Tenant Screening Question

10 Replies

Hi Guys,

I am screening tenants now for one of my rental units, and as a fairly new landlord, I have a few questions.

1) SPOUSE NOT ON LEASE: Someone called me recently and said they are interested in the unit, but he wanted to know if his wife had to be on the lease. I said that anyone over age 18 is required to be on the lease. He said that he and his wife recently got married, and his wife has a prior eviction on her record--but it was not her fault. The wife was living with her mom and was required to be on the lease because she was over 18, but her mom defaulted and held her responsible even though it wasn't her fault. I said that I am sorry, but everyone over age 18 is required to be on the lease per our policy, and that we also decline for any evictions within the last 10 years. Does this sound reasonable? Should I have considered this any more? Would would some of the more experienced landlords do?

2) CHILDREN ON LEASE: When it comes to children, should I indeed require EVERYONE over age 18 to be on the lease? What if there are 2 parents and 2 kids (say age 12 and age 18 for example). Even if the kid is a senior in high school, should I still require him to be on the lease? What should I do regarding children over age 18?

3) INCOME REQUIREMENT: I have two applicants who have extremely good credit scores (800+) and all the references check out, etc. However, they aren't able to show proof for 3X the monthly income compared to asking rent. The husband has verifiable income, but the wife is a substitute teacher. Income is pretty regular, but isn't guaranteed. The same goes for waitresses, hairstylists, etc. What do you do for people with these professions where there is no guaranteed income, but you believe they can afford the rent? Require previous tax returns?

Any help would be appreciated, thanks!

Great questions!

1) Spouse not on lease: For us, any applicant who tries to negotiate any changes to the lease or rent is no longer in the running as a tenant. This would only be the beginning of this tenant taking advantage of you. Next, they'll paint the house without your permission, and demand that you pay them for the paint. They'll have one of his buddies living in the garage because you don't require that everyone is on the lease. What if the wife damages the property and refuses to pay the damages? You would have no recourse because you have no contract with her. Run from this applicant. Fast. 

2) Children on lease: Our lease requires that they list the minors living in the house. You need record of that only so they don't take in their cousin's daughter. Then their niece. Then their neice's friend who's parents are mean to her. Etc- next thing you know, your two bedroom apartment has eight kids living there, writing on your walls and dropping cheerios down the vents. Yes- if the "kid" is 18, he's on the lease. He's a legal adult and living in your property, for which you are liable. Protect yourself at every turn. 

3) Income requirement: I'm actually much more flexible on this one. If the income is close, but I get really good vibes from the tenant, they have good credit and good references, I am okay with that. I put a lot of stock in their references, especially from previous landlords. I woudln't ask for tax returns, just make sure you have a very thorough application so that you have all of the info you need if things go south. 

Good luck out there!

Hi @Corby Goade , thanks for your feedback! Glad to confirm my thoughts.

How far would you go with the screening of the 18 year old "kid"? Would you require a separate rental application, background, eviction, and credit check with references, etc?

If you can get someone that fits your lease requirements perfectly, always go for that. 

If you have multiple applicants and NONE of them meet the requirements you may be forced to make concessions. You have to decide what you're comfortable with doing. 

There is an element to knowing people here. Managing expectations and setting expectations. 

For instance, I have a tenant in my property now who I did no credit or background check on, and they gave me no security deposit. almost everyone one the forum would say this is an absolute DEAL KILLER, and I would always agree with them....yet I did it, and I doubt I'll ever get a better tenant in my career (seriously, they are a dream). I'm not saying you should do this, but understand that not everyone will always fit into your rental requirements. When this happens, you have to use your ability to deal with people, and salesmanship (for lack of better term) to pick up the slack and create a good tenant dynamic.

TLDR: boot all tenants that don't fit your requirements until you can't afford not to, then adapt and overcome. 

If you're worried about whether they will be able to pay, have them bring copies of bank statements so you can see both their balances AND whether they're paying their rent on time. Just make sure they aren't trying to jump from renting something at 1,000/mo to something for 1,500/mo.

Other than that, there's not much more you can do. Having good credit is a good sign. But at some point, there's a reason why that 3x rule is in place. If you're not making at least 3x the rent in gross salary, there isn't going to be much of a cushion at all.

On the other hand, if the issue is just that they simply don't have enough guaranteed income to meet that 3x times rule but more than likely are making more (i.e. due to the wife's substitute teaching income not counting), then thats another story. Tax return should give you an idea of how much they make.

I will add this though.

The two worst professions for tenants I've had over the years have been nurses and truck drivers. Nurses is always the surprise. But there are some nurses that have very stable jobs. And there are a lot that are contracted out, or work for some lab or service or something and their hours can get cut pretty quick.  Truck drivers is just so cyclical and the weather affects their income here in illinois as well.

But 800 is an incredible score. Chances are they know it too and they're going to make sure they do everything in their power to keep it perfect.  I would probably make an exception for them if they actually had those scores and had some real good job history to boot.

RE: Evictions

Don't make any exceptions on the lease. But I might make an exception on the eviction. If she was truly living with her mom, then it wasn't really her responsibility to pay the rent. She was just a kid.

I'd check with the former landlord to verify the story though. Better yet, I'd ask to see some bank statements from her and see how she manages her money. You'll know right away if she's good with money and bills or not......

I still don't like the idea of making an exception on the evictions just in case she's not being completely honest about the situation. How old was she when was there? 19? 20? Then I'd buy it. If she was 27, 28, etc, then I'd pass. She was responsible for paying and chose not to.

Thanks guys!

Hey @Craig S. - I wouldn't screen the 18 y/o as I would the parents. He isn't responsible for paying any of the rent (presumably) so I wouldn't hold him to those same standards. I'd ask him to fill out the same application that the parents did and list him as an adult on the lease. If nothing else, you have his info if you need it and could be a good reference for him when he wants to rent his own place.

Spouse on the lease: Everybody is required to be on the lease, and everyone over 18 I run their credit and do a background check. It might sound unusual but it's the business.

Evictions: That's tough. My gut feeling says that I wouldn't pick them, automatic denial. But... it'd depend on the vibe I get from them and how much of their story I can verify.

Children on the lease: On our lease everyone everyone living at the property is required to be on the lease. That might be a local thing since there are occupancy laws here that stipulate how many people live in a unit which requires us to include everyone on the lease. 

Income requirement: I'd make sure I can verify their income and that they have a cushion as well, especially in the summer months since she's a sub teacher.

Best of luck!

#1: At least he is honest upfront. I would screen the spouse and analyse her reports and eviction records. If the records was sometime ago and her mom's fault, I would just put her on the lease. See how bad the record is, take a higher security deposit. Make sure they have really high income to offset this "dent" in her report. 

#2: I would say the parents should be enough.

#3: probably ask for higher deposit. Ask them for either tax return or bank statement.

I list ALL OCCUPANTS on the lease.  Including a 6 month old kid.  Only the financially responsible people have to sign.

I screen all 18+, and require a decent credit score from EVERYONE 18+.

Someone with a 800+ credit score will go without food in order to keep their good score.  They also do not lie.  They tell creditors they will pay, and they do pay.

Originally posted by @Eric D. :

I list ALL OCCUPANTS on the lease.  Including a 6 month old kid.  Only the financially responsible people have to sign.

I screen all 18+, and require a decent credit score from EVERYONE 18+.

Someone with a 800+ credit score will go without food in order to keep their good score.  They also do not lie.  They tell creditors they will pay, and they do pay.

 This is what I do as well. Anyone who lives in the house is listed on the lease; this way, there can be no ambivalence such as "Oh, I thought it would be OK if my nephew came to live here". Only the person that wants to be financially responsible for the lease has to sign. I wouldn't care if someone living there had been evicted, so long as they weren't one of the financial guarantors of the lease. And I agree re: credit score. A very high credit score reflects a level of personal responsibility that makes it unlikely they would stiff you on payment. 

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