How to Screen Tenants

Every landlord hopes to find dream tenants—the kind who pay their rent on time, don’t bother the neighbors, and leave the property in the same good condition they found it in.

Fortunately, finding these dream tenants isn’t simply a matter of luck. The criteria for selecting the right people can be broken down into three simple questions:

  • Can they afford your rent?
  • Do they have a criminal background?
  • Have they caused problems for previous landlords?

The key to answering these questions is using a comprehensive screening process that tells you what you need to know about your applicant. This helps mitigate the risks that landlords face every time they hand over the keys to their property to a virtual stranger.

Fortunately, background screenings can be conducted quickly and easily, so you won’t need to leave your property empty any longer than necessary. Screenings are a simple investment that pays off big time by helping you save money, protect your property, and preserve your peace of mind.

Please note that in order to comply with federal fair housing regulations and avoid accusations of bias, it’s important to subject all applicants to the same screening process. It’s also important to inform applicants about exactly what kind of screenings are being run and what their rights are concerning those screenings.

Working with a reliable and experienced background screening company helps ensure that you treat your renters fairly and are in compliance with the local and federal regulations.

Determine minimum monthly income

First and foremost, it’s important to find out if your prospective tenant can afford the rent you’re asking for. This is as important for your tenant as it is for you. A tenant who commits to rent that they can’t afford risks falling behind on payments. That can cost their landlord money in lost rent and eventual eviction proceedings, and the tenant can also do long-lasting damage to their credit, making it harder for themselves to rent elsewhere.

But how do you determine what a tenant’s minimum income should be? A good rule of thumb is that annual rent should be no more than 30% of the tenant’s gross annual income. Thus, if a prospective tenant earns $100,000 a year, they should not commit to paying more than $33,000 a year, or $2750 a month, in rent.

This rule may not cover all the nuances of a tenant’s financial situation, of course. They may have income from other sources beyond their primary job, or they may have financial obligations (such as child support or credit card debt) that aren’t immediately apparent. A comprehensive tenant screening that includes a credit check can give the landlord a more complete picture of the applicant’s ability to make regular and timely rental payments.

Nonetheless, if a landlord who is renting their property for $2750 a month knows that an annual income of $100,000 is a baseline income, they can save themselves and their prospective tenants time by “prequalifying” candidates before they get to the formal screening process.

Look for eviction history

Evictions can be costly, time-consuming, and stressful. Eviction-related costs often run into thousands of dollars and can take several weeks, meaning lost income in rent as well as anxiety for everyone involved. Renters who’ve been evicted in the past are at high risk of being evicted again in the future, so it pays to find out about their history.

Eviction records stay on file with courts for up to seven years and typically show up within 30 to 60 days. Evictions sometimes show up on credit reports, but don’t always, so don’t count on a credit check alone to give you the information you need.

A nationwide eviction search will check the county records for all of your applicant’s past addresses. It’s the most reliable way of determining if your applicant has been evicted in the past and should be part of every comprehensive tenant screening.

Run a criminal background check

Safety, of course, is a paramount concern for most landlords, who want to be sure that they’re doing everything they can to protect themselves, their property, and their other residents. Failure to adequately check a prospective tenant’s criminal history can lead to a host of problems, including crime, damage to the landlord’s reputation, and negligence lawsuits.

A criminal background screening checks your applicant’s name against local, state, and national criminal and sex offender databases. You’ll get a list of convictions, pending cases, and active warrants that will tell you the nature of any criminal activity, as well as how often and how recently it’s taken place. A criminal background screening can also check your applicant’s name for US and foreign sanctions and watchlists, and for involvement with terrorism, narcotics trafficking, money laundering, and more.

Laws vary from region to region and criminal history alone may not be legal grounds for denying a tenant, so be sure you familiarize yourself with tenant laws for your area. Again, this is an area where an experienced background screening service can ensure that you not only have the information you need but are in full compliance with all regulations.

Determine rental history

Even if your prospective tenant has no previous evictions, it’s still a smart move to check their full rental history. This lets you get a more comprehensive sense of what kind of renter an applicant will be and find out what kind of experience previous landlords have had with them.

A rental history includes:

  • A list of all the applicant’s previous rental addresses
  • Dates lived at each place and amount of rent paid
  • Contact information for the landlord or property manager at the time they lived there
  • Any issues, such as late payments, evictions, broken leases, damaged property, or other problems
  • An assessment of the tenant from previous landlords

Even if it never got as far as eviction, a troubled rental history is a red flag that can help landlords make sound decisions about who they select as tenants.

Of course, some applicants, such as college students, may never have rented before. That shouldn’t automatically disqualify them, but landlords may want to take extra steps to protect themselves. In addition to running a comprehensive tenant screening, for example, landlords can check personal references, ask for a bigger security deposit, or require a co-signer on the lease.

Make your decision

Although no screening process can guarantee that a tenant will be a perfect fit, an applicant’s past is one of the most accurate predictors of future behavior. Knowing if a prospective renter can afford their rent, has a criminal conviction in their past, or has caused problems for other landlords can help you make smart and informed decisions.

With the results of a comprehensive background check in hand, you’ll be in a much stronger position to select the best tenants or make adjustments depending on the circumstances. Bigger deposits, co-signers, and recurring auto-payments can give the landlord some extra assurance in cases where the tenant has a less-than-perfect financial picture but is a good fit otherwise.

A reliable background screening company can help you get the most accurate picture of a tenant’s history, as well as saving you time. To learn more about EagleScreen’s tenant screening services, contact us today.

Recent Post

Subscribe Here

Subscribe to The Works for monthly updates and insight on changing hiring laws and background check best practices.

    What Our Customers Say