How To Screen for The Best Tenants

I have been a landlord since 2019 and learned very early on that one of the best advice a new rental property investor can gain is to get good tenants. It certainly is one of those “make or break” situations: a good tenant makes for a pleasant rental property experience. A horrible tenant is, well…hell. So how do you ensure good tenants end up in your units?

Screen, Screen, Screen.

Easier said than done. In fact, when it comes to screening tenants, you get out what you put in. This is possibly the single most important step in the process of getting started. Many would-be investors have failed to do this and have become one of those horror stories. So how do you screen?

Before I what to screen for, let me describe the goal of screening. When you screen a tenant, your goal is to understand anything and everything you can about them prior to them signing the paper and becoming stewards of your property for the next year. This is a significant risk reduction effort because once you know who they are and how responsible they are, you have a pretty solid understanding of what to expect over the next twelve months.

So here is how you screen.

The Screening Process

As you or your property manager markets the property for good tenants, you will receive inquiries about the property from prospective residents.

Pre-Screening

Include all information useful to tenants in the advertisement (lease term, rent amount, etc.) to limit repetitive conversations. Also be very clear about the qualifications for the resident (income, credit, etc.). Very importantly, please understand that fair housing laws exist and you never want to violate such laws by discriminating against prospective tenants based on any of the protective classes. Very likely, before you have a prospect complete an application, you or your PM would want to know more about them and answer any questions they have. This is called pre-screening.

Application Process

After pre-screening, the potential resident can do an application. My strong recommendation is for an application and background check to be done on each adult applicant. You want to ensure you know who else and who all will be responsible for your place. Ensure the applicant completes all required areas of the application (employment, rental history, pets, etc). The more information you have, the more you can validate to understand the trustworthiness of the applicant.

This is also a good time, before the next step, for the applicant to tell you anything you may need to know about their past (credit, criminal history, etc).

Background Check

For obvious reasons, I strongly suggest a background check which includes credit and criminal history. But please note, simply because an applicant has a spotted past does not mean they will not make good residents. In fact, all of my residents have had spotted pasts. And all have paid rent on time. What is most important about this phase is that you are getting any and all information you need to know now, prior to signing the lease.

Review Feedback with Applicant

As I said earlier, my residents have each had issues in the past: credit, evictions, criminal, etc. In fact, that is often why people need housing. It is hard for them to find homes. What is most important is that they are up front about what happened and that the story checks out. Ideally, you want to know this information before the background check results, because that really speaks to their integrity. In my experience, two of our residents had evictions in the past, and they told me well before the background check. Guess what, they were awesome and were never late on rent! This is why it is important to never, ever skip a background check and good quality discussion with the tenant.

Additional Tips

One Application for each Adult
ALWAYS do a background check
Have high-quality lease review discussion with tenant before signing lease

What If I Have A Property Manager?

Even (no, especially) if you have a property manager, you must ensure that there is a robust screening process. Of course, before I hired a PM, I did my own screening. But even afterwards, I continue to be very involved an any tenant selection. We are talking about your investment that you worked very hard for. Make sure your PM screens well when you are vetting property managers.

I have a gift for you!

Thanks for reading! If you are reading this, you take your investment journey very seriously. To help you, I have created a Tenant Screening Checklist and it is free for you!