In order to find quality tenants, landlords must have a thorough screening process. Just because an applicant seems like they’ll be a good fit, doesn’t mean they actually will be. The only way to be sure that you’re leasing to the most qualified renters is to screen them properly.
Once you’ve run the screening reports, however, it can still be difficult to know what information points to a good tenant. To help make your screening process a little easier, we’ve put together a list of 8 things to look for when screening tenants.
#1 Sufficient Income
This one’s a no-brainer. The best way to know if a tenant will be able to make rent each month is to look at their income. It’s usually recommended that a tenant’s monthly income be 2.5 times their monthly rent payment. Note that this should be after basic living expenses and other financial burdens (like loans, debts, and open accounts) are covered.
#2 Good Credit Score
An applicant’s credit score goes hand-in-hand with their monthly income. The higher their FICO score is, the better the chances are that they’ll be able to consistently make their rent payments. It’s recommended that landlords choose applicants with a credit score of 650 or higher.
#3 Clean Criminal Record
Under the Fair Housing Act, it is considered discriminatory to have a blanket policy of rejecting all applicants with a criminal record. However, landlords are justified in denying applicants who have a criminal history that could put the safety of other tenants or the property at risk. When assessing an applicant’s criminal history, landlords must consider the type of offense, the severity of the offense, and the length of time since the offense occurred.
#4 Stable Employment
Tenants with long-term jobs are not only more likely to consistently pay rent on time, they’re also more likely to renew their lease when the first one expires. Applicants who have a new job every six months are likely unstable and may have issues paying rent in the future.
#5 Positive Rental and Referral History
Your application should ask questions about the applicant’s rental history, as well as require a list of references. If the applicant reports that they moved frequently or have been evicted from prior rentals, there may be stability issues.
You should also call all of the references listed. If they’re past landlords, be sure to ask questions about the applicant’s history of paying rent and respecting their rental units. Although this shouldn’t be a deciding factor, no one knows the renter’s reliability like a past landlord.
#6 Agreement to Lease Terms
As long as your rent price is appropriate for the local market and the property’s condition, applicants shouldn’t try to negotiate the terms of the lease. If an applicant requests a lower rent or security deposit rate, it may be a sign that they are not capable of affording your property.
#7 Open and Honest Communication
Applicants who readily answer your simple questions, like why they’re looking for a new place to live, likely have nothing to hide. If an applicant is evasive or hesitant when answering questions such as whether or not they smoke or have pets, you can usually tell that they’re not being honest. Small things like this can be an indicator that they won’t respect the terms of their lease.
#8 Professional Disposition
At the end of the day, renting a property and signing a lease are business transactions. Quality renters will understand this and treat it as such. They will show up on time to meetings and showings, and they’ll respond promptly to emails and calls. If an applicant is unprofessional from the start, it’s usually safe to move on to other candidates.
Tenant Screening is a Must
Hopefully you’re feeling better prepared to screen tenants in the future. Running reports does you no good if you don’t know what to look for once you have the information. In order to run a successful rental business, screening tenants is a must.