Tenant screening questions

21 Replies

Hi folks - got a few tenant screening questions to add to the dozens of similarly-titled threads:

For context, these units are C+ in a working-class neighborhood, and rent for between $650 and $750/mo.

(1)  Tenant is a bartender, so their pay stub is not reflective of their true income.  How would you vet this?

(2)  Tenant has a felony from 2007 for drug conspiracy charges.  His probation officer has to approve his apartment before he moves.  If everything else doesn't throw up any red flags, would you rent to this person?

(3)  This last one comes with a backstory - enjoy!

Woman named "Joan" calls and asks if I take section 8.  I tell her yes, but this particular unit is not approved (i.e. I inherited some section 8, and would like to do away with them through attrition).  She begs and pleads, but I tell her "no."  Another woman calls the next day, claiming to be "Joan's" daughter, whose name also happens to be "Joan."  She lives out of state and is looking to relocate back to the area.  Her mother recommended she call me because my unit sounded nice.  She is sending her husband (who lives locally) and her mother (the section 8 caller) to inspect the apartment.

Being the perpetual cynic, my antennae are up for a bait-and-switch with the younger couple qualifying for the apartment, but then the mom moves in.

Another part of the plot: that property (but not that unit) has a section 8 tenant, so the housing authority has me and the property in their system.  I am just trying to avoid getting stuck with a situation where I am duped into allowing a section 8 tenant move in.

I will go through the necessary due diligence for background checks, but that won't prevent the aforementioned situation.  As they say, "possession is 9/10th of the law."  or, more appropriately 9/10th of the cost.

It could be a total coincidence and I am just freaking myself out.  Any advice/tips/tricks to avoid a switcheroo?

1. Copies of bank statements showing deposits from the last X months (6, 12, whatever makes you comfortable). If the guy says he's a cash-in-hand guy only, I wouldn't do it.

2. That's almost 9 years ago. How long has he been out of jail? What was the nature of the drug conspiracy charges? How long has he been employed in his current position.

3. Ideas: Get photo ID copies of everyone. Make sure lease reads in the name of the person that is on the ID. Be specific in the lease wording (i.e. "Joan Smith, daughter, 35 not to be confused with Joan Smith, mother, 55, hereby known as "Tenant"). Have daughter initial everything. Put everyone's name on the lease as financially responsible for payment - daughter, mother, husband. Tell daughter she and husband have to be physically present to sign the lease, with ID's in hand. 

In other words, take no shortcuts. If they balk at signing something that is only protecting you, walk away. 

Also, if others call to ask if you take Section 8, I would just say no, because you're intending to do away with the program anyway.

(1) A portion of income is wage and the other portion is stated. The stated income should still be taxed. You can request a copy of the applicant's tax return to see how much income was claimed. You can also call the employer to verify the stated portion of income.

(2) This one is a bit trickier and really depends on your goals for the property. You should set a screening criteria and apply it equally to all applicants. I wouldn't recommend a criteria that approves felons if this was an A property. Since it's a C+ property you may want to lower criteria to accept former felons with a recommendation from the probation officer. Avoid discrimination lawsuits by equally applying the same criteria to all prospects.

(3) Make sure your lease is very detailed regarding unauthorized occupants. If the younger couple qualifies, it's their reputation on the line. Be ready to evict as soon as you notice a violation of the lease.

@JD Martin

(1)  Roger that.  Good idea.

(2)  Not sure on the nature of the charge - they just said "distribution" in our only phone call.  Not sure how long they are at their current job, but they are relocating and taking a new job in this area.  It's not a good job (fast food chain), but their spouse has another income (blue collar) as well.

(3)  What if they sign everything as planned, but then move the mother in?  Okay, they are in violation of the lease, but I still need to go through the eviction process, no? Or does the mother not have "legal cause" to occupy the property (addressed in lease: Only those persons whose names appear on the lease may occupy your apartment without our prior written consent except guests for no more than 7 consecutive or 14 total days.), so could I just have her arrested for trespassing?

@Carlos Enriquez

I was told by an attorney that I could be accused of discrimination if I advertised "no section 8" (found a similar thread on BP saying the same), but to just say "the unit was not approved" because, as I understand, I can't refuse someone who is Section 8 just because they are Section 8 if they have the income to qualify.  It's legal semantics that I, admittedly, still don't fully understand.

@Alex Hamilton

All poiints you made is great food for thought - Thank you!

@Wesley W. You should check your local laws and see what is required regarding section 8.  I know in Maryland, DC and Massachusetts you do not actually have a say in the matter. You have to accept it. Maryland & DC both have source of funds as a fair housing protected class. 

So do be very careful what you say to a potential section 8 tenant.  I am not familiar with NY law, but I would be very surprised in such a tenant friendly place that you could deny someone that is section 8.

Russell Brazil, Real Estate Agent in Maryland (#648402), Virginia (#0225219736), District of Columbia (#SP98375353), and Massachusetts (#9​0​5​2​3​4​6)
301-893-4635

@Wesley Williams There's a lot to Tenant Screening, I'd check with your local REIA and an Eviction Attorney.

Wesley, as Russell mentioned, its illegal in Massachusetts to say No and having it not approved is not a valid reason.  It may help you dissuade perspective section 8 folks with that reply. Check your local laws!

Because I am in Massachusetts, I just thought it was nation wide to illegally say No to section8.....is that not the case and in other states you can actually just say No ?

wah, wah !   lol

Originally posted by @Rich N. :

Wesley, as Russell mentioned, its illegal in Massachusetts to say No and having it not approved is not a valid reason.  It may help you dissuade perspective section 8 folks with that reply. Check your local laws!

Because I am in Massachusetts, I just thought it was nation wide to illegally say No to section8.....is that not the case and in other states you can actually just say No ?

wah, wah !   lol

 I don't know about other states, but in TN you have to actually sign up to have your place inspected and approved for section 8 before anyone can use it in your place, so if you don't sign up you can't take it - and no one can force you to sign up or take vouchers.

It's the same in Virginia, no one can make you take Section 8. And from what I understand, this approach is the norm in the vast majority of the United States.  

I do think Section 8 is a really good deal though, for investors that want to minimize turnover in Class C units.  I used to work in affordable housing (multifamily) and it didn't really deserve the bad rap it had in some areas....  Now, I didn't do a lot of Section 8 work, I mostly worked in Section 42, which is Low Income Housing Tax Credit properties, but overall the investors I worked with loved the program and the stability/ lack of turnover in many cases. 

Elizabeth Nourse, Real Estate Agent in VA (#0225189203)
Great info here, thanks everyone.
Originally posted by @Elizabeth Nourse

I do think Section 8 is a really good deal though, for investors that want to minimize turnover in Class C units.

 Not in my market.  The Housing Authority dictates the "max rent" you can charge based on the number of bedrooms which, in my experience, is much lower than market rents.  Then you have the annual inspections which, again, in my market I would say is bordering on abusive.  I got a violation notice for an escussion ring that was not caulked to the shower wall for the shower head pipe and loose veneer trim on the edge of a bathroom vanity door.  I had to fix it in 30 days or the rent would be withheld.  This is why I am not keen on Section 8.  It's costing me money (in the form of loss to lease) and time (ticky-tack inspection violations).

@Wesley W.

Very good point.  It does depend on if the rents are high or low compared to the overall market rate.  In our region, it is above in some areas and lower in others.  I've met a few investors over the years that specialized in this space, but they were always in local markets where the rent was at least equivalent to the market rate rent. 

Elizabeth Nourse, Real Estate Agent in VA (#0225189203)
Originally posted by @Wesley W. :

Hi folks - got a few tenant screening questions to add to the dozens of similarly-titled threads:

For context, these units are C+ in a working-class neighborhood, and rent for between $650 and $750/mo.

(1)  Tenant is a bartender, so their pay stub is not reflective of their true income.  How would you vet this?

(2)  Tenant has a felony from 2007 for drug conspiracy charges.  His probation officer has to approve his apartment before he moves.  If everything else doesn't throw up any red flags, would you rent to this person?

(3)  This last one comes with a backstory - enjoy!

Woman named "Joan" calls and asks if I take section 8.  I tell her yes, but this particular unit is not approved (i.e. I inherited some section 8, and would like to do away with them through attrition).  She begs and pleads, but I tell her "no."  Another woman calls the next day, claiming to be "Joan's" daughter, whose name also happens to be "Joan."  She lives out of state and is looking to relocate back to the area.  Her mother recommended she call me because my unit sounded nice.  She is sending her husband (who lives locally) and her mother (the section 8 caller) to inspect the apartment.

Being the perpetual cynic, my antennae are up for a bait-and-switch with the younger couple qualifying for the apartment, but then the mom moves in.

Another part of the plot: that property (but not that unit) has a section 8 tenant, so the housing authority has me and the property in their system.  I am just trying to avoid getting stuck with a situation where I am duped into allowing a section 8 tenant move in.

I will go through the necessary due diligence for background checks, but that won't prevent the aforementioned situation.  As they say, "possession is 9/10th of the law."  or, more appropriately 9/10th of the cost.

It could be a total coincidence and I am just freaking myself out.  Any advice/tips/tricks to avoid a switcheroo?

1)  Look at bank statements

2)  I wouldn't do it. We don't rent to any felons in the last 10 yrs. No exceptions.

3) Is the rental market strong? If so, do away with accepting section 8 and move on to the next interested party. In my experience, section 8 and other income assistance programs don't make for the best tenants. There are always exceptions, but if you're not hurting for tenants then raise your standards!

Originally posted by @Wesley W. :
Originally posted by @Elizabeth Nourse

I do think Section 8 is a really good deal though, for investors that want to minimize turnover in Class C units.

 Not in my market.  The Housing Authority dictates the "max rent" you can charge based on the number of bedrooms which, in my experience, is much lower than market rents.  Then you have the annual inspections which, again, in my market I would say is bordering on abusive.  I got a violation notice for an escussion ring that was not caulked to the shower wall for the shower head pipe and loose veneer trim on the edge of a bathroom vanity door.  I had to fix it in 30 days or the rent would be withheld.  This is why I am not keen on Section 8.  It's costing me money (in the form of loss to lease) and time (ticky-tack inspection violations).

I got a Fail rating with the escussion ring too.  Did your Fail notice state that not only the rent for the failing tenant BUT all other Section 8 tenants in the same building will be with held too?

OP.  Back to you posting....if you can say No, then I wouldn't do it (like you said, it sounds fishy).  If your state, requires you to take section 8, then polite say yes, show them the unit and then you decide    ; )

Originally posted by @Rich N. :

I got a Fail rating with the escussion ring too.  Did your Fail notice state that not only the rent for the failing tenant BUT all other Section 8 tenants in the same building will be with held too?

 I only have one Section 8 tenant, so N/A.

Convicted felons and smokers both fall into the same category of not being a protected class correct?  Thanks for the great post and replies!

Smokers are not a protected class.

In addition to asking for bank statements, you could ask for tax returns.  If they are cheating Uncle Sam that says something.

A tenant having a parole officer may not be a bad thing.  It is another person to hold the tenant responsible, and another person you can partner with/talk to if things go south. 

Even if you're forced to accept section 8, that does not mean that they automatically pass your own requirements. They can have section 8 and still not pass your screening. So I would be careful about what you say because the law might be against you. But as far as I know, in Florida, they still have to pass the landlords screening requirements. 

I have a tenant that is a stripper. So, a lot of her income is in cash. I compared the phone number to her work that she put on the application with what I found online and they matched. Good. I called and asked for the manager and we talked a bit. I ended up receiving a signed letter stating the average amount my tenant makes in tips per week from the manager. It might still be a bit risky to some, but everything else was checking out on this girl, so I went for it. I have not regretted my decision and she renewed her lease for another year just last month. :-)

Depending on the area, many of your applicants might seriously be "cash only" type of people with no bank statements to even show you. So you have to adjust your screening process accordingly, take no shortcuts, and not settle on anyone who even has a hint of being a problem.