A screening plan like this one will keep the process clear for everyone involved, generate promising leads, and help find a solid tenant for you. Below, we’ll go into each of the steps on this list of how to screen tenants:
- Income verification
- Prior housing
- Credit/background/eviction checks
Pre-Screening: From listing to a first phone call
Tenant screening begins even before you interact with a potential tenant. First, you’ll want to set boundaries for yourself. Are you comfortable renting to felons or people who have been previously evicted? How do you feel about pets? About smoking?
Next, consider your property listing, which is a big part of tenant screening. Although we recommend your listing include the unit details and amenities, it is important also to list the rental price you’re asking for, and that you will be checking for employment, credit, eviction, and criminal history as part of the housing application process. Being up front about the process is an important part of screening because it deters people who can’t afford the rent or who would fail these tests from applying in the first place, saving you the time of going through with fruitless checks.
But keep your listing simple, and limit it to those necessary details, or else you risk violating moral and legal codes. The Fair Housing Act prohibits discrimination on the basis of race, color, national origin, religion, sex, familial status, or disability. Certain states also prohibit discrimination on the basis of sexual orientation, age, citizenship, pregnancy, and more. The Fair Housing Act also prohibits lying about the availability of property, or funneling the same subgroup of people into the same section of your complex. As a result, be sure to know the specific applications and extensions of the Fair Housing Act in your state, and to confine listings to information about the unit and the cost of rent and application.
During the next part of the early screening process, let’s say your listing has generated some leads and you have a potential tenant contact you. Your next step is a fifteen minute phone call, where you ask the tenant if there’s anything they’d like to know about the listing. Their questions give a good indication of what kind of tenant they’ll be. Are they organized or do they sound desperate? A short email is fine, too, but you learn more about their environment from a phone call.
After answering their questions, ask them a premade list of questions that you ask every single tenant. This pre-screening process lets your potential tenants know that you have standards, which will drive away the bad ones and assure the good ones that they are looking at a healthy place. Good questions to ask include:
- Contact info, including email, so you can send them the link for the application
- How many times have you been evicted? (If the answer isn’t zero, we recommend denying or finding out more information. The more recent the eviction, the scarier.)
- What do you do for a living? (Gives an idea as to the stability of their income)
- What is your monthly income? (If their income isn’t at least three times the rent you’re asking, then this is an instant denial)
- What kind of car do you drive?
- How many times have you had a car repossessed? (Another way to screen for financial stability)
- Have you ever been convicted of a crime?
- Will you be using a co-signer? (Important, and try to find out early if a co-signer will be involved, because you must screen the co-signer like a tenant, for all intents and purposes, and make sure the co-signer knows they are liable for rent if the tenant fails to pay)
Consistency is key. If you fluctuate the questions on the list, or if any of the questions touch into territory protected by the Fair Housing Act, then you can be accused of housing discrimination, so make sure that the questions are the same questions every time and cannot be used to discriminate against a protected class. You do have a right to know how many people are moving in, but not their ages, unless you are running a sanctioned age 55+ community. Even a question as innocent as “Oh, what grade is your son in?” could be grounds for a Fair Housing complaint.
Keep in mind what’s important to you. You want consistent renters who pay their bills on time and get along with neighbors, right? So during this pre-screening call, be friendly but stay to the point—small talk could get you in trouble.
Afterward, take this opportunity to scout their Facebook or LinkedIn. Sure, these kinds of pages may be easily spoofed, but chances are they will tell you something that the tenant would never tell you in person. There is nothing illegal about using social media, but it is critical that, if you review social pages to screen one applicant, you need to follow that same practice for all applicants. Also, be consistent in the things you look for.
If nothing seems fishy so far, go ahead and show them the property. This is another opportunity for pre-screening, on both sides. Did they show up on time? Were they truthful about their car? Were they respectful of others who were in the area? Do they even like the property and want to rent it? We recommend individual showings, so you can keep track of these individual details.
After pre-screening, it’s time for the housing application, and Innago makes this process easier than it’s ever been. Through property management software like Innago, you can embed your housing application within your own website, where it will be linked directly to their screening applications and services. This application will include:
- Contact info
- Income and employment info
- Past residences/ landlords/ evictions
- Social Security number
- Release of information signature (last but certainly not least)
All this information is collected at no cost to you or the potential tenant. Some property management software, Innago included, allows tenants to upload their pay stubs and bank statement. The number one red flag indicating a bad tenant is not enough income, so you’re going to want to make sure they work where they say they work. Give the employer a call, ask to speak to an HR rep or a manager, say you’re calling about so-and-so because they’re applying to rent a property and that you need ten minutes of time to ask questions. Here’s where the release of information signature comes in. Chances are, you’ll have to fax or email this over before HR will talk to you. If so, send it over, schedule the call, and verify that they work there, how long they’ve worked there, what their income is, and what their attendance is like at work.
Likewise, call the landlords they mentioned in their application. Ask whether they have any openings, which will fluster any friends posing as landlords in cahoots with the applicant. Then say you are calling about so-and-so and would like to ask some questions about their past residences. Most landlords will ask you for the release of information, so send that over, then take what they say with a grain of salt. (A current landlord might be itching to get rid of this tenant, and might as a result give a glowing review, so call all the previous ones too.) Ask whether the tenant did live there, whether they were evicted or not, whether they paid rent and utilities on time, and whether they got along with their neighbors.
Criminal, Credit, and Eviction history
Prices can vary for credit, criminal, and eviction reports. What is more, if you want to run them yourself, you may have to go through a fairly rigorous inspection process that is not free. Some newer rental management software permits you to attain reports without all this fuss. Innago, for example, provides this service to you, all-in-one, and bills the housing applicant for you, saving you money. Their service is also structured in such a way that you are not required to go through the verification/inspection process, which saves you a hefty amount of paperwork.
After this, you have a lot of information that could make or break this potential lease. A lot of red flags could pop up here. If the address on the credit rating doesn’t match the current address they gave you, though, don’t worry yet—people move around, and the agencies sometimes lag behind. Just do your due diligence and verify that everybody is being truthful.
The other red flags, though, are serious, whether they’re evictions, convictions, or just bad credit. Note well: if you are denying a housing application because of a credit score, you are legally obligated by the Federal Trade Commission to tell the applicant that their application was denied because of their credit. You must tell them their credit score and contact details of the agency that ran the report. You must also tell the applicant that it was not that credit agency that denied their application, and inform them that they are entitled to a free report from that agency if they ask within 60 days. For other denials, though, you don’t have to go through these hoops.
If their income checks out, they have no evictions, their landlords said they paid on time, and their credit and criminal history is promising, you should have all the information you need to make a decision. But even if your application is not perfect (as is likely the case) the screening process will have gotten you an idea of the kind of risks you’re weighing when considering a tenant. As a last note, we recommend not handing over the keys at a lease signing unless the tenant has paid the safety deposit or first month’s rent already.