When you are on the lookout for new tenants, it can be a tricky business. Sure, the screening process is pretty simple. I mean, all you have to do during the verification process is take a look at their previous rental history, background check, and employment verification. From there, your tenants will be compared with a pre-made criteria, and if they pass, you accept them. If not, you keep moving onto the next possible tenant.
However, even a brilliant set of criteria has flaws to it. So, if you want a foolproof method of weeding out the good tenants from the bad in this gigantic sea of people, then be sure to keep reading to get a better understanding of the different characteristics that each one has.
Download Your FREE copy of ‘How to Rent Your House!
Renting your house is a great way to enter the world of real estate investing, but most first-timers (understandably) have a lot of questions. Fortunately, the experts at BiggerPockets have put together a complimentary guide on ‘How to Rent Your House’. All the skills, tools, and confidence you need to successfully rent your house are just a mouse-click away.
The Not-So-Good Tenant
Unreliable Income
Trust me, if your tenant just doesn’t make enough money, or if their income keeps fluctuating and you don’t know whether or not they will be able to make the following month’s rent, then you will definitely be stiffed sooner or later. Sure, a larger deposit does help to some degree, but it will simply not be making a large enough difference between profitability and money loss if you face to possibility of having to evict them. Keep in mind that a tenant should earn at least 3.5 times the rent in net income in order to stay safe.
Related: The Top 10 Rental Features That Attract Cream of the Crop Tenants
Bad Credit Score
While the credit score is generally associated with the risk of a tenant in terms of their ability to pay rent, a bad credit score actually has many studies linking it to an increase in risky behaviors. So the next time you check someone’s credit score, be sure to think of it more as a “personal responsibility score.” The credit score will tell you the tenant’s desire to pay the rent, and essentially, it is a pretty good indicator of their future personal behaviors. If there is an outstanding balance in utilities for the prospective tenant, that is definitely a red flag.
No Respect
Trust me, every landlord who ever had a bad run in with a terrible tenant will say that this tenant had no respect for others. In fact, the likelihood that they had any respect for themselves was pretty minimal. Not only is this kind of person horrible to deal with, if they don’t even have respect for living, breathing people, how can you trust that they will respect your property and take good care of it?
Here’s a neat tip: Why don’t you call their previous landlord? After all, they would definitely have had experience with them in the past. Or perhaps if your potential tenant is new to the rental scene, it would be a good idea to ring up their employers or other references.
The Dream Angel Tenant
No Criminal Record
If your potential tenant doesn’t have a criminal record, then that is definitely a sign that works in their favor. Be sure that you use the county level criminal check that will have a full compilation of every open and dismissed case that your tenant has undergone. Trust me, you will want to know absolutely everything. From parking tickets to violence, this will give you a brilliant indicator of both their ability to abide by the law and their adherence to a structured lifestyle.
Honesty/Integrity
There is no doubt that this is one of the top factors that should be on your list. It is highly essential that your tenant is trustworthy, reliable, and decent. After all, you want to rent your property to someone who will do what he has agreed to — somebody who morally chooses to do the right thing.
Related: 6 Things Every Landlord Should Do to Win Over the Hearts of Tenants (A Renter’s Perspective!)
Cleanliness
Personal hygiene is a major indicator of so many things. Not only will they be able to ensure that your property remains in tip-top shape, but people who are cleaner, neater, and tidier tend to set higher standards than those who are messier. While this rule is not set in stone, many studies have linked cleanliness to a person’s ability to listen to the rules and generally mean what they say.
Conclusion
To conclude, with all these awesome pointers in mind, you’ll definitely have one less thing to worry about on your journey to becoming a savvy real estate investor. Keep in mind that it’s crucial to have quality tenants. This can make or break your cash flow.
What tell-tale signs do YOU look for when screening tenants?
Let me know with a comment!
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks, and techniques delivered straight to your inbox twice weekly!
- Actionable Advice for Getting Started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more
Sign up below to download the eBook for FREE today!
We hate spam just as much as you
40 Comments
Great advice Sterling! One thing that I do (with my lower number of properties that I self-manage) is to walk interested tenants to their car. If their car is a real mess, chances are your property will end up that way.
Great point Cheryl! I have used this in the past. Thanks for shining this to the light
How are you to judge honesty and integrity with probably only meeting prospective tenants 1 time? Talking to their references? Previous landlords? Current employers?
Maybe these will give you a little insight about their character, but I’m not sure you can get the whole story.
I like the comment above about checking out their car. I’ve heard that quite a few times and I agree. It can be old, but if it isn’t clean, that gives you an idea of what condition your house is going to be in.
Totally agree with you Nathan. Sometimes it really comes down to your gut when picking the right tenant. In my experience the previous landlord is always a great reference. Just have to make sure you are speaking to the actual landlord.
Just look at bank statements over a few months, people who are responsible will have a bank statement that is not drained at the end of every month. Look at it against what they report for income, it should match up or be pretty close. I definitely agree with the car thing and general appearance, both good indicators. Generally if someone is a mess everything else they do is as well. I am willing to bet every time an ll got burned, he/she let something lapse in the background check or let something go that they should not have.
Makes total sense Steve. I like the idea of digging further by verifying through bank statements.
I thank you for the above. I am learning the lessons. For past 6 mos of having a rental property I have had to evict 4 tenants. I fallen for the hard luck stories and worst of all I rented to a family member!! I did a rental appl one that I made up and did not request their credit check nor did I have an outsource to do criminal background checks. The eviction process here in Baltimore Md sucks!! The process takes 60 days to evict! In the mean time no rent is paid…….. I am now growing a thick skin!!!
Its all a learning experience Shelia. Do you currently call references & run background checks moving forward?
Sheila, I do rent to own of cheap houses in rural areas of GA. My tips may help:
– the MUST have a bank account. Responsible folks have bank accounts, that also means they don’;t have debt collectors hounding them emptying out bank accounts,,, of of the reasons why folks don’t have bank accounts.
– Their bank account MUST have move in ammount plus some
– They answer the question: “why do you want to live HERE in THIS rental?” The answer MUST be: my lives near by, my kids are in the local school, my job is 5 min away. Only pick tenants who answer all of the above favorably.
Of course credit and criminal and eviction check.
Hello Curt,
Good idea to ask th question about why the tenant wants to live in your house.
What do you mean with: my lives near by?
Thank you for answering.
Sorry Dennis, I missed an important word: “my lives near by” was supposed to be a very important hook keeping tenants in place; my father, uncle, family lives near by. Dig into why tenants move, also why tenants don’t move: living near family is a huge sticky factor, must stay in same school system is big one, near a job not that big, has pets no one else will take. Which is why I LOVE dogs and cats, but more often other landlords turn dogs away so I take dogs. All my houses have fenced back yards. No “bad dog breads” though. Filter for high sticky factors.
Avoid folks who answer why here? Because yours is nicest, I like the house etc etc. All these can can change over night and then they leave.
Families living near relatives, keeping their kids in the same schools, with pets where no one else will take them, just never leave.
Sterling White – Killing it with these articles lately! Content-producing machine…
Thank you for the kind words Max! What is the biggest take away from this article for you?
another screening help is they must have a bank account further it must contain much more than the move in amount.
I ask “why do you want to live here in this rental?”
the answer must be something sticky like my father lives nearby my kids are in the local school and they want them to stay in the grade school, or my work is nearby…
if your renter prospect does not have a I have to live here and no place else hook then they will also have no must pay the rent and stay compulsion.
Great point Curt. I do love the point you stated on asking the question “why do you want to live here in this rental?”.
I believe if they have something anchoring them nearby as you mentioned then that is a really good incentive that plays in the landlords favor.
Really good pointers here, I especially like the comment made about walking them to their car. One thing I’ve been paying a lot of attention to is their personal hygiene (torn, stained clothing, rotted out teeth, etc.). If someone can’t take care of themselves, they can’t take care of your property.
Totally agree Kelly. Those are some good indicators to look for. Glad that was stated in the comments section.
Hi Sterling,
Great tips. Keep writing and providing advice.
Thank you for stopping by for the read. What was the biggest take away from the article for you?
Never forget to try to Google a possible tenant. I had one that passed the background checks including criminal. They had an unusual name. Google found a report of a conviction that was not disclosed.
That is interesting Scott. Thank you for sharing that experience.
Sterling, Thank you for your timely article.
I will soon be screening tenants for my new property and your points are very helpful reminders of the importance of conducting a thorough screening.
I would like to have additional information on the suggestion you agreed with, provided by Steve Portock. This is very interesting to me and had not heard it before. Common for mortgage applications but not for rentals to my knowledge.
How does one obtain those bank statements? Are they part of the documentation requested in your screening?
Pyrrha great question. The bank statements can be requested by the landlord as additional documentation. Remember it is up to the tenant to qualify themselves to rent your property.
Another stipulation that I have is that I have to visit their current residence if it is within 75 miles of where they currently live. It is part of the application packet and I make it very clear that this is a non negotiable deal breaker if we can’t visit their current place. It can be a real pain in the rear but through my experience where they live now and how they keep the place shows how they will keep your place. You would also think that most would “tidy” the place up when they know you are coming by on a prearranged appointment, but from my experience that is just not the case, the ones that will destroy your property NEVER clean up and make their current place presentable.
I also ask for a previous landlord – not just their current landlord but also the previous one to them. I have found that some unscrupulous current landlords will tell you what you want to hear just to move them out of their place and if you have one that doesn’t have them in their place currently you get the real honest truth.
Well said Frank. I like the idea of visiting the current residence. A little difficult at scale however, but can work.
Pyrrha, I too would like to know how a landlord goes about asking for/obtaining bank statements.
Thanks for this post, Sterling. These are great tips. The measurable ones are easier to follow through with (i.e. credit score, bank statement) versus the ones that aren’t measurable (honesty, cleanliness). Although all that information is important, in my experience, a checklist of as many measurable points as possible is the most scalable solution (i.e. if you want to hand off the rental process to a property management company).
Brillant point Kent! Some of the points above would work perfectly for a smaller landlord, but at scale can get difficult. It can be achieved at scale with the right systems in place.
By far the biggest things we look for are evictions and felonies. We might forgive a DUI if it was a while back, or anything that was 10 years or more. But those two (along with a credit score and landlord/employee reference) are the most important factors for us.
Same here. Evictions and felonies are on the top of our list. Its crucial to have good landlord references along with steady income.
Great tips again, Sterling! I definitely look folks up on Facebook, too. See their partying pics and shady friends, if any. I’m also sensitive to the nit-pickers. Do they want little things changed all over the place during your walk-through? Screen, screen, screen. Vacancy is much better than a problem tenant!
Great points Steve. Are you currently leasing your own properties? No better person to have your interests in mind such as yourself.
Great article! When a potential tenant calls my phone I go through a questionaire with each. Why are they moving? How much did they pay for rent at their previous? I ask if they have drove by the place and if it’s size and configuration works for them. I get a stated income and tell them we run employment verification, rental history verification, credit and criminal background check and if theres anything I should know about ahead of time (honesty!), etc… Many times in the initial conversation I can get a good judge of character.
I have found that this questionaire alone has helped weed through many undesirable applicants.
We have been renting three units for 3 years now, no evictions. The only people we pressured to move out early (always paying late, had dogs without permission, destroyed carpet…) were placed by property management who followed a standard algorithm. Since then, I like to screen my own tenants and have had much better success at doing so.
No one will have a better interest in your investment than you
Pre qualifying over the phone is always recommended thanks for mentioning this David. Glad to see now that you have stepped in your tenant quality has gone up.
Thanks for the interesting points – I do have one question about this and other lists I’ve seen.
Most of the advice I see states that in order to minimize the possibility of appearing discriminatory, you should accept the first applicant if they match your criteria.
How do you then qualify things like cleanliness or respect? Do you put those in your published criteria somehow?
In other words – if I take applications for two people: one who was disheveled and somewhat rude, and one who was pleasant and clean, yet both had appropriate records and credit scores…how would I avoid taking the rude tenant if they applied first?
To check a prospects cleanliness you can do a drive-by on current residence(which I have not done in my experience) or either when walking prospect to car after showing property you can look and see how clean they keep interior of car.
You can determine level of respect by speaking with previous landlords.
Hope that helps
Bank statements are a great idea, I should incorporate that into my criteria. Thank you Sterling.
Another idea that just pop in my head, that someone else wrote here in BP, is to get a copy of their car insurance.
I used to like to visit tenants at their current homes, it’s a great way to screen them. The more information you can get from different sources, the more you can find out about them. I try to look for discrepancies on their application, their credit report and what you can find on google.
Glad you enjoyed the read Chris. Are you currently leasing your own properties?
Hi Sterling,
Great advice from you, thanks for that.
Some questions will come up while reading your post and all the comments.
How about renters who currently live by their parents? How to check how clean the tenant is? Proberbly mom will clean the house, so you cant count on that. Are you gonna look in the bedroom of the tenant?
It is also difficult to predict how well they are gonna pay the rent becouse he/she is not paying for ‘hotel mom’. Can you tell how you solve this issue?
I hope you wil have an answere.
Best regards,
Dennis Meppelink
How do you recommend that landlords cope with the new directive not to discriminate against felons?