Experts estimate that there are around 1 million evictions every year in the US. Most of these renters started out as good tenants who — for one reason or another — fell in hard times.
As a landlord, you understand the importance of screening tenants. It’s the only way to find a good tenant and guarantee that the people living on your property are going to take care of it and pay their rent.
Of course, tenant screening is easier said than done. The next time you have a vacant unit to fill, follow these steps for how to screen a tenant.
1. Start by Prescreening
Before a potential tenant fills out a rental application, make sure there are no deal-breakers.
For example, if you don’t allow pets, verify that they’re an animal-free household. If you don’t allow someone with a convicted felony, inform the renters that you’ll be performing a criminal background check.
Another tip is to check their social media accounts. If you see any signs of unruly or disrespectful behavior, that’s a red flag.
2. Check Their Credit History
Once they pass the prescreening and submit their rental application, run a credit report on each applicant. This will tell you whether the person has a history of paying their bills on time.
It also gives you insight into the amount of debt they have, as well as their level of income. Keep an eye out for red flags such as bankruptcy, evictions, missing payments, or unstable employment history.
If you’re having a hard time remembering all these steps, use a tenant screening checklist to ensure you don’t miss anything important.
3. Verify Income, Employment, and Rental History
Next, you need to verify the renter’s employment and income. The general rule of thumb is that their income should be at least three times the monthly rental amount.
There are several ways to verify income, including pay stubs, tax returns, and bank statements. While you’re at it, this is also the time to look at their rental history.
Ask for references and contact previous landlords to see if they had any problems with your applicants. Did they pay their rent on time and take care of the property? Would they feel comfortable renting to them again?
4. Run a Criminal Background Check
The final piece of the puzzle you’ll need is state and federal criminal background checks. This will show you whether the person has any criminal convictions or is a registered sex offender.
One final note: Get familiar with the Federal Fair Housing Rules to ensure you don’t unintentionally violate these laws. For example, it’s illegal to discriminate based on race, gender, age, disability, family status, or sexual orientation.
Now You Know How to Screen a Tenant
If you’ve been wondering how to screen a tenant, we hope this article has been enlightening for you. Screening tenants may seem like a tedious process, but the effort is worth it to ensure you find trustworthy individuals!
Now that you know what to look for when screening tenants, what’s next? Stay right here and keep browsing our blog for other informative articles.