What's the best way to go about screening tenants?

Question

Newbie here at being a landlord. What's the best way to go about screening tenants? Do property management offer just the screening and placing of tenants and then removing themselves from the picture?

Soh Tanaka · Answer

There's a lot to it, but here are some of the tips.

- Know the Federal, State, County, and Local laws.

- Apply the same criteria to everyone, and treat everyone the same.

- Have everything on record (NOT necessarily saying to video/voice record without approval)

- Have written criteria

- You may need to jump through some hoops to be able to use a screening company, so you may want to contact them sooner than later.

- Know that you will run into a gray area.

- Hiring a professional doesn't mean they will do a good job.

Jimmy Lieu · Answer

Hi Michael, I'd recommend going with a property manager but if you are set on self managing, I would make sure to look for 3x income, good credit score, background check, past rental history, etc. As an investor and agent, I've done a lot of self managing myself so I'd be happy to answer any questions or connect

Mark Townsend · Answer

I’m on my first property as well but I successfully used Zillow to screen my tenants and it worked for me.

had it listed on zillow and they can apply directly for $30ish. Has background check and credit check and a place to upload paystubs.

Melanie Thomas · Answer

Hello! My suggestion for you is to develop a comprehensive tenant screening criteria which clearly specifies your acceptable and non-acceptable conditions. Ensure that each potential tenant undergoes the same screening process for fairness and consistency.

You may want to consider the "Leasing Only" services provided by some property management companies. The cost of these services varies greatly depending on their screening protocols and the local real estate market. Their role typically involves finding a tenant for you, drawing up the lease agreement, and then leaving the direct dealings with the tenant to you.

For those new to the landlord role, it might be beneficial to engage a full-service property management company until you're familiar with the ins and outs of property management. It's important to remember that there are numerous legal complexities that you could potentially stumble upon.

I wish you the best of luck and successful investing!

Zoey W. · Answer

My mother actually had numerous rental properties (over 7 of them) and I MOST tenants were an absolute NIGHTMARE. I cannot tell you how many times tenants TRASHED entire house, put dog feces on ceiling, destroyed windows/doors on purpose... it was horrifying. I recall my mother in tears sobbing as she stood in front of the TRASHED house with tenant... tenants refused to pay rent and trashed entire house and it was a very nice house in VERY nice upper scale neighborhood.

It appears my mother must have been screening tenants incorrectly? Because the ratio of NIGHMATRE tenants she had in comparison to the number of properties she has seems waaaaaay too HIGH.

Witnessing all this has honestly left me feeling EXTREMELY concerned. My only hope is that my mother was NOT screening tenants properly? She also was NOT using property management service... she was screening, placing and managing the properties herself.

I 100% FULLY understand that bad tenants are going to happen to anyone eventually, it's just the nature of the beast... but the overwhelming number of NIGHTMARES my mother dealt with just doesn't seem normal! :(

This is what is making me feel nervous to NOT use property management company (a good one of course)... to hopefully increase my chances of not ending up like my mother.

... and because of her experiences she is highly against me wanting to invest in real estate. I do not agree with her... I just hope I am not being naive. A friend of mine who had dozens of properties... many section 8s etc (netting over 50K/month profit)... also got out of rentals due to it being massive headache. Switched to being PML (private mortgage lender) but now he is strictly hard money lender instead.

Zoey W. · Answer

Let's say I only wanted to use property management company for one year... is there usually a contract with property manager that you MUST continue to use them for X amount of time or for specific property? Thanks!

Zoey W. · Answer

If I am going to have out of state rental (for just one property) and I have very reliable handyman and plumber (who I am friends with and trust)... and I were to use Bigger Pockets "tenant placement" service for example to screen potential tenants etc... then so sorry but I am confused what the "numerous legal complexities that landlord could potentially stumble upon" are?

I also also confused about keeping house in my name or switching it to LLC because I keep hearing conflicting opinions on this and that LLCs don't really protect all that much at all... so what is the point.

This will be my very first rental property. I would 100% NOT be confident or comfortable in finding/screening/placing my first tenant especially since I will not longer be living in the same state as the property after reno is finished. But if I can use a service to find/screen/place my tenant then I am confused whether it would still be worthwhile for me to use property management company as I already have in place people who I trust who can resolve things if there is ever an issue with the house tenant is in... and the fee for property management company takes up a huge amount of cash flow.... so I rather handle without if possible... if I had multiple properties I can understand property management company but for this one house I am having difficulties seeing it...

Thanks in advance for any possible feedback...

Matthew Banks · Answer

We use Zillow's application service. It does identity, credit and background checks. You'll want to set criteria (FICO score, income, guarantor) so that you've a consistent method to approve tenants. And be sure to respect Fair Housing laws at the federal, state and local level. This is something you could automate and delegate too.

Michael Bailey · Answer

@Michael Elkins Congrats on becoming a new landlord!

Bigger Pockets actually offers tenant screening on their site through a trusted partner. There are multiple options available for screening packages; tenant involvement/no tenant involvement, instant reports, hand-compiled reports, and even income verification.

You can find further information by going to Tenant Screening under the Tools tab.

Best of luck to you!

Brad Larsen · Answer

@Michael Elkins Some management companies will offer tenant placement (for a fee).  If you do it yourself, I would recommend providing applicants a document on what your specific screening criteria is. Some landlords use Smartmove for background checks (Transunion) and BP offers resources as well.

Brad

What's the best way to go about screening tenants?

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