Chapter 8

The Complete Guide to Tenant Screening Summary

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The Complete Guide to Tenant Screening

The Landlord Journey

After finding tenants with an effective online rental listing, the next step is to screen tenants to find the best tenant for your rental property.

Finding quality tenants doesn’t have to be hard. There are over 110 million tenants across the nation. Tenants comprise 35% of the U.S. population. With so many tenants looking for their next rental property, we are confident you will find the right tenant.

Why should you care about tenant screening? 

Tenant screening helps you find a tenant who will reduce your costs. Quality tenants pay rent on time every month, they don’t damage your property, and they don’t create expensive legal headaches.

Plus, with a quality tenant you might renew your rental lease, in which case you will save yourself the additional cost of having to find new tenants.

All of these benefits feed into the amazing benefit of tenant screening- increasing your investment profits.

With this guide, we’ve thoroughly gone through each step of the tenant screening process. Below, we summarized the main points for you:

The Main Takeaways from the Complete Guide to Tenant Screening 

1. How to Screen Tenants

To be successful at tenant screening, you need to have a plan and follow it. It’s common for landlords to skip steps, which is very risky. You might end up renting to someone who never pays rent, who doesn’t have enough income, has a violent criminal history, or was previously evicted.

With a solid process, you don’t have to worry about violating Fair Housing Laws. It’s considered discrimination to require different steps for different tenants. For instance, if one tenant completes a credit report and another doesn’t, then it’s considered unfair discrimination. This is why it’s important to follow a consistent process.

2. Pre-screen Tenants to Save Time

Pre-screening helps you attract quality tenants and dissuade bad tenants. You can pre-screen tenants with your:

Online rental listing

First conversation with the prospective tenant

Rental property showing

You don’t want to waste your time or energy on tenants who aren’t a good fit. Our tips will help you eliminate bad tenants before diving into the nitty gritty of tenant screening: the rental application, tenant references, and credit and background check.

3. Review Rental Applications

The purpose of the rental application is to gather information and ask the right questions. With an online rental application, you can receive all of this information faster. You can even verify income by having your tenant upload a W-2, pay stub, or offer letter.

Our five rental application questions help you determine if a tenant raises any red flags. We also provided advice on rental property co-signers. We recommend having co-signers go through the tenant screening process just like any other applicant.

4. Verify Tenant Income and Employment

Reaching out to employer references informs you if a tenant is responsible, a stable employee, and is a good fit for taking care of your rental property.

We recommend asking an employer how long the tenant has worked at the company, verify his or her salary, and the tenant’s position at the company. When you verify that a tenant has been at a company for awhile, you can be assured that he or she is responsible and will have stable income for the coming year. There’s also a greater chance that he or she will stay in the area, which means a lease renewal may be a great option for you in the long run.

Furthermore, if you find out the tenant provided a fake reference, then you’ve found a red flag and you should decline that applicant.

5. Contact Landlord References

The second tenant reference for you to reach out to is the tenant’s prior landlords. Prior landlords can provide relevant information. They will let you know if a tenant paid rent late, hosted loud parties, damaged the property, or caused any legal headaches.

Reaching out to references also provides you an opportunity to spot red flags.

6. Analyze Tenant Credit Reports and Background Checks

Tenant credit reports provide valuable financial information. With a tenant’s credit score, you can tell how financially responsible he or she is. The credit score is a reflection of making payments on time, having long-standing credit accounts, and not having any financial drama (bankruptcies, foreclosures, etc).

Plus, if you use our reports at Rentalutions, you can see the total amount of expenses a tenant has each month, meaning you can find out if a tenant can afford your rent price.

Tenant background checks also provide valuable insight. If your tenant has a history of violent crime, then you’ll want to decline him or her. We recommend you consider the crime’s severity, when it occurred, the number of crimes, and the legal process that follows those crimes (especially for sex offenders who cannot be close to schools or parks).

7. Accept and Decline Prospective Tenants

Once you’ve gathered all of this information, it’s time to make a decision. Choosing the right tenant can be stressful, but with our guide it doesn’t have to be. We went over:

  • Signs of a good tenant
  • Signs of a troublesome tenant
  • How to accept a tenant
  • How to properly decline a tenant
  • How to move forward with signing a rental agreement

On to the Next Step…Signing a Rental Agreement!

Rental Lease Agreement

Once you’ve accepted a tenant, the next step is signing a rental lease agreement. As you move forward, it’s important to continue the mindset of tenant screening. You should be screening tenants even as you sign the lease.

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Even at the lease-signing stage, a tenant could still raise a red flag. For instance, if he or she wants the keys before paying the first month’s rent or deposit, then it’s not too late for you to choose a different tenant. Even once a tenant lives in your rental property, you are screening him or her for a possible lease renewal.

Writing, customizing, and signing your own rental lease agreement can be difficult. Lawyer fees are expensive and understanding lease terms isn’t easy, which is why we’ve worked hard to improve the leasing process for you.

Our online rental agreement is lawyer-reviewed, state-specific, and easily customized. You can edit your rental agreement and have it signed in clicks, not hours of printings, scanning, and faxing paperwork back and forth.

Stay tuned for our Complete Guide to Rental Leases, where we’ll teach you everything you need to know about drafting, signing, and enforcing a rental lease agreement.


Also published on Medium.

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