Tips When Doing Tenant Screening

Author: Todd Christiansen | Category: Tenants

As you have probably figured out by now, this site is about evictions (duh!). After reading some of my own posts and taking a hard look at the content, I found that I am omitting an important part of being a landlord.  Tenant screening is maybe one of the most critical parts of having an easy time as a landlord by finding good (or even great) tenants.  I always tell my real estate investors that owning rental properties is easy, managing tenants is the hard part!

If you have a good tenant, life is pretty easy.  Your rent comes in on time, there are no police calls, and you can have a cordial relationship based upon mutual respect.  This type of tenant is generally going to treat your property better and stay longer.  On the other hand, a bad tenant can make being a landlord not only frustrating, but mentally exhausting.  Each month you are wondering if the tenant is going to pay rent on-time (if at all).  I find that my worst paying tenants are also the ones that complain the most and that abuse the property the worst.

Each time I do an eviction for myself, I try to do a post-mortem on the tenant/situation to see where I could have made a different decision that would have made me either not rent to this tenant or kept this situation ending up in an eviction.  I have found that more than 75% of the time, I should not have rented to this tenant if I was being true to my rental policies and would have taken a 2nd look at my renter’s background check.  Unfortunately, I am human.  I have moments of weakness or panic and lower my standards.  I found that when I lowered my standards these tenants turn out not pay rent eventually and end up in eviction.  I should have stuck to my policies and gut.

So let me outline for you what you should be doing to screen your tenants.  And maybe by doing that, I will reinforce to myself what I should be doing (nothing like a little introspection!):

Tenant screening does not start at the time you get a tenant check form.  I believe it starts on how you present the apartment/house for rent.  Is it clean?  Is it fixed up and look like a place you would like to live in?  Are you charging at least the average rent for this type of unit (hopefully a little more).  My experience has shown that tenants that will accept sub-standard places to live will  eventually have late rent payments and may eventually have to be evicted.  They essentially take the attitude that “If my landlord doesn’t care about this place to fix it up decent, then I don’t care either”.  Or they get an attitude that says:  “My landlord is making all this money on me and not fixing up this dump so he won’t miss me not paying him”.

So what does mean for you and your property?  You don’t need to put in stainless steel appliances and granite counter tops in a $600 one bedroom apartment if that is not the norm.  Tenants really care most of about the house being clean and everything working.  Make sure the doors work well, the appliances are in good shape, and the plumbing does not have any issues.  It is really the small items, ultimately that drive a tenant nuts and makes them start to resent the landlord.

Next, take a look at how you are advertising your property for rent.  In your ad, are you showing that you are proud of it?  Or is this unit the red-headed stepchild?  I know that I have some units that I just hate, but I need to put my feelings aside and sell this unit to prospective tenants in my Craigslist ads as best as possible.  Don’t over sell the property, but don’t just slap the ad together.  Think like a real estate agent (we all know that they often stretch their imagination a bit when advertising such as:  cute as a button, nicest house in area, move-in ready, bright and airy).

By doing these prep items, you are setting yourself up to put your best foot forward and hopefully catch a decent tenant that may come through your apartment.  I equate this to fishing.  You can be in the right place in the lake right over a huge fish, but if you pour gasoline on your lure, that fish is never going to bite.  Same thing with tenants.  You may get a great tenant through your apartment, but if it looks terrible, unrepaired, unpainted, and messy, they are most likely going to run the other way (trust me, I have seen in it!).

Once you start getting calls for your apartment, your screening process should start.  I am very protective of my time and I do much of my tenant screening on the phone before I ever book an appointment.  When the tenant calls here are just some items that I am looking at:

  • What phone number are they calling me from?  Is it out of town?  If so, why?  Did they just move into town running from another problem in another state?
  • Is there a lot of noise and kids screaming in the background?  This could be an early indication how they will be when they live in your property.
  • What questions are they asking?  Is it only about the rent or your background check process?
  • How quickly are they looking to move.  While you may get excited about a tenant that wants to move in next week, this could mean they are getting evicted at their current place.
  • I then start to ask them questions, including:
    • Where do you work?  How do you pay rent?
    • Who would be living there?
    • Have you had any evictions?  Do you have a criminal record?
    • How long have you lived where you are at now?  Why are you moving?  Listen for hidden meaning in their answers.  If they say they have lived there only 6 months, that makes me wonder why they need a new place so soon.
    • Will you have any issues paying the security deposit and first month’s rent prior to move in.
  • Only after I am satisfied that they pass my initial tenant verification do I book an appointment.  Even then, I am still screening them.  How easy is it to schedule a time with them?  Strangely, I have found that tenants with no jobs are more difficult to get scheduled than tenants with jobs.  Maybe it is an organizational thing.  I do NOT bend over backwards to schedule a showing.  I do it at reasonable times when it works for me.  I am testing the tenant to be sure they understand who is running the show here (me).

Once the time rolls around for the showing, I watch to see if the tenant is on-time.  It shows if they have simple respect for me and my time.  If they don’t show just common respect now (not that I am some high and mighty person,  but just average respect says you make your appointments), they are not going to follow through and show respect to you by paying rent on time and they are not going to treat you property well.

If they show up on time, I watch them closely on how they act, who else they brought with them (boyfriend, children, etc).  I see how the treat the other person and me; is it with respect and courteous behavior?   Even though I am offering this home for rent, it is still my house and they are a guest in it.

Once it is time to fill out a rental screening application, I let them fill it out initially and then examine it prior to them leaving.  Did they fill it out completely?  It is surprising how many tenants won’t put their current landlord’s phone number on the application or only put down their current apartment information and not the previous one.  I write in any information that is missing and make myself a mental note to drill in on that part of the tenant screening process to see if they were hiding anything.  I have each adult in the property fill out an application.  Lastly, I require the tenants to pay for the screening process.  In my case, I charge $25, which is my cost.  I know some landlords charge a much higher amount (like $75, but I think that may scare away a decent tenant that is only somewhat interested).

I use a tenant screening service here locally to generate the tenant background check report. I have used several different companies and found that most are the same.  They do a credit check, criminal record, and rental history check on each tenant.  This is all done on-line and just takes a couple minutes.  What I get back is a PDF of information which is pretty general.  While I see the tenant’s credit score and what creditors they have and their balance, I don’t see their entire credit history.  The rental history is limited to only if they have ever had an eviction filed against them.  If the landlord just gave them an eviction notice letter, but let them leave and never filed an eviction, there will be no record.  Only criminal records in your state will be displayed unless you pay for a more extensive national criminal search, which can take 48 hours and is done manually.

When reviewing the report, I am looking for anything that is recent or significant.  Do they have a recent eviction on their record?  Do they have anything in collections?  Do the addresses on the report match what they wrote on their application?  You will need to decide where to set the bar for yourself?  Maybe my criteria is too low for your liking (I wouldn’t disagree for most people).  You also have to compare this applicant’s report to others that you may receive in the area of your property.  It is unlikely that someone making $100k per year with an 800 credit score is going to rent a 1 bedroom apartment in a marginal part of your city!

Most landlords fail at this next step.  You need to call the tenant’s last 2 landlords.  You must do everything you can to get in touch with them and if you can’t contact them, consider not renting to this tenant applicant.  You especially want to talk to the tenant’s landlord from 2 properties ago. This landlord has no reason to color the truth about how this tenant was since the tenant is no longer living in their property.  If you can’t get the landlords to call you back, call the tenant applicant and make them track the landlord down and call you.  Any tenant that has left on a good note should have a happy landlord that would be willing to help.

Ask the previous landlord how the tenant paid the rent.  Did they always pay on time?  Were they ever late?  How long did they live in the unit?  Were there any police calls?  Did they give the landlord proper notice to move?  How did they leave the property when they moved out?  Would this landlord rent to this tenant again?  All of these questions can bring up red flags that you need to know about.  Bad answers to any of these questions can lead me to disqualify a tenant.

If everything checks out, call the tenant to schedule some time to get together and sign the lease.  I always have the tenant put some money down to hold the apartment at lease signing.  If we are less than 30 days out, I have them put down the security deposit.  If we are more than that, I will take often about 1/2 of the security deposit.  Again, I am still testing them.  Do they have the money they said they would have?  Do they meet me on-time?

Doing a great job at tenant screening and tenant selection can help reduce or eliminate any need to do evictions.  You will not only be a happier landlord, but owning rental properties will be much easier and rewarding experience.

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