Define Your Screening Criteria
At a minimum, this should include monthly income, credit score, criminal record and evictions. As a rule of thumb we recommend at least 3.5X the monthly rent in combined monthly gross income. This typically gives the tenant enough "breathing room" to pay their rent each month. You must enforce these criteria consistently and ensure they fully comply with Fair Housing laws. Otherwise you may be committing discriminatory screening practices.
List the Requirements in Your Rental Listing
Save time upfront by clearly listing your criteria in the listing description. This ensures that you attract individuals who fit the criteria. By including a statement like "All applicants are required to submit a rental application, show proof of income that is 3.5X rent and have at least 650 credit score", unqualified applicants will not bother applying.
Pre-screen Over the Phone
After receiving an application, arrange 10 minutes on the phone with the prospect. This is your opportunity to catch any red flags. You can ask questions about their current living situation, reasons for moving, preferred move-in date, monthly income, references from former landlords and employers, and other relevant details. This will guide the next steps.
Get to Know the Tenant at the Property Showing
Take the time to interact with the tenant personally. This face-to-face interaction allows you to gauge their behavior, professionalism, and interest in the property. If a tenant exhibits tardiness, unpreparedness, rudeness, or disinterest, it might be a red flag to reconsider their suitability.
Require a Rental Application
Rental applications formally indicate a tenant's interest in your property. Ensure that you gather necessary information such as employment history, residence history, references, and details regarding smoking, pets, rent payment history, evictions, and bankruptcies. Thoroughly reviewing these applications provides valuable insights into the tenant's background.
Reach Out to a Tenant's Employer
This is a great low-tech and free method to verify their employment status and income. Always find a phone number online for their employer. Requesting pay stubs, W-2 forms, or bank statements can further support income verification but they are easy to falsify today.
Contact Prior Landlords
Previous landlords have valuable information about the prospect's rental history. Inquire about their rent payment punctuality, unit maintenance, cleanliness, and general behavior. You should contact the current and previous landlords to obtain a complete picture of the tenant's rental track record.
Analyze Credit Report and Background Check
Credit reports use previous payment history to predict their future financial responsibility. Set a minimum acceptable score and stick to it. Don't forget to run a background check, no matter how nice they seem. It helps you protect your property and neighbors from criminals. We like this one
Accept or Deny Tenants
After considering all the information you gathered in this checklist, make a decision to accept or deny. Be decisive and immediately communicate to the applicant. If you'd like or if your local laws require it, you may provide some details about why you denied an applicant.