If you’re a landlord seeking a responsible tenant, you’ll want to screen your potential renters to find someone who will pay the rent on time and care for your property. Screening tenants can help avoid future problems such as possible eviction or income loss due to late payments. When you have a process in place, screening tenants becomes straightforward and helps you find a responsible renter. Use the following seven techniques to learn how to screen prospective tenants for rental property.
1. Rental Application
A rental application is one of the best tools for screening tenants. A rental or lease agreement will help you learn about your potential renter’s credit, income, and rental history. The application will have standard features such as asking the individual to access the credit score, proof of income, landlord testimonials, and personal references.
The application should also have pet fees and policies, smoking rules, roommate policies, and whether the renter can sublet or sublease the apartment. Make the application process easy for both you and the renter by using Zumper’s online application. When you’re screening tenants, be sure to follow the non-discriminatory rules set in the federal Fair Housing Act as well as any state and local housing laws.
2. Credit Score and History
Good credit is one of the best signs of a desirable renter. A good credit score ranges from 670 to 799, while 800 and higher is excellent. You can use Zumper to run the check through Experian, which accesses the renter’s credit score. Either you or the potential renter can cover the cost of the credit check.
Credit reports display information with percentages, and the main percentage number you’re looking for is the individual’s payment history. If the potential renter regularly makes late payments on credit cards, he or she may also make late rental payments. If the percentage number for payment is high, it’s a good indication that the renter will pay on time.
Any potential renter will have a distinct credit score. If the individual’s credit score comes in between 580 and 670, and all of the background checks come in positive, you may consider having the individual get a co-signer to help cover the rent if the tenant can’t make timely payments.
3. Proof of Income
Asking for proof of income offers another way to screen potential renters. The renter should have enough income to pay the rent and utilities and have money for living expenses. The standard ratio to determine whether the potential renter can afford an apartment is three times the income to rent.
If your apartment rents for $1,000 per month, the renter should have an income of about $3,000 per month. Ask for pay stubs, either online or in hard copy, from the past two or three months to determine whether the income is consistent and falls into the proper income-to-rent ratio. Be careful when reviewing these, as it’s become increasingly easy to create fake pay stubs.
4. Rental History
When you screen renters, you’ll ask for information regarding their rental history. The rental history should include addresses of the properties, length of occupancy, and landlord contact information. The history will help you determine whether the person stays in one place for a considerable amount of time or moves frequently. Contact past landlords to ask whether the tenant paid rent on time and whether the current landlord is aware that the renter is moving.
5. Background Check
The best way to screen tenants is to run a full background check. While it’s unnecessary to do this step since you can run the credit report and talk to past employers and landlords, the background check dives deeper into the person’s overall history. The background check will verify the potential renter’s identity, show work history, report any evictions, detail any criminal charges, and note whether the individual is on a government surveillance list.
You’ll need permission to run the background check, and you should use an approved consumer reporting agency that follows the Fair Credit Reporting Act guidelines. Some states require the renter, not the landlord, to ask for a background check. Check the laws in your area to make sure you comply with the legal procedure for obtaining a background check. You should receive the report within 24 hours upon request.
6. Personal References
Follow up your screening process by contacting personal references supplied by the potential renter. Ideally, the person will give you employers, co-workers, mentors, or a staff member at an organization for which the renter volunteers. When speaking with references, you want to obtain comments about the person’s character. You want to hear statements that confirm the person shows up to work on time and is reliable and dependable, for example. Be careful not to ask questions that will break privacy laws set by your state’s Landlord and Tenant Act.
7. Interview the Renter
After reviewing the application, collecting the pay stubs, and receiving the credit and background checks, set up an appointment to interview the renter. Review the application and documents as you meet with the individual to verify that the information is correct. Once you’ve decided which applicant to choose for your rental property, send a welcome letter with information on setting up the utilities, confirming other specifics about the property, and verifying the exact move-in date. Then, collect the rent, security deposit, and any additional fees. Make sure to go through a move-in inspection with your new renter.
Screening your potential new renter and obtaining the proper documentation gives you facts to help you determine whether the individual will be a good tenant. When you interview the person, you’ll get to see the individual’s personality and presentation so that you can decide whether you both can have a good tenant-landlord relationship. Following the proper steps of screening tenants will help you find the ideal renter.
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