How to Screen Tenants

As any seasoned landlord will tell you, screening tenants is an enormous pain in the (insert anatomy of choice). But time invested in screening tenants is time well spent, because deciding on a tenant is the most important decision a landlord makes.

As an initial aside, it’s worth the reminder that better properties will draw better tenants. Both the neighborhood and the condition/appeal of the house itself are important, so do everything you can to maximize both.

After you’ve done all you can to make the rental property as appealing as possible, you need to market it to make potential tenants aware that it’s available. For some neighborhoods, a free posting online at Craigslist or Roommates.com is enough, but remember that internet marketing reaches a specific demographic; namely, younger, middle & upper class tenants. If internet marketing fails to do the trick, try paying for a classified ad in your local newspaper, magazine, or newsletter.

After you get the phone ringing, take a rental application from each caller, and make sure to collect enough data to pull the applicants’ credit reports (social current addresses, security numbers, and birthdays are a must). Be sure to also take down their employer’s information, to verify their income and employment, and the name and phone number of their current landlord, so you can verify their rental payment history.

When you schedule a time to show the property, schedule an open house, generally over several hours on a weekend (since you do want tenants that work, right?). Never meet tenants individually at the property, since at least half won’t show up, and charge an application fee of about $20, to weed out the not-so-serious and to cover the costs of pulling their credit reports.

Be sure to meet the potential tenants of your rental property in person, and ask them as many questions as you can about their jobs, families, and personal lives. You will, of course, learn a great deal about them, but beyond that you’ll be able to get a feel for them, a gut sense of whether they’ll be a good tenant or not. Always trust these gut feelings, and act on them, because they are overwhelmingly accurate.

When you feel confident you have a reasonable selection of potential tenants, start doing the verification work that your rental application set the stage for: employment/income verification, credit reports, and rental history. Before signing a rental agreement, first visit them at their current residence, to see how they live, and whether they were honest about their pets and children. Lastly, go online in your jurisdiction and look up their names in the public records, to evaluate their litigation history, as some tenants are, for lack of a better word, sue-happy.

Once you and the tenants come to an agreement on terms (rent, security deposit, pets, etc.), make sure you have an airtight rental agreement and the appropriate disclosures to sign with them. Some disclosures, such as lead-based paint disclosures, are legally required, so be sure to adhere to both federal and local landlord – tenant laws when you sign the rental agreement.

As much work as all that sounds, if you do it right the first time, you can look forward to years of consistent rent from friendly, easy-going tenants, instead of evictions, lawsuits, and costly vacancies.