A Quick Landlord’s Guide to the Tenant Screening Process
With renters making up a whopping 36% of U.S. households, you’d think it would be easier to find the perfect tenant.
Unfortunately, that’s far from the case. Talk to any veteran landlord, and you’ll hear horror stories about unpaid rent, property damage, arguments, court cases, and the dreaded eviction process.
On the flip side, of course, the best tenants can bring you reliable income while taking great care of your property—and they’re worth their weight in gold. But how do you find them during the tenant screening process?
If you’re hoping to find tenants you’ll love, here are a few steps to optimize your screening.
Perform a Pre-Screening
Before you get too far into the tenant screening process, consider putting together a list of basic requirements. Having this list on hand can not only help you write your rental ad, but also help you make quick decisions about unqualified candidates based on a few key factors.
Your pre-screening criteria may include common factors like income and employment, for example. In addition, you’ll want to make decisions about pet ownership, smoking, and prior evictions. An experienced property management team can help you identify key factors here—in addition to taking care of the next steps—so it’s a good idea to consider partnering with one if you haven’t already.
Often, landlords do the pre-screening process by telephone, but it’s also possible to do so in person while showing the property for the first time in the step below. Asking qualifying questions to understand how your potential tenant matches your basic requirements can help you get a sense of whether they’re a good fit.
Show the Property
During the rental showing, make sure to follow up on any questions you haven’t addressed during the pre-screening process. This is also a good opportunity to ensure that you’re both on the same page about things like occupancy dates and the rental term.
In addition, you’ll want to evaluate your prospective tenant’s character and appearance during your meeting. Consider questions like the following:
- Do they have a neat and clean appearance in an attempt to make a good impression?
- Do they behave respectfully and show indications of politeness?
- Do they exaggerate issues with the property to negotiate a better price?
If the prospective tenant knows on the spot whether or not they want to rent your property, you can have them fill out an application. If not, you’ll want to send them an application once they’ve made a decision.
Once you have one or more potential tenants, it’s time to request an application from each. If you don’t already have one, it’s easy to find templates online to help create one.
The application should request a prospect’s personal, employment, and financial details. You should also collect information on their current and previous landlords, prior evictions, and references. Don’t forget to let them know, verbally or in writing, that you’ll be running various checks in tandem with the application.
Perform Basic Checks
If you’re satisfied with a prospect’s pre-screening and application process, it’s time to run a few basic checks. This can help you further eliminate unqualified candidates.
A background check is a crucial way to protect your investment in the long run. You can do this via various online companies that provide detailed reports of what they might of found out about the candidates. Additionally, you can hire an expert private detective to dig deeper into the candidates to check that they will not be a threat to you in the future.
Note, of course, that context is important. If your prospect has a criminal history, consider how recent and severe the crime was when reviewing the information. A decade-old minor offense due to poor judgement, for example, might not be serious enough to disqualify the candidate.
Looking for a minimum credit score can be an easy way to find tenants you can rely on. Again, consider the context: student loan debt or outstanding medical bills aren’t always indicators of a tenant who will miss payments.
Rental History Check
Armed with information about a prospect’s past landlords, make a few calls to check references. This can give you insight into the character and financial fitness of your prospect. Ask about any complaints, late or missing payments, damage, and other common issues.
Though you don’t need to know the ins and outs of a prospect’s employment history, it helps to know if the tenant has a steady income. Contacting the listed employer can make you feel more confident that your new tenant can afford the listed rent.
Select Your New Tenant
Once you’ve checked all of the details, it’s time to pick your new tenant! Consider all of the factors above to figure out which prospects have met all criteria.
If you have multiple qualified candidates, don’t hesitate to trust your gut. Some candidates look good on paper, for example, but have a personality that isn’t a good fit for yours. Others might seem like they’re in the middle of the pack, but you have a strong feeling about their reliability.
After selecting a candidate, call to congratulate them and to start the approval process. At this point, you’ll want to schedule a date and time for the lease signing. Make sure your new tenant knows what to bring, such as identification and the proper amount of money for a deposit.
During the lease signing, take some time to go through the rental agreement with your new tenant once more. Last, but not least, sign the lease and hand the keys over!
Optimize Your Tenant Screening Process
The simple landlord tips above can help you optimize your tenant screening process, which can save you from potential headaches down the road. With the right tenant in place, you’ll feel confident that your property is being well cared for, which offers great peace of mind. As you work to optimize your process, don’t hesitate to reach out to a property management team for help with some or all of these steps!
Want more key landlord tips on finance, business, and real estate? Be sure to take a look at our other content for additional insights.