How to Screen Tenants in 7 Easy Steps

Tenant screening is the best way to ensure you’re finding high-quality tenants who pay rent on time and won’t damage your property. To avoid legal headaches, costly damage, and unpaid rent, it’s best to follow these 7 simple steps: 

Create an Online Rental Listing That Sets Requirements

The best way for your rental listing to help you screen tenants is to outline your requirements in the listing. In your property description, you should write that you require a rental application and credit and background check.

If a tenant has something to hide, then he or she will be deterred by your requirements and won’t reach out. This technique makes your listing an effective way to weed out bad tenants.

Pre-screen Prospective Tenants 

When a prospective tenant reaches out to you, this is your first opportunity to learn more about him or her. You should ask pre-screening questions:

• Where are you currently living and why are you moving?
• When are you looking to move?
• Will you submit a rental application and authorize a credit and background check?
• Do you have pets or smoke?
• Will you have roommates?
• What do you do for a living?

As you’re getting to know different tenants, listen for how interested they are and if they’re polite. Strong interest and good manners indicate that a tenant could be a good match.

Likewise, you should only move forward with a tenant if he or she fulfills your lifestyle requirements. For example, if you don’t allow pets, then don’t move forward with someone who has a dog. Also, only move forward with someone if he or she agrees to your requirements.

Meet the Prospective Tenant at a Property Showing

The property showing is the first time you meet a prospective tenant in person. We highly recommend individual property showings and not open houses. Individual showings are better for tenant screening because you’ll be able to get to know the tenant and have a higher chance of noticing red flags. 

Here are some red flags to watch out for: 

• Bad manners
• Unfair negotiations
• Unpreparedness
• Disheveled appearance or belongings

Meeting prospective tenants in person is your opportunity to notice red flags, ask more questions, and gauge their interest.

Require a Rental Application

Once you’ve met a tenant and want to move forward with him or her, the next step is asking him or her to fill out a rental application. Your application should ask for the following key information:

• Employment, income, and manager contact information
• Current residence and landlord contact information
• Prior residence and landlord contact information
• Income verification (offer letter, tax return, or paystub)
• Yes or no questions:
  • Has the tenant ever been evicted? 
  • Does the tenant smoke? 
  • Has the tenant ever refused to pay rent? 
  • Has the tenant ever declared bankruptcy?  

Verify Tenant References

With a completed rental application, you should start reaching out to the tenant’s references. We recommend contacting his or her’s employer to verify income. You need to know if the tenant is responsible and has a steady income. 

Similarly, we recommend contacting both the current and prior landlord because the current landlord may be motivated to lie in order to get rid of the tenant. Checking with a prior landlord is a good way to get an unbiased viewpoint. 

You should ask prior landlords if the tenant ever skipped a payment or paid late. References are your opportunity to learn about prior behavior. Because after all, past behavior is the best indicator of future behavior.

Require a Credit Check

1. Understanding a tenant’s financial history is an important tenant screening step. You need to check his or her’s credit score (620 and up is good). You can also check payment history and if he or she tends to pay on time. If you see that a tenant consistently makes payments on time, then that is a good indicator (but not a guarantee) that he or she will pay rent on time.

Require a Tenant Background Check

The tenant background check is crucial. It’s the best way to make sure you’re renting to a tenant who will keep your community safe. Beyond the danger of renting to a criminal, it is also a huge liability risk.

If anything happens on your property and you let a tenant with a significant criminal history live there, you could be at risk of a lawsuit. This is true whether or not you completed a background check, so make sure you cover your bases by following this step.

Conclusion

Once you’ve followed the 7 tenant screening steps, you’re ready to make a decision. To accept a tenant, you should follow up with him or her and outline the next step: signing a lease.

If you’re rejecting tenants, you should follow up with them and say, “Thank you for your interest in our rental property at [property address]. Unfortunately, the property has been rented to other tenants at this time.”

Keep in mind that you don’t usually need to specify a reason why you’re rejecting someone. According to the Fair Credit Reporting Act, you need to inform an applicant if he or she was rejected due to a credit report. We recommend you hold onto documentation of why you rejected each candidate (a low credit score, etc).

Overall, tenant screening is the best way to ensure you’re renting to tenants who won’t cause you headaches. If you follow our 7 steps, you will find (and keep) great tenants.

Feel free to write us a question below if you have any comments or questions about tenant screening.