6 Steps to Check a Prospective Tenant’s Past Rental History

by | BiggerPockets.com

Know who you are placing in to your investment homes. Next time you screen a potential renter, make certain to verify rental history and rental experience with his or her previous landlords. A standard third party background check does not show a person’s attitudes, mental stability, rental payment history, temperament, or kindness. Speaking to a previous or current landlord can have you peering into your potential future working with this applicant. How the applicant dealt with these previous landlords is likely how he/she will treat you and your investment home moving forward.

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6 Steps to Check a Prospective Tenant’s Past Rental History

1. Get in the right mindset.

You should be eager to call landlords for honest references. You have every right to make this request of your applicants and their previous/current landlords. You have nothing to fear. You are an investor approaching another investor for help and possible friendship.

Pro Tip: Aim to make calls to landlords in the beginning of your screening process. Some management companies are slow to reply and may take a few days.

2. Understand the renter’s mindset.

Most applicants will not oppose this request. Some applicants may be hesitant to share previous landlord information with you in fear the landlord will fairly or unfairly provide a negative referral. Occasionally, a prospective renter may give you a seemingly legitimate reason they do not want to provide you with their past landlord’s contact information. No matter the reasoning, push through these objections and make the calls to previous landlords.

Some unimportant reasons a landlord may be upset and provide a poor review of the renter may include:

  • The landlord doesn’t like foreigners.
  • The landlord doesn’t like people coming home after 10:00 p.m.
  • The landlord doesn’t like non-English speakers.
  • The landlord doesn’t like tenants complaining about real issues.
  • The landlord doesn’t like certain opposing political signs on the property.

In short, all the above reasons may be due to a greedy, emotional, unprofessional, or even racist landlord. When speaking to a landlord or management company, aim to understand their professionalism and trustworthiness.

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3. Obtain a Release of Rental History agreement.

A Release of Rental History agreement is a separate agreement or a paragraph in your tenant application. This agreement gives you permission from the applicant to ask questions about the applicant’s rental history from their past/current landlords. Some landlords and management companies require written proof that the applicant agrees to their private information being shared.

Related: The True Cost of a Bad Tenant: Why You CAN’T Afford Not to Screen [With Pics!]

Written consent from your applicant comes in many forms. A simple agreement signed by the applicant will do. If creating your own Release of Rental History agreement, aim to include the following sections:

  • Renter’s personal identifying information (SSN, DOB, driver’s license number)
  • Previous property address and rental amount (account for past two years)
  • Landlord’s contact phone number and details
  • A sentence naming you as authorized to ask questions about applicants
  • Dates and signatures of applicants
  • Copy of driver’s licenses

Personal experience has shown that many landlords will not require any written proof that you are working with the resident. If you confidently state the applicant’s name and why you are calling, many landlords will openly talk to you about these past/current tenants.

Pro Tip: Regardless of whether it is needed or not, obtain a signed Release of Rental History agreement to keep in this applicant’s folder.

4. Understand your questions.

Know what questions you are going to ask once a landlord or management company agrees to speak with you. Create a list of these questions and keep them on file for this potential renter. Ask objective questions that can be answered with either concrete numbers or yes/no answers.

If you do not have a list of questions, consider the following to start:

  1. Between what dates did the tenant live in your building?
  2. What was their rent rate at that time?
  3. Did they make all rent payments?
  4. Did they ever pay late? (How many times and how late?)
  5. Did you have to serve them with any notices?
  6. Did you have to evict them?
  7. Did you offer them a lease renewal?
  8. Has the tenant given notice of their move? If they are breaking a lease, what sort of penalty will be assessed?
  9. Did tenant observe all rules of the property?

Pro Tip: Most investors grade their applicants on honesty, as well as the background history results. For this reason, if someone lies about his/her history or omits major facts, it may be prudent to pass on this applicant. Sometimes actions speak louder than words.

5. Make the call to the landlord.

You: Hello. Is (landlord’s name) available?

Landlord: Yes.

You: My name is ____, and I’m a local real estate investor in the area. You do not know me, but I’m calling because I am working with (applicant’s name), who claims to be a past tenant of yours at (address of rental property owned by this landlord). This address is listed on the Release of Rental Information form. I was calling to hopefully get a reference from you concerning this past renter. If you do not feel comfortable answering a few simple questions, I would be happy to send you over a signed Release of Rental Information agreement first. Either way, I just have a couple of questions for you.

Related: 3 Sneaky (But Legal) Ways to Screen Potential Tenants

At this point, four things may happen…

  • The landlord or management company allows you to ask questions.
  • The landlord or management company asks you to email/fax them the Release of Rental Information agreement signed by the applicant.
  • The landlord or management company ask you to call back when they are in the office.
  • You have the wrong or disconnected number.

Some landlords will be professional and curt, while others will not stop talking about these past tenants and/or other issues in their life. Be polite, take notes, and ask follow-up questions. When speaking to a landlord or management company, aim to understand their professionalism and trustworthiness.

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6. Make a friend and solicit unwanted leads.

Towards the end of this phone call, try to get to know the landlord if possible. Perhaps you can also make an appointment to network over lunch.

Ask questions, such as:

  • Have you been investing in real estate in the area long?
  • Is there anything I can do to help your business?
  • Any specific type of leads you’re looking for?

Before you get off the phone, ask the landlord if they ever come across unwanted leads you may be looking for. Mention you would love an opportunity to call these sellers and work these unwanted leads. If you are able to close any, let them know you would happily pay this investor a generous finder’s fee.

How do you perform background checks on your tenants? Have you had luck forming relationships with other landlords this way?

Let me know your experiences with a comment!

About Author

John Fedro

John Fedro has been investing in manufactured housing since 2002. John now spends his time continuing to build his cash-flow business in multiple states while helping others enjoy the same freedom he has achieved. Find John here.

13 Comments

  1. One more tip MAKE SURE you are talking to a real landlord when checking references. In my market I often find that the references are fraudulent, do a quick search of the owners of previous residences prior to making calls. The names on tax records should match the information provided. This little bit of homework has saved me lots of grief

  2. Yes Dan, you are right on about the owner….however…..I had a tenant who gave her mother as a landlord reference, who actually was her landlord….and she lied to get rid of her!

    Based on my years renting out single family, I take a different tac on references….in no way would I contact a current landlord….some, in fact many, are prone to telling you a glowing account of how this is their favorite tenant and they hate to lose them. Only to discover that they lied to get rid of a turkey tenant as fast as they could. It took me two such instances to learn my lesson (and $5000 in damages from one of those!) Since I’m not renting inner city houses, I will even pass on someone who only has a couple of rentals in their past, or they only ever rented apartments. House custodianship in a suburb is different than an apartment.

    I also pass on prospects that show a series of one year, or shorter rentals. No reference can fix that. I’ve skipped the prior landlord and gone straight to the neighborhood and talked to neighbors…..surprising how much they know that the landlord didn’t.

  3. Screening prospective tenants is 90 percent science and 10 percent luck; that is, tenants don’t always tell the truth, so you need to be as detailed and cunning as possible during your screening process to uncover all relevant information.

    I go through the following process when screening tenants:

    1. Start with an informal conversation using open and closed probes. This is an old sales technique designed to maximize the discovery process. A “closed probe” generally elicits a one-word response: “do you currently rent or own?” An open probe elicits a more detailed response: “what brought you to this area?” It is amazing how much information you can get by executing this technique while employing active listening skills; that is, picking up on key words and sentences while digging deeper with more open probes – all in a “conversational tone.” I had one prospective tenant tell me how he found religion years ago, and lives to serve the Lord, but roughly 10 minutes later, in the same conversation, he told me how he and his friend hang out in the local strip clubs – Hmm, there might be a character flaw with this person. Assuming you are satisfied with the information you’ve collected, then move on to Facebook and social media sources.

    2. I’m not a big Facebook fan, but people tend to be “open” with friends on social media; yes, some use it to project a certain image, but there are still useful tidbits of information to help with tenant screening. I research old photos, conversations, affiliations, books read, movies watched, and any other relevant information in their profile that provides me with an overall flavor of their character. I found out on Facebook that one prospective tenant wrote a book about her life story, which, after reading, was very compelling and relevant to my screening process. She has been a model tenant! Assuming you are satisfied with the information from social media, then I’d move to an application.
    3. I love applications! Shady people generally run when asked to fill out an application, which is a good thing. The application is where the rubber meets the road in terms of specifics (e.g., income, work history, etc…). I also ask two questions before accepting the application: (1) is there anything I need to know before processing this application, and (2) is there anything I need to know before running the credit check? Most people will give an honest response to these two questions, but not all. I had one guy (who managed an apartment complex) tell me everything was fine on his credit report, when in fact it was horrible! I suppose he felt he might get lucky? Nevertheless, the credit check is the fourth and final item needed to make an informed decision on a prospect.
    4. I send the tenant a link to a credit service that requires them to (1) pay a $15.00 fee, and (2) authorize me to view the report. I have accepted many tenants in the 600 + 650 range providing their story is consistent with the report; for example, one prospect told me that his credit score (611) was due to a foreclosure, but everything else was fine. Well, that happened to be true. The only blemish was a foreclosure, all other areas of the report were fine. He stayed with me for three years.

    There are certainly other tools to use when screening prospective tenants, but these four have worked for me in the past. The point is to take it seriously. We all know how much a bad tenant can cost you.

  4. Maggie Tasseron

    John: I’d be interested to know how you confirm that you are indeed speaking with the applicant’s previous landlord. I once had an application from a young woman who said she was working as a caretaker for a much older lady; when I called the number she provided, it was answered by a young black woman who identified herself as the older lady. Needless to say, the applicant’s credit report pretty much confirmed what I had already learned…

    • I use a company calls Tenant Background Search. There are three levels of services:

      1. $19.95 for a “standard tenant screening.”
      2. $22.95 for a “standard plus screening.”
      3. $29.95 for a “comprehensive tenant screening.”

  5. JL Hut

    I used to ask subjective questions of references, like is the applicant clean? most references will say yes but what does that mean? My idea of clean and somebody else idea clean can be completely different. Now I ask specific questions, like on a scale of 1 to 10, 10 being perfection how clean is the applicant? Don’t ask has the applicant ever paid their rent late? Some landlords consider rent paid 5 days late on time. I consider if the rent is due on the first and paid on the second to be late. So I ask the question how many times has the applicant paid late how many days late were they on each payment. Another great question to ask is if they had a vacancy would they rent the past tenant again, why why not?

    • All are great ideas, and techniques I have used for years. The absolute worst tenant I ever had was the Manager of a well-known and respected hotel in our nation’s capital, his wife was nurse. They paid the rent like clockwork and absolutely destroyed my property. I literally had to remodel the kitchen and replace the appliances. They were incredibly dirty besides being destructive. Bottom line, I don’t blame yourself if you do everything right and still have a problem. The best tenants I have had over the years have been single middle-aged men, although I was reluctant to rent to the first one. One technique not yet mentioned is: walking them to their car is a revealing technique. It’s condition is probably representative of how they live. If I have a really good tenant, I don’t raise the rent. It is very expensive to have a vacancy, even for a short period of time. I treat my tenants with respect and respond immediately to any problems. I once had to buy a tenant a new stove. I bought and got it delivered the same day they told me it was a problem, the day before Thanksgiving.

  6. brent Tice

    Lots of great ideas, I like to ask lots of questions and my gut is right 90% of the time. Joan with rent increases I do small raises like 1-2% with good tenants. I believe no raise isn’t a good business decision most of the time, I keep it the same every once in a while though if I have a handy tenant who does simple maintenance and saves me money. Tenants will not get upset with 1-2% because it’s not worth moving. If it is 3-4,% people will get more fired up. An old roommate of mine accepted a 9-10% rent increase when a new owner bought the property and said rents were low.

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