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Major Red Flags for Tenant Screening

The best protection a property manager or landlord can take to ensure the longevity of an investment is by conducting excellent tenant screening.

 

Your tenant screening process should determine if your rental applicant has:

  1. A good history of paying bills and rent on time

  2. A good history of following rental rules and laws

  3. Verifiable income that is at least 3X the monthly rent

  4. Verifiable landlord references

 

You can find the answers to these questions by reviewing a rental applicant's credit report to make sure he has a good financial history of paying bills on time. You can determine if an applicant follows the law by checking his criminal record to see if he has been convicted of crime that would put your property or your tenants in danger. You can verify income by asking for pay stubs, bank statements and calling the applicant’s employer. You should also always check in with your applicant’s past landlords to see if they would rent to this applicant again.

 

When you are screening your tenants that are certain red flags to look out for that could up with a denied rental application.

 

Major Red Flags

 

Bad Credit, history of evictions and a negative criminal record are major red flags when approving applicants for your rental property.

 

Bad Credit – Reviewing your applicant's credit history and debt obligation can give you an idea of their ability to pay rent on time, every time.

Eviction History – If your tenant has a history of evictions, you should not let them live in your rental, especially if they have multiple evictions on their eviction report.  Evictions are time consuming and puts you at risk of losing rental income during the process.

Criminal Record – Landlords can legally deny an applicant based on their criminal record if their past crime demonstrates a lack of respect for property or threatens the safety of your current residents.

 

It is important to keep your screening process as objective as possible. Violating Federal Fair Housing laws is a serious crime. You need to treat every applicant the same and never discriminate based on a protected class.

 

Note on using criminal records for Tenant Screening - The U.S. Dept. Housing and Urban Development reissued guidelines regarding the use of criminal records for tenant screening. You cannot deny a rental applicant based on an arrest record. Make sure your tenant screening software does not include arrest records when pulling a criminal record on a rental applicant.

1 comment
  • Patricia Gordon
    Patricia Gordon Thank you for sharing this information. There are really very useful tips. Tenant screening process could take quite a time, but it definitely worth it. Obtaining tenant screening reports must be on landlords priority list because it can help them lessen ...  more
    January 6, 2017
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