Hi everyone, my name is Jon. I hope everyone is well. I am a newbie with my first ever property under contract. I wanted to be preemptive and see if anyone would be willing to give advice on how experienced investors screen their tenants and what paperwork is used. I am aware that there are companies that do it, but charge a lot. So I wanted to see if it was better to do it yourself using cheaper alternatives like RentPrep, etc. I hope to connect with others here.
We run their credit through our software. Al else we verify on our own. We check for ownership records when they list a landlord and make sure we are talking to the acctual owner, not their friend. We verify their income wtih W-2's and calls. Also linked in and google searches.
I'm getting better at this. I am in a C area. I do the same as the previous poster, but also:
- Facebook! I stalk a lot thru facebook once I get an application. If you aren't in a C or worse area, this probably isn't as important but still important. It's almost guaranteed anyone younger than like 40 will have one in a C/worse area, but may have weird fake names. Look for boyfriends that aren't on the app but are garbage gangster people. I can't count the number of seemingly good applicants with their lives together have a POS baby daddy waving guns around on FB.
- Send a simple questionnaire with a release signed by the tenant to their previous landlords. Mine has questions like "would you rent to this person again" "how many times were they late" etc. The corporate places will want a signed release and questions faxed over so they can go to their files, mom-and-pop places will often just freely speak their mind over the phone.
Paperwork: I use an application I created that requests 5 year employment and address history, animals (not "pets" since they need to disclose ESA etc), cars. Most bad applicants will not complete the entire requirement so it is easy to decline them for "incomplete application." However, then they want to fight about re-doing the application. I also have a "verification of disability" form I got from some law office website if they have an ESA/service animal but haven't had to use it.
Lease is actually the one from bigger pockets, modified a bit for my specific situation. "Meh" applicants get a month to month lease if they qualify. The one thing I need to add is a penalty if the tenant lets their utility bill lapse causing the utility to revert it back to me. In that situation right now.
@Jonathan Guerrero it depends on the quality of property you have and the tenants you are trying to attract in my opinion.
For the "higher end"/rent units I do the entire process through RentRedi. It's $19.95 a month and worth trialing because it has no contract or implementation like other software. Aside from screening it also has a lot of other neat features that will differentiate your property to people searching.
It gives the tenants a professional feel, and the screening is $35 once you approve an application. $35 is charged to them, and depending on how you are you can either credit off the first months rent or label that as your application fee. Your choice-I usually pass the charge them to make sure they are serious then credit it off the first months rent.
In the lower quality units I've found the "app" approach is proving to me more difficult than its worth. I send a PDF (not word or you will see prospective residents change wording) version of the lease. In the lease they provide you with their SS# and full legal name. We will then put the info in RentPrep and they get an email to approve or deny the screening request. You also have the option to pass the cost to the tenant or absorb it yourself.
I've gone cheaper in the past but the detail on both RentRedi and RentPrep is solid, and gives recommendations on other factors than just credit.
To mimic the other responses: I would also collect 2 paystubs, 1 W2, and a reference. Often I don't call the reference if everything else is stellar-but it says a lot about the prospective resident if they provide one vs. "available upon request"
Thank you @Christine @Nicky @Michael. This is golden advice. I truly appreciate everything. I will be looking into all of this. Making sure I an prepared. This is the most daunting part In my opinion.
I use Tellus App for my rental property and their screening service is totally free.
Disclaimer: I only have one property so far. I am not affiliated with any sites mentioned.
I use Cozy.co for background and credit checks, and collecting rent. The tenants pay for the background and credit check when they apply; rent collection is free. I don't use the other features they offer (application, maintenance requests, document sharing, listing syndication). I wrote a detailed post about it here: