Tenant Screening: A Powerful Tool for Landlords

tenantriskverification April 11, 2012 0

By dgh

Tenant Screening is an unavoidable step that landlords cannot skip. Most of the real estate investors we’ve met which can be selling all their property tend to be doing it because they are tired of dealing with tenants. It is the same reason lots of people we know are scared of becoming real estate investors. They have heard horrible stories of bad tenants. And then we totally understand. When we had bad tenants we had many conversations about selling everything we owned and receiving out of the real estate business. Most of the people that contact us with hard to rent properties or bad tenant stories are making one of two mistakes. They’ve got a new property that doesn’t easily attract high quality tenants (or got a new property with bad tenants constantly in place) or they made the best to their tenant buying process and let someone move in that should never have been approved.


We’ve had most of these problems happen to us. We eventually just sold the properties that never attracted the excellent tenants and started following very strict tenant selection criteria. No matter how anxious we are for getting cash coming in on a property we won’t deviate from my criteria. We know how badly that could go so we’ll happily wait another month to discover the right tenant in a property.

And you really know what? It’s working very well! Our tenants aren’t perfect most of our tenants are pretty awesome! They are concerned about the home, manage it, pay their rent by the due date and respond to us whenever we need them. So what on earth do you need to do to find the best tenants from your pool of applicants? Here’s a checklist to help you.

Tenant Screening Checklist

1. Tenant Application with Signed Consent permitting one to do a credit check and reference checks (you might also want to have a separate letter signed because of the prospective tenant authorizing that you verify their income from their employer).

tenant verification

Most states and provinces have application forms that are ok for that area or maybe a local landlord association will most likely have one you may use that is legal for use in your area. We also recommend you’ve got each person over 18 that’s going to live in the home complete this kind and provide you with their consent. And make certain all children and pets that is to be living in the property are named within the application and in the lease (using their birth dates).

2. Confirm their identity by requesting their Provincial or State Issued Drivers License. We usually snap an image of it so we possess a copy for our records. The big thing we look at is the fact their license confirms they are who they say they’re and that the address about the license matches the address they’ve given us and shows up for their credit report!

3. Credit History: The score matters but it is really not just about their credit worthiness. You want to use the credit file to see if they are generally responsible making use of their use of credit, if they have a bunch of people after them for payments, if there are any gaps of their credit history which could be indication of a bigger issue like incarceration. If someone else has filed bankruptcy during the past that doesn’t mean we wouldn’t drive them as a tenant. What’s more important to us really they are doing with their credit and their finances AFTER they’ve filed for bankruptcy. When they have filed bankruptcy before and again are usually in financial trouble then that is a giant red flag for us.

4. Income and Employment Verification: That one is tricky because a job letter is easily forged, many of the larger companies or government affiliated companies is not going to tell you anything about a employee. Even with the written consent of the employee they still is not going to tell you anything except to verify that person works on the company. So this is not always straightforward but here’s a few of the things we caused by get as much information as it can be.

Google the name of the person in quotes. For example “John Pemiuk”. If hundreds of results come in, specify a city. Enter in “John Pemiuk” Burnard. Sometimes you’ll find a mention of the the person on a company website, a LinkedIn Profile, a Facebook Profile or a few other online page that will give you more information even verify the information you have been given. Find a number with the company they work for using the phone book or an online search. We never bother to call the quantity the person gives us to call as there is no way for us to find out that it’s not just a friend’s cellular phone. At least if we find the company number ourselves and acquire to the person who can verify the tenant works there we’re feeling pretty confident that part of the application is true. Ask for any pay stub to verify the income for anyone who is concerned. Keep in mind that painters, servers, along with service professionals may actually collect a lot of their income in cash so their pay stubs will not be a real indicator of the income.

5. Rental History: Basically you need to see how often they move. If they have moved a lot then, unless we have a good reason the moving stop, you can expect a short term tenant. Make sure that you make sure that all the information you could have checks out with where they say they’ve lived. Finally, hunt for gaps. If you discover a previous address is missing or we have a time period where they don’t have an address listed you’ll definitely want to find out why they did not disclose it. Was there a dispute using the landlord? Were they from country? Or were they somewhere they didn’t want you to learn about?

6. Do they have a narrative? This is a BIG one. By far the most troublesome tenants we’ve ever had have been the ones that had big stories right from the beginning. If you have a tenant which has a story listen carefully towards story. Are they blaming people for their situation? Is he or she giving you a big story about their last landlord being evil? Issues asked about gaps inside their employment, missing addresses within their history, or a credit issue as well as the answer has been a story that sounds nearly the same as it’s all someone else’s fault the chances are you want to run quickly inside other direction.

7. Can they do what they appear at first sight going to do? The very best tenants show integrity and accountability before it starts. Do they show up to view the property on schedule and maybe even a little early? Will they deliver the application and deposit when they say they will? Will they return your calls or emails promptly? Tenants that won’t do these things in the beginning will never do these items later on. And tenants who request a bunch of exceptions thus making you work super difficult to convince them to rent from you are usually the first ones to complain, first ones to request for exceptions when they generate a late rent payment and also the first ones to give you a ton of grief. Take a look at how the tenant is behaving and inquire of yourself if this is someone with integrity, accountability and respect for other people? If they do what you say they are going to do you’re on an excellent start!

You may be wondering where references take prescription this list. It isn’t that we’re saying you shouldn’t check references but unfortunately we cannot put much weight in references. If people asked you for references might you give them a nice cross section of people to call or can you give them the best people? And landlord references aren’t usually worth much either. Right or wrong, we only half-heatedly check landlord references. Mostly we only ask for landlord references to find out what the tenants will say. The truth is we’ve found that current landlords never say almost anything to deter you from renting to someone and then we rarely bother to call.

Choice . tenant is bad the existing landlord is not planning to say so – in fact they want them to re-locate! We will call past landlords (which is, the landlords prior to the current one) since they may be more at the start given that the tenant is not trying to leave their premises at this time but we usually do that as a final check, after we’ve been through everything else. By this time we’re pretty positive that the person will make an excellent tenant, and the past landlord usually just verifies that fact. Hopefully by using this checklist you have an easier time screening your next tenants. And with better tenants we’re convinced you’ll be a much happier investor!


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