Ideal place? Got it. Perfect property? Listed. Team of property managers? On board! Long-term admirable tenants? Houston, we have a problem. 

Tenants who pay their rent on time, care about the property, and maintain a healthy relationship with their landlord, do they even exist? Let's keep in mind that we can’t go on a crusade to find them. If a rental property stays vacant for too long, the costs of listing and advertising the vacancy create extra stress for landlords and property owners.

The ideal strategy for choosing the perfect candidate is proper tenant credit and background checks. A credit check is essential to understand potential renter credibility, while a tenant background check, on the other hand, shows what they’re like as a tenant. No matter how badly you need to fill your vacancy, it’s important to take advantage of these steps. This helps mitigate risks associated with property damage, late payments, and tenant disputes, leading to better tenant choice and improved rental property management.

So, how do you find the right tenants? Is online tenant screening necessary for landlords? In this article, we provide some tips for finding good tenants and avoiding turnover.

Understanding the Importance of Tenant Screening

Imagine: You're a landlord with a lovely vacant rental in a peaceful, quiet neighborhood. You receive an application from mister X with a history of disruptive behavior and criminal activities. What are your first thoughts? Without a doubt, concerns about the safety of your property flood your mind. By conducting tenant screening for applicants, you're not only protecting your property, but you are also safeguarding the whole neighbor's community.

Through comprehensive credit checks and rental history checks, landlords can identify applicants who are more likely to keep their rent responsibilities. This proactive practice significantly reduces situations of income loss and property damage, providing a stable rental business.

Reliable tenants are one of the core pillars for property managers and landlords for the successful property management journey. That's why a tenant screening service that includes thorough background, credit, and criminal checks is not a whim but a must. A call to the previous landlord to confirm tenants' rental history is a way to find invaluable insights into their suitability for your property. Easy does it – reach out to the applicant first to get a green light for this call. 

TenantCloud advice: stick to strict tenant screening criteria and use all tools to secure peace of mind and save time. Future you will thank later.

Establishing Screening Criteria

Having high standards is always important in business, especially concerning tenant-landlord relationships. Establishing screening criteria allows you to set clear standards and prevent evictions in the long run.

Take a look at some example guidelines to help you create your unique tenant screening checklist:

  • Credit History: A credit score of 650 or higher is considered good. If a potential tenant’s score is lower, but they meet other requirements and have positive feedback from previous landlords, consider proceeding with the application process. How lucky we are to have property management software that allows renters to build their credit story and even boost it with the help of back rent reporting.
  • Employment History: Verified employment for the last few years. Self-employed applicants can use tax statements as verification.
  • Rental History: Ideally, there should be no past evictions. If evidence of an eviction case arises, pre-screening questions will help you to investigate the exact reason before denying the application.
  • Income Requirement: An applicant’s salary should be greater or equal to three times the monthly rent. Consider other income streams, such as checking account balances and financial statements.
  • Criminal History: No criminal records. Some states prohibit landlords from rejecting rental applications based exclusively on criminal convictions.

You can make your guidelines more detailed and include other exceptions if needed. Make sure your policies comply with the federal Fair Housing Act and other state and local laws.

What Makes an Ideal Tenant

  • Good credit score

Indicate financial responsibility and reduce the risk for the landlord. As mentioned above, applicants with a good credit score are more likely to provide full rent payments throughout the tenancy as well as upfront security deposits. A good score indicates a tenant is financially responsible and won’t put you at risk later. 

  • Takes care of the property 

They do unto others as you would have them do unto you. They notify about maintenance issues and assist when dealing with service professionals. They bet their bottom dollar to treat the rental property as if it were their own. They would not refuse to pay a security deposit, as this is a financial pillow for both landlord and tenant.

  • Pays rent on time

Prompt rental payments are probably one of the most important IT-factors of good tenants. Timely rent payments mean that you will be able to cover mortgage payments and other property-related expenses with no hassle.

  • Follows the rules

Great tenants take lease agreements seriously and follow housing laws and regulations. Your task as a landlord is to clearly define your policies in the rental agreement and have it signed by the tenant.

Red Flags You Shouldn’t Ignore

Understanding positive qualities in applicants and identifying bad qualities is equally important. The eviction process is complicated and long, so an ounce of prevention is worth a pound of cure. Prevent this situation by prioritizing quality tenants over quickly filling a vacant property without thorough screening.

Let's compare and identify tenant screening, including criminal background checks, the rental application process, and the importance of online screening services.

Criminal History

Remember what we were talking about in the very beginning? Practice makes perfect, so considering potential tenants' criminal history is crucial when screening potential tenants to ensure the safety and security of your property and the people around. While some states restrict landlords from rejecting rental applications based on criminal convictions, consider this aspect cautiously.

Rental Application Process

You can never underestimate the rental application process when examining prospective tenants. It involves collecting comprehensive information from applicants, including personal details, rental history, employment status, income verification, and references. By reviewing each applicant's rental application, you can gain valuable insights into their suitability as tenants.

Online Tenant Screening Services 

In today's digital age, online tenant screening services can streamline the screening process, save time, and provide valuable information. The perfect tenant screening services should include background checks, credit checks, employment verification, and rental history reports.

Role of the Fair Housing Act in Tenant Screening

We could go on and on about two things: property management and The Fair Housing Laws. Because they’re THAT important. And yes, now you have the full right to call us nerds. We’re okay with it. 

The Fair Housing Law is a legal framework that protects individuals against discrimination in the tenant screening process. You can think of it as an anti-hero, like Batman, aiming to protect and create a level playing field for everyone involved. It restricts landlords from making decisions based on race, religion, disability, and familial status. Who doesn't want a place where everyone has an equal opportunity to live, regardless of who they are? When people follow the rules of the Fair Housing Act, they help create healthy, diverse, and welcoming rental communities.

If landlords want to avoid legal trouble, they need to follow the rules of the Fair Housing Act. Treat people fairly when they fill out a rental application form and ensure everyone has an equal chance to find a good home. Be careful when deciding who to rent to, and review your tenant application process after reading this article.

Why Use a Tenant Screening Checklist? 

In the rare case you are a detective who also became a landlord, maybe you don't need to rely on something like a screening checklist. However, most landlords can benefit from certain tools that streamline the vetting process. Selecting the right tenant for your rental property is a core mission in the whole property management game, and a tenant screening checklist is your aid in making decisions.

Here's how a tenant screening checklist helps landlords:

  1. Equity
    By employing a checklist, landlords guarantee unbiased treatment of all potential tenants, as each applicant is evaluated against the same criteria. Zero points to the risk of bias or discrimination.
  2. Uniformity
    Landlords can evaluate each prospective tenant and compare their credentials.
  3. Time-efficiency
    With a checklist, tenant screening becomes a structured process. It boosts the quick collection of applicant information and documents, thereby saving time and energy.
  4. Property safeguarding
    With this magic wand, landlords can verify potential tenants' employment status, income, rental history, and creditworthiness. This can minimize the likelihood of renting to individuals unable to meet rent obligations or posing a risk of property damage in the blink of an eye.
  5. Assurance
    At the risk of repeating ourselves a dozen more times,  a complete screening process helps landlords identify reliable and responsible tenants. Your property is entrusted to competent hands and rent payments will be made punctually. 

How to Use a Tenant Screening Checklist in 5 Steps

Here are five steps to effectively use a checklist to properly vet your potential tenants:

Step 1: Let Applicants Know Your Requirements

Be open about your expectations for renters, such as having a stable income, a good rental history, and responsible behavior. This will help applicants decide if they meet your criteria before applying.

Step 2: Give Applicants an Application Form

Provide an application form that requires information like contact details, employment history, and rental references. Now it's even easier for tenants to submit their applications via our brand-new TenantCloud App.

Step 3: Do a Background Check

Once you've got an application in hand, it's time to conduct a background check—with the applicant's approval, of course. This involves verifying their employment, reaching out to previous landlords, and examining their credit history. Don't hesitate to utilize all available resources during this stage; it's essential to avoid future eviction issues. For even deeper insights into your applicant, consider adding a thorough County Criminal Records Search to any TenantCloud tenant screening package

Step 4: Evaluate the Results

Look at the background check results and compare them to your rental criteria. Consider factors like income, rental history, and references to decide if the applicant is a good fit for your property.

Step 5: Follow the Rules

Follow fair housing regulations and local laws throughout the process. Be impartial and don't discriminate based on protected characteristics like race or gender.

You can also consider some additional things when screening prospective tenants, such as meeting them in person to get a better sense of who they are, discussing your property's rules and policies to see if they're willing to comply, and observing how they communicate with you during the process to get an idea of how they'll act as renters.

Closing Notes

TenantCloud offers a bunch of handy tools and services to support you through the process. Here's what you'll have at your fingertips to navigate the tenant screening process confidently and efficiently:

By diving into applicant screening with a checklist in hand, you'll unlock the potential for rental endeavors, paving the way for successful tenancies and fulfilling your property ambitions. Here's to finding your dream tenants and embarking on a journey of rental success!