The Property Managers Guide to How to Screen Tenants

how to screen tenants

Investment properties turn sour with the wrong tenants. Those who seemed trustworthy and responsible at first could end up doing a 180 after a couple of months.

You need to know how to screen tenants using methods that’ll provide good decision-making information.

It’s your responsibility to vet tenants but what if finding the info is difficult? In this article, we share four helpful tenant screening tips.

Property Management 101: How to Screen Tenants like a Pro

You lose money the longer a property sits on the market. This puts you in a bind because you need someone in, but you don’t want to rush your judgment. A person can seem wonderful, then become a hellion once you give them keys.

Clients come to property managers to avoid the mess of troubling tenants. If you show a consistent record of picking good tenants, you’ll do great in this industry.

Here are a few ways worth applying:

1. Create a Screening “System”

Using a different process when screening each tenant wastes time. Variable screening could omit important info, too. The screening process is repetitive, so creating a “system” streamlines your efforts.

Your process may include:

  • Screening checklist
  • Tenant criteria
  • Background checks
  • Tenant questions
  • Meetups and tours

The systemization of your process creates renter standards. You’ll use this system for each applicant, offering better organization throughout the process.

2. Adhere to the Law

No good will come from rental bias as it could land you in legal troubles. It’s best to approach every application methodically while understanding current rental laws.

  • Learn and respect the Fair Housing Act
  • Know what makes the lease binding
  • Be mindful of your language
  • Document everything

Use standard applications and documentation to avoid legal omissions. This best practice can protect you from discrimination claims.

3. Get What You Need from the Application

You’re looking for a few items:

  • Contacts
  • Financials
  • Lifestyle

The app should include job and landlord references letting you see if they’re quick to bail. Financials often include a credit check or banking balances ensuring renters cover expenses. Plus, pets and job title could reveal a little more about their lifestyle choices.

These items don’t fully define an applicant but will offer decision-making insights. The information can influence your security deposit pricing, too.

4. Get a Credit and Background Check

Order a credit report through one of the main credit agencies. Review the applicant’s credit history and debt.

Red flags could include:

  • Repeat late payments
  • Too many credit inquiries
  • Defaults or bankruptcy

You may use this time to run background checks with Intelius or Instant Checkmate. These reports aren’t cheap but save money forgoing troubling tenants and potential damages.

Look for:

  • Evictions
  • Criminal records
  • Driving records
  • Licenses

Using social media isn’t uncommon in today’s rental environment, either. A glance at social profiles can reveal a person’s lifestyle rather bluntly.

Know Your Boundaries – But Do Your Due Diligence

Renters have legal rights, making screening difficult if you want to know everything. That’s why knowing how to screen tenants is so important. Use what’s available as noted in this guide, staying within reason.

Also, know you’re not right 100% of the time but research is better than blind trust.

Want more? Get in the head of realty agents and learn what they know to become a better property manager. Browse our real estate blog section for tips and tricks.