents to:

[email protected]

Acknowledgement and Representation:

The following Application Agreement will be signed by all applicants prior to signing a lease contract. While some of the information required may not yet be applicable to your situation, there are some provisions that may become applicable prior to signing a lease contract. In order to continue with this online application, you'll need to review the Application Agreement carefully and acknowledge that you accept its terms.

1) Signing this application (electronic or otherwise) indicates that applicant has had the opportunity to review landlords tenant selection criteria, which is listed above and available upon request. The Tenant selection criteria may include factors such as criminal history, credit history, current income and rental history.

2) Applicant understand that providing inaccurate or incomplete information is grounds for rejection of this application and forfeiture of any application fee and may be grounds to declare applicant in breach of any lease the applicant may sign.

3) Applicant represents that the statements made in this application are true and complete.

@Account Closed  Wow thanks for the very thorough response! Do you provide this to every tenant with the application?

Yes it is part of our online application process and tenants have to acknowledge it before they can move on with the application.

Hm, I might have to try something like that. Though I've had a hard time convincing my current tenants to even pay online vs cash/money order so maybe my target market just isn't as internet savvy. 

Actually, I found the below link on BP that will definitely get you started as well.

http://www.biggerpockets.com/renewsblog/2008/02/09/managing-tenants-part-three-written-criteria-for-tenant-selection/

The above information looks good.  Maybe it's just me, but in my experience most prospective applicants don't read 90% of what is posted in the criteria.  So, I post ads with the criteria contained.  When they contact me I text/email them just the criteria.  Most the time they claim they never saw it.  They see a price and pictures. Just my experience though. 

Originally posted by @Brendan Morin :

I've got two vacancies coming up in the next two months and as of right now I don't have any formal written tenant screening criteria. My price range tends to attract a decent number of tenants with bad histories (crime, eviction, credit). However, I'm an optimist and I have found that some people may have made mistakes at some point (even in the recent past for some), but that doesn't meant they're bad people or can't pay their rent. For example, in one of my units I have two tenants with criminal records straight out of the halfway house who are without a doubt my best tenants. 

I'd like to develop written criteria that allows me to both reject, at my discretion, tenants with red flags, and accept on a case-by-case basis others who might have similar red flags but  after interviewing/checking with references might appear to be genuinely attempting to get their life back on track. What would be the best way to do this? Does anyone have any written selection criteria that allows this flexibility they'd be willing to share? Alternatively, has anyone gotten burned trying to do this kind of thing?

 I would like to strongly suggest that you donate to charities, rather than become one.  Unless you can afford to gamble on iffy applicants.

Unless you absolutely can't find good tenants for your rental, and absolutely have no other choice but to accept sub-par tenants, don't do it.

That said, you can add something like, "a combination of criteria may be considered on a case by case basis."

But, any time you deviate from your criteria, you open yourself up for a potential fair housing complaint.  If your criteria is rock solid, then it is color, sex, familial status, etc. - blind.  If your criteria is not rock solid, and you bend the rules for one person, then how do you justify not bending the rules for someone else?  And what if the next someone else happens to be in a protected class?  And now the question is, why did you allow that guy, but not this protected class?

It's just not worth it.

I now rent in subsidized senor housing, and I found that many of them will accept certain crimes, but they are included in a very detailed list of what types of crimes will be acceptable, and how long ago they must have happened.

One thing that is subjective, though, is credit.  You can appeal their credit decisions, normally, with an explanation of why your bad debt is over the ceiling they normally allow, etc.  

But really, it's not your job to be a halfway house.  I highly encourage you to donate to your local half-way house, but rent to well-qualified tenants.  That is, if you intend to run a business as opposed to a charity.

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