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The Complete Guide to Tenant Screening

January 03, 2019

When considering someone as a potential tenant, you probably have two main questions in mind:

1.Will this person pay the rent in full and on time?

2. Will this person take care of my property?

Tips on how to screen potential tenants

Of course, it's impossible to predict the future, but there are steps you can take to make an informed decision.

 

Step One: Have the tenant fill out an application.

This is where you gather the information you'll need, like Social Security number, previous addresses, employment history, and so on. You should also have them sign a release of information so that employers and former landlords will talk to you. You might want to ask for a copy of their driver's license or other photo ID to keep with your records.

Don’t want to mess with paper? TenantCloud has you covered. Just enter an email address, and your customized application is sent directly to the prospective tenant. We’ll notify you as soon as the application is complete. Click here to learn more.

Step Two: Run a Credit Check

Past behavior may predict future behavior, and you want to evaluate their sense of financial responsibility. Terry, a landlord in Texas, was concerned when a credit check turned up a $2,000 unpaid account with a utility company. The tenant didn't offer any explanation, and Terry declined to rent to him. On the other hand, Anne, a landlord in Illinois, rented to a woman with bad credit but a high paying job. Anne explained, "She told me that she had gone through a rough patch during a messy divorce and had gotten behind on paying her bills, which negatively affected her credit. I asked her for additional recent pay stubs to verify her current income and decided to give her a chance."

Based on the type of market you are facing, you might have your pick of tenants with great credit scores, or you might have to use your judgment and accept the best of many imperfect applicants.

TenantCloud has partnered with SmartMove credit check by RentPrep. Once click, and you have the credit check done. Go here to get started.

Step Three: Run a Background Check

This step can verify the tenant's Social Security number, previous addresses, and employment history, as well as search for any criminal history they might have. Are there liens against them? Have they been evicted? Are they on a sex offender list? These are all things you want to know before renting to someone.

TenantCloud has several background check options, from basic to platinum. Click here to decide which one is right for you.

Step Four: Verify Current Employment

Anne, the landlord in Illinois, says this step might be the most crucial. "If they have a good-paying job, and it seems like the job is secure, I assume that they are likely to pay their rent."

Once the tenant has signed a release of information, you can attempt to speak to their employer about their wages, their prospects for keeping the job, and even their character. However, even if you provide a signed release, many employers will not risk giving out any personal details aside from verifying dates of employment.

Step Five: Verify Rental History

The best case scenario is that you will speak to the tenant's previous landlord to ask the basic questions:

-Did they pay the rent on time?

-Did they take care of the property?

-Would you rent to them again?

However, just like employers, previous landlords might not want to give out any details other than dates of residence, even if you give them a signed release of information. Just make the call, and hope you get someone who's feeling chatty.

Don’t want to make the calls yourself? You can pay someone else to do it for you. TenantCloud offers this service through RentPrep. Click here to decide which background check option is right for you.

What if your prospective tenant doesn't have any rental history? Maybe they are a college student moving into their first apartment or have moved to your city for a new job and want to rent for a while before they decide where to buy. Again, use what information you do have, such as their credit history and their current employment situation, to make the judgment call.

Finally, you should do a little unofficial sleuthing. Google them. Maybe Google their employers. Search for them on facebook (and hope that their profile isn’t locked down). When they come to look at the property, take a look at their car. Is it filthy or well kept?

You might find some clues about the person that will help you decide if you want to have a business relationship with them for the next 12 months.

Now that you have gathered the information, it's time to look at the whole picture and make a decision. Is this person likely to pay the rent in full and on time, and is he or she likely to take care of your property? Hopefully, the answer is a solid yes to both.

Names and identifying details may have been changed. This is not intended to be a substitute for legal advice. Please do your own research on the applicable laws governing your state.