Finding a respectable, trustworthy tenant for a rental property is not an easy feat. As a landlord, you need to be vigilant while you search through your prospective applicants. Otherwise, you could find yourself locked into a yearlong lease with a tenant who trashes your property and never pays the rent on time. Surprisingly, many landlords do not take the time to screen their applicants before they approve a tenant and sign the lease. With the evolving technology that now makes background and credit checks so easily accessible, you have little excuse not to screen your tenants before you allow one to move into your property.
1
Develop a paper application to offer prospective tenants, which should include spaces for each tenant-applicant’s full name, date of birth, current address and Social Security number. Also, include spaces for rental history, employment history, income and personal references. Make sure you disclose you will be using this information to perform a background and/or credit check, and leave a space at the bottom for the applicant’s signature. Have each prospective tenant complete and sign a copy of this application.
2
Conduct an online search on each tenant using your favorite search engine. For now, search only for a tenant’s first and last name in quotes. Look specifically for social networking profiles, blogs and websites in the tenant’s name. If you find any public information, feel free to review it to develop a better sense of the prospective tenant’s character and personality. Remove applicants who are not a suitable match for your property at this phase. Note that some applicants may privatize their online information, or they may not keep any online profiles at all. If this is the case, skip this step.
3
Perform a background check on each prospective tenant. There are dozens of background-checking services available online, some specifically for landlords. You can also conduct your own background check by contacting the local police department or court system where the tenant currently resides to find information about past arrests, criminal charges and other activities, although this will take substantially more time. Note that your state may prohibit you from refusing a prospective tenant for having a criminal background. Check your state landlord/tenancy laws to learn more about what you can and cannot use to form your final decision.
4
Perform a credit check on any applicants who survive the first two phases. You can use just one of the three major credit-reporting bureaus–Experian, Equifax or TransUnion–or use all three for a more complete credit history report. Conversely, you can ask prospective tenants to purchase their own credit report and submit a copy to you for review.
5
Verify each prospective tenant’s income and employment. Ask the tenant for a copy of his last two or three pay stubs, and his last Form W-2 or 1099 to determine how much income he earns and how often he receives his pay. Contact the tenant’s current employer to verify his employment and how long he has worked there.
6
Contact each tenant’s personal references, as listed on the application. Conduct short telephone interviews with each reference and ask questions about the tenant’s personality, character and reliability. For past landlord references, inquire about the tenant’s payment history, how well the tenant kept the unit and the reason why the tenant left the property.
7
Invite each prospective tenant to an in-person interview. You can do this under the guise of a property tour, which may give you even more insight into each applicant’s genuine character, as they will not be aware that you are actively screening them in the process. During the tour/interview, ask questions about why the tenant wants to move, why she chose your property and why she wants to move in. Also pay attention to the tenant’s appearance, personality, behavior and how she interacts with you and others on the premises, such as other established tenants.
Tip
- Remember to screen all tenants using the same, consistent methods and to base your final determinations fairly. If you allow one tenant to pass through the screening process based on a certain criterion, you must allow all others to pass on that fact as well. Unfairly favoring one potential tenant over another is a violation of fair housing laws.
Warning
- Avoid using the information you obtain through the screening process to make decisions for discriminatory purposes. Declining or approving a tenant based on gender, age, skin color, religion, sexuality, marital status, familial status or disabilities is against the law.
