What are your renter screening criteria?

3 Replies

Everyone says how important screening tenants is. Experts, what grade of property do you rent, and what are your tenant standards?

Income 3x rent?

A certain credit score?

Evictions/evictions filed?

Criminal history?

Bankruptcy info?

I own both B class apartments here in the Berwyn area outside Chicago as well as C- class apartments in South Bend, Indiana. In Berwyn, we are easily able to stick to our criteria: Minimum credit score of 600, 3x the rent in income, no evictions, no criminal. In our C- class stuff, we realized after a few months that anyone that meets our minimum criteria in Chicago would just go buy a house. The housing stock is so cheap that it makes it much more challenging to find qualified renters. This leaves us leaning more on subsidized housing programs and lower quality tenants, which costs a lot more money ongoing! 

Because of this, I am attempting to purchase properties in better areas going forward. B class tenants are much, much easier on properties, and they are much easier to manage as well! If you can find buildings in areas that attract a mix of A and B class tenants, all the better! We even have one lady in our B class building that has an 800+ credit score! This could be due to the fact that her $850 rent is very affordable in relationship to the average home price of $250,000 in the area!

@Amanda G.  

No matter the class of rental our non-negotiable minimum screening requirements are:

  • no previous felonies
  • no previous evictions
  • income 3x the monthly rent take home. If they receive a subsidy then the income requirement is based on the amount they have to come up with per month that the subsidy doesn't cover

The one thing we are somewhat flexible on in a C- area is credit. For instance if someone fits all of the minimum requirements above and has a 570-580 credit score we will take a closer look at the specifics of their credit report. 

If the credit is low because of them not paying everyday bills like utility bills, car payments, cell phone bills then we will pass on them because they just don't pay any kind of bill on time or at all which isn't a good sign.

If the credit is low only because of a foreclosure/bankruptcy, medical bills, or student loans AND they make well above the minimum income requirement w/ no criminal or eviction history we may explore accepting them with 2 months security. 

Again, we only bend on our standards in the C- areas we operate, in the better areas there is no reason to because the renter pool as a whole is a lot more qualified. No need to take chances.

Originally posted by @Amanda G. :

Everyone says how important screening tenants is. Experts, what grade of property do you rent, and what are your tenant standards?

Income 3x rent?

A certain credit score?

Evictions/evictions filed?

Criminal history?

Bankruptcy info?

 3x rent, no violent felonies, decent history of paying bills on time, no evictions & a stable job history.

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here