Pre-Screening - Are We Being Too Tough?
New to Real Estate · Humboldt, SK · Member since 2021 · 8 posts · 6 votes
Pre-Screening - Are We Being Too Tough?
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Bruce WoodruffPro Member
Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votesOriginally posted by @Valerie Butler:
Verifiable income Katie Willcox, not variable, doesn't make any sense! Look it up next time ! And your a reputable landlord?
You're, Valerie Butler, not your. Look it up next time! Jeeeez, chill out.....
39 Replies
- Investor · Vancouver BC · Member since 2020 · 88 posts · 60 votes5y
Hi Katie,
you can keep all of your information to yourself and use it after you get the application. What information do you request on your application? Ie. 10-11-12 are part of the lease, not information you request on an application. #10 If a potential tenant admits they smoke, I do not give them an application. #1-#9 are statements, not a request for information. etc.
In general the applications I receive ask for name, date of birth, SIN. (they do not have to provide SIN) Their current address, their previous address if the current has been less than 2 years. I also ask for their phone number. This is the minimum information required to do a credit check.
I also ask for their current employer and their gross monthly income; direct supervisor and Ph or HR phone number if they work for a larger company. I also ask for their email address and I also ask for their reason for moving. (the best reason is that the landlord sold the house or apartment) The application that I give them, will state on it that a background and credit check will be performed on all applicants.
I do the credit check myself and expense the cost as part of doing business. If the income does not meet the 2.5x rent, I wont even do the check and auto fail them. If the candidate was a home owner previously, and they sold their home, (no income) I will ask for proof of funds. This is not usual, but I see it sometimes now as the market was so hot in the last 6 months, a lot of retired owners sold their homes.
If I do the check, (for a lower income neighborhood, 600 min credit score) Then I call the employer and ask for a general monthly income to match with their application and if the person is reliable. I call the landlord and ask how long the tenant has been there to match with the application, and if they are on time with rent, and again if they are reliable. In a Strata apartment or condo, I will also ask and if there have been any complaints regarding the tenants (noise/smoking etc. )
Replies to the applicant is.. your application was approved/not approved. If not approved, do NOT give a reason. Especially do not mention race/religion/marital status/sexual orientation or anything related to Human Rights. You do not want to be accused of discrimination and have to go to a Human Rights Tribunal. The bar is very low.. to the point of making them feel discriminated against, in one of the protected categories is dangerous waters.
... just say thanks for your interest, your application was not approved. Next.
Hope this helps.
Originally posted by @Katie Willcox:Ron - Good point! Here are our 'qualification standards':
1. Applicants must have valid government photo ID and a valid Social Insurance Number.
2. Background checks will be conducted on all applicants over the age of 18 years old.
3. Income must exceed three-times the monthly rent. (Rent is $1,150.00)
4. All income must be from a variable source, univariable income will not be considered.
5. All applicants must have positive references from all previous landlords from the past five
years.
6. Applicants cannot have any previous evictions.
7. Applicants must not have unpaid judgments from previous landlords.
8. Applicants must exhibit a responsible financial life. Their credit score must be a minimum
of 650. If no credit score is available, a secondary credit reference must be provided as a
co-signer on the potential lease.
9. Applicants must past the background check.
10. Applicants and all people who intend on living in the property must be non-smoking.
11. Maximum 2 pre-approved pets living at the property at any given time.
12. Maximum 2 people per bedroom living in the property at any given time. - Investor · Vancouver BC · Member since 2020 · 88 posts · 60 votes5y
Probably getting off topic here but you can run into complications with no pets and no smoking. You would think that those are no-brainers, but you can run into an individual now and then who says they need to smoke marijuana for medical reasons or they are blind and have a guide dog. It gets dicey when they have a "comfort" animal and a note from their doctor saying they have a medical condition that is improved with the use/ownership of a comfort animal.
- Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes5y
I pre-screen in pieces, beginning with the ad. 50 or whatever items all at once seems like a lot.
Ironically my 1st 2 questions are hard to find in 'the book.'
How many animals do you have and how much do you smoke are my 1 and 2. Easy enough. Discussing 'pets' at all is a rookie move and belongs in no modern book.
Then how soon would they like to move and how far is this from their income source. Nothing like the perfect applicant that can't move for 3+ months or has to commute an hour. The story, if any, will also be vomitted out at this point (via anonymous email).
With their name and some basics, a simple search can reveal whether you want to reply to their interest or not with a few more questions.
- Property Manager · Boise, ID · Member since 2021 · 119 posts · 48 votes5y
@Katie Willcox I have 6 minimum qualifications, and I think you covered them in yours. But, I don't put stuff like pets or where the income comes from in the standards up front. To me, those are more application questions. You're just trying to weed out the people you absolutely do not want to rent to. Maybe the list of 12+ standards looks overwhelming to potential tenants? Just my two cents... I'm brand new. Lol
- 5yColleen F.Pro MemberInvestor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votes
@Katie Willcox being in canada I don't know if you have to tell them everything up front. Your criteria are fine but the delivery is too exhaustive. Just do a little sentence or two on screening criteria income 3 x rent , credit score x , background and credit check required in your ad. Just the highlights I would leave out detail like they must have government ID and Social Insurance number, not that they shouldn't just that it isn't the first go to requirement.
I would just do pre-screening when they call putting answers on a simple spreadsheet or send a couple questions via email. who are you looking for? how many occupants? any animals? what kind, etc, anyone smoke? Turn people down for showings if the basic pre-screen questions don't meet the criteria. It comes across less exhausting to them then listing all your requirements. They aren't going to give personal info like licenses on the first contact. You can give them an application at a showing or set up an open house time.
@Katie Willcox
I think we often have to tailor our requirements to our local market.
I dont list all my requirements, i have them fill out an application and then I go from there.
In my market almost no one has a 650+ credit score. Unless they have low income. So I look at thier overall situation and if they meet everything else I will check into thier rental history. So while stringent requirements are great sometimes they have to be looked at holistically if the market dictates that.
All that being said being patient is a must to prevent major mistakes but I won't rule someone out if they meet the criteria in the areas I hold the most important. Every market is different
- Real Estate Agent · Princeton, NJ · Member since 2016 · 1k+ posts · 1k+ votes5y
@Katie Willcox - agree with everyone else. Send them a pre screening Google form type questionnaire with 5-7 questions. At the top of the form, I’d write my basic criteria like income needs to be 3x rent, responsible financial history, no evictions, (no smoking indoors, no pets). Then it would go into like What is your name? What is your cell? What’s your email? When would you like to move in if you like this apartment? When are you available to tour? How much do you make monthly before taxes? What are the names,breed,ages of your pets? (Or N/A). How often do you smoke? (Or n/a). Is there anything on your credit or background check you would like to explain?
- 5yJoe HammelBusiness MemberReal Estate Agent · Metro Detroit, MI · Member since 2018 · 614 posts · 666 votes
@Katie Willcox
Application requirements don’t look too absurd to me.. May just have to wait it out.
Does the place look nice? Want to make sure getting the right applicants..
FIRE Realty Team - Keller Williams5379 Reviews - 5yJim KalishPro MemberReal Estate Investor · Matthews, NC · Member since 2017 · 219 posts · 173 votes
@Katie Willcox It's right on the money. Looks a lot like ours. I'd even add that income and rental history must be consistent for a certain period. We use 2 years. We have given exceptions due to Covid. In our area during the first couple of weeks you get flooded with folks who won't be able to meet your criteria. There is usually a reason. They are hoping that since you are a private owner you will be more flexible. Then those who can meet your criteria start applying. Hang in there. Loosing a month's rent by waiting is a lot less expensive than evicting. I know that from experience.
- Vacaville, CA · Member since 2019 · 218 posts · 140 votes5y
@Katie Willcox
From my experience, the credit score minimum is probably scaring them off. We asked for something similar (even a little higher), and we only had a few people turn in applications. I had one potential tenant tell me “if my credit score was that good, I’d be buying a house instead of renting.” We ended up removing the credit score minimum from our ad and then would would have a chat with potential candidates about their credit. Worked out much better for us. Good luck!
- Vacaville, CA · Member since 2019 · 218 posts · 140 votes5y
@Jim Kalish
We have bad the same experience with people thinking that since we are private owners vs. property management company that we will be more willing to overlook bad credit, prior eviction or criminal background.
- 5yBruce WoodruffPro MemberContractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
Originally posted by @Karla Simmons:
@Katie Willcox
From my experience, the credit score minimum is probably scaring them off. We asked for something similar (even a little higher), and we only had a few people turn in applications. I had one potential tenant tell me “if my credit score was that good, I’d be buying a house instead of renting.” We ended up removing the credit score minimum from our ad and then would would have a chat with potential candidates about their credit. Worked out much better for us. Good luck!
I think this is smart. Too much emphasis is put on the credit score game. And it is just a game that can mean little.
I'll tell this story again.....last summer, my wife and I had credit scores of 750ish. We made the decision to get completely out of debt, no debt. A couple months later, on a hunch, I checked our scores and they had dropped to 620-630.
I had kinda expected this and I called my banker to verify my thoughts. He said, "yep, 'they' absolutely hate people with no debt and penalize you as such.....it's smarter to carry a little debt and pay it off every month"
To which I said BS.
But in this case, if you used your credit score rule, you would have missed out on a couple like us, who would be your best tenants ever....
- 5yDrew SygitBusiness MemberProperty Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
Your list of questions:
1. Applicants must have valid government photo ID and a valid Social Insurance Number.
2. Background checks will be conducted on all applicants over the age of 18 years old.
3. Income must exceed three-times the monthly rent. (Rent is $1,150.00)
4. All income must be from a variable source, univariable income will not be considered.
5. All applicants must have positive references from all previous landlords from the past five
years.
6. Applicants cannot have any previous evictions.
7. Applicants must not have unpaid judgments from previous landlords.
8. Applicants must exhibit a responsible financial life. Their credit score must be a minimum
of 650. If no credit score is available, a secondary credit reference must be provided as a
co-signer on the potential lease.
9. Applicants must past the background check.
10. Applicants and all people who intend on living in the property must be non-smoking.
11. Maximum 2 pre-approved pets living at the property at any given time.
12. Maximum 2 people per bedroom living in the property at any given time.
Sound more like a list of approval criteria."This is copied from our website:
We do not have any set criteria for approvals, we simply require you to provide enough information to convince us you will pay rent on time and take care of the home properly. Your application can be applied to any home we manage, but your income must be acceptable for the rent amount. So, tell us your story when you submit your application!
We perform full credit and background checks as well as checking sex offender lists. Convictions, evictions, bankruptcies and negative credit must be acceptably explained in writing. Verification of rent payments to your last two landlords are required.
All sources of income are accepted, including Section 8, but your voucher must cover the rent without any utilities included. Please check with your Caseworker for guidance.
We also require a bank or debit card statement for the most recent month.
All this information is used to determine a debt-to-income ratio. Ratios over 50% may require an acceptable cosigner."
Would suggest removing the requirement they complete a questionnaire before they see the property. Just make sure your approval criteria are on your ads.
Logical Property Management4.9460 Reviews RE: credit scores...a few things I remember when screening:
I use Experian Connect to request a credit report from a prospective tenant who has otherwise seemed like they might be a good fit based on other criteria and questions answered (my requirements are almost identical to yours, I think it weeds out the bad and if people don't want to answer them, well, you don't want to rent to them...) The reason I don't just ask what their credit is, or ask them to provide a report is because: people lie, and people are good at photoshop. Get the report from a source that does not include the prospective tenant's handling of the report.
Also, regarding the actual score number - I focus less on the number, and more on the history of debt, and current debt to income ratio. Score of 600 - but details show few loans, and the ones they do have are a minimal percentage of their overall income? Likely a better tenant than one that has a score of 800, multiple loans even though paid on time, and wanting to rent a place they can't afford with all those existing loans on the books.
Something to think about.
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