Tenant Screening Procedure

Member since 2023 · 2 posts · 2 votes

Hello All,

I am planning to list my property in NC for rent. I have screened tenants in the past, but it has been 8+ years ago. Looking for recommendation for how to screen the tenants and what services I can use?

Here are the things that comes to my mind that I think I need help with:

1) What background check service should I use?

2) How to verify documentation provided by the tenants?

3) What's the best place to find the lease contract?

4) any particular things that I should be careful in the lease contract that is not available in the standard contract?

5) Is one month rent security deposit enough nowadays?

6) What are the best places to advertise the property and where to stay away from?

I really appreciate it if people in the community can point me in the right direction.

Thanks!

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Nathan GesnerBusiness Member

Moderator

Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes

I recommend you include some of your key qualification criteria in the advertisement. For example, I mention that every adult must pay a $30 application fee, pass my credit/criminal background, make a combined income of 3x the rent, and whether or not the property accepts pets. Use the top three or four discriminators so applicants can screen themselves.

Then you need to have clear screening criteria yourself. What's the lowest credit score you will allow? Do you check Landlord references? Do you verify their income? Do you know how to read the credit/criminal background? What if they have collections or judgments?

Here's a detailed guide on how to screen applicants: https://www.biggerpockets.com/...

The DIY Landlord Book4.7247 Reviews

Website View Page

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Caleb Henley
Member since 2022 · 2 posts · 1 vote
2y
Following this... I am in the same scenario!
1 Reply
Cory J ThorntonBusiness Member
Real Estate Agent · Raleigh, NC · Member since 2021 · 240 posts · 281 votes
2y
@Iftikhar Khan and @Caleb Henley -
With our rentals we set the following as a minimum for application approval.
- 650+ Credit Score
- Clear background check, eviction history check and sex offender registry check. We run all this through a larger software but before we owned a management company we used Trans Union.
- Verified income must be a minimum of 3X the rent.
- Current employer reference must be provided and we must speak with the employer. If they have not been employed at a place very long, then we want the previous employer also. Nothing moves forward until we talk to these references.
- Previous landlord/s must be provided. Again, we must speak to the previous landlord/s before taking any steps forward.
- If a pet is involved, there are third party pet verification services that you can contract with to help assess the risk of the breed. They can also do validation for applicants with "service animals."
- With a pro membership there is a database of NC attorney reviewed documents right here in bigger pockets. You can also work with a real estate agent to lease the property and handle to docs.
- Our minimum security deposit is one month of rent. If someone has a credit below our threshold, but everything else looks solid, then we will sometimes offer a credit contingency plan where we help offset the low credit score risk with a double deposit. After year one, with no missed or late payments, we will refund half the initial deposit.
- We we were self managing properties I liked using Turbo Tenant, but I have heard good things about other platforms as well.
Best of luck on your self management Journey! If there is anything our team can do to help, just give me a shout.
2 Reply
Caleb Henley
Member since 2022 · 2 posts · 1 vote
2y
Thank you Cory for the detailed response. This will become a sticky for me, appreciate your help!

0 Reply
Nathan GesnerBusiness Member
Moderator
Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
2y
I recommend you include some of your key qualification criteria in the advertisement. For example, I mention that every adult must pay a $30 application fee, pass my credit/criminal background, make a combined income of 3x the rent, and whether or not the property accepts pets. Use the top three or four discriminators so applicants can screen themselves.

Then you need to have clear screening criteria yourself. What's the lowest credit score you will allow? Do you check Landlord references? Do you verify their income? Do you know how to read the credit/criminal background? What if they have collections or judgments?

Here's a detailed guide on how to screen applicants: https://www.biggerpockets.com/...
The DIY Landlord Book4.7247 Reviews
Website View Page
2 Reply
Iftikhar Khan
OP
Member since 2023 · 2 posts · 2 votes
2y
Thanks everyone this is really helpful.
0 Reply
Alecia LovelessPro Member
Member since 2019 · 3k+ posts · 2k+ votes
2y
@Iftikhar Khan I use MySmartMove to do my tenant check. It does not do a pet check. I have been happy with it.
I apply the fee to the first months rent because we are hard up for money where I live. I do the $43 check. It is approximately 2 hours worth of work for most of my tenants and they really appreciate it.
Most of my pet tenants are extra responsible and stay a much longer time than my non pet tenants. I do not charge a pet deposit or a pet rent. They appreciate this and respect this.
They know they are responsible for picking up the dog poop and will be responsible for any damages to their unit.
I have not had a problem yet.
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Glen Wiley
Investor · Richmond, VA · Member since 2023 · 459 posts · 474 votes
2y
1. I use zillow rental management and apartments.com for tenant background and credit checks.
2. What docs are you validating? If it is landlord references and employment verification, I prefer to find the contact info independent of the tenant so that they can't provide a friends phone number.
3. Most states have standard leases, zillow and apartments.com both provide leases.
4. I have modified my lease over time to include statements about lawn care, smoking, no waterbeds.
5. I use one months rent for security deposit.
6. Zillow gets the best results when we list our houses - about 90% of our leads come from zillow inspite of syndicating across many other services. Apartments.com charges $90 to syndicate the listing - not worth it.
Use zillow or apartments.com to collect your rent via ach - way smoother than getting checks or cash.
1 Reply
Tamy K.
Member since 2024 · 7 posts · 1 vote
2y
@Cory J Thornton Do you use the Premium Turbo tenant? Do you use it for the whole process: tenant screening, background and application?
0 Reply
Cory J ThorntonBusiness Member
Real Estate Agent · Raleigh, NC · Member since 2021 · 240 posts · 281 votes
2y
Quote from @Tamy K.:

@Cory J Thornton Do you use the Premium Turbo tenant? Do you use it for the whole process: tenant screening, background and application?

@Tamy K. - We currently use/layer AppFolio, findigs, and showdigs for management. I have never messed with Premium Turbo tenant. When I only had a few doors, I liked the basic version of Turbo Tenant and found it helpful, but once we bought a management company, we went right from that to some larger scale systems.
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