How do you tenant screening with a scoring system?

Question

Good day BP fam!!! I have an open house this weekend to show my 1st investment property ... #HYPE!!! I've gotten so many calls, messages and emails with interest, but I'm sure I'll get plenty of unqualified candidates. I read a few posts about a scoring system that some investors use to help them determine the rate of the potential tenant. I've also heard of PM sites that also weigh your candidate through their scoring system, but do not have any company names. The property is in a lower income, / C-area so my standards are in line with the tenant base. Any insight is GREATLY appreciated :)

Take care ... Cassandra

Nathan Gesner · Answer

I use a scoring system. I basically wrote down the various criteria I consider for each applicant:

- Income

- Length of Employment

- Credit Score

- Collections or judgments

- # of Late rent payments

- # of lease violations

I came up with 10 criteria and then assigned scores to different results. For example, a credit score of <600 is 0 points. A score of 601 - 650 is 1 point. 651 - 700 is 2 points. Above 700 is 3 points.

I score each item individually and that gives me an overall score that determines PASS/FAIL and how much of a deposit they have to pay.

<16 = Fail

16 - 20 = Double deposit

21 - 25 = 1.5 month's rent

26 - 30 = 1 month's rent

Cassandra Sifford · Answer

@Nathan G. ... Thank you for the advice!  You've commented on few of my posts and appreciate the information :)  I like the ease of this scoring.  I found another one in a post and it was too long and had too many qualifiers and dis qualifiers.  I need something simple and straight to the point as I want to be fair with my selection.

John Warren · Answer

@Cassandra Sifford I have used transunion smartmove in the past to screen tenants, and I was very pleased with the results. You still need to dig deeper as any screening tool just gives you a starting point. With lower income areas you may struggle to find tenants with a 600+ credit score. If you find that this is the case, I like to weigh the income quite heavily and look for other factors that may mean they will be successful. There is no silver bullet for getting good tenants in C-/D areas though.

Cassandra Sifford · Answer

@John Warren Thank you for your response!  I'll have to check into Transunions screening service.  I'm hopeful to find a tenant this weekend as this project has been a long one.