Real Estate Investing Information-Commercial and Residential Property |E-Personal Finance

Screening Potential Tenants

Feature Main Image

One of the greatest concerns of landlords is that they get quality tenants. Tenants that cause trouble or just do not pay their rent on time are always a source of grief to any landlord. A consistent screening process, however, can reduce much of this grief. Here are some considerations in screening your potential tenant to help eliminate most problems before they arise.

Your Rental Ad

The ad that you place in the paper, or online, should be worded in such a way that potential renters know both what you want and what you do not want. If your ad is clear in the first place, it will let potentially wrong people know that they should not bother wasting their time applying. For instance, if your ad says that you are looking for "responsible, clean renters, with excellent credit history and references," this would eliminate many that have caused trouble in the past. Also, if you don't want pets, make that clear in the ad.

Credit Checks

Landlords do have the right to check the credit references of those who apply. In order to do this, however, the applicant needs to provide you with his or her social security number, along with the name and present address. In addition, permission to access the information needs to be signed by the applicant indicating that he or she is aware that you will be obtaining this information.

Applications

Having your prospective tenants fill out a rental application is a great way to provide consistency in your approach to the selection process. It enables you to actually get the same information about people, and provides a basis for you to equally compare them and come up with the best choice. Your application needs to indicate that you will be getting a credit report and contacting any references given. You also need to state that the application will be the basis for determining their qualifications, and that it needs to be filled out as completely as possible.

A good form of rental application will solicit the following information:

Name and address

Social Security information

Name and contact information of prior landlords of the applicant

Salary

Employer

Past litigation and bankruptcies

Past problems with landlords

For a good sample form of Rental Application, see www.LegalAgreements.com.

By taking an application, however, it is important that you be consistent in how you apply those facts. If you choose on the basis of the best person, then it must be in disregard to all impermissible factors, such as race, color, religion, sex, handicap, familial status, or national origin.

References from Other Landlords

You absolutely should call prior landlords. The reasons for this are obvious. If you do not do it, then you only have yourself to blame when you could have discovered the truth about a person's past rental history from a mere phone call. Since some people may provide phony references, you should check each of them. The prior landlord may also tell you that your proposed renter was the "tenant from hell."

Proof of Identity

It is important to get some kind of proof of an applicant's identity. A simple way to do this is to see their driver's license and make a photocopy of it. The application should have a blank on it for this information.

Background Checks

Getting a background check is also a possibility - especially if you think that something might be wrong. These reports may or may not include past evictions.

Both the credit check and the background report will cost you. In some states, like California, landlords sometimes charge either $25 or $50 as part of the application process. Some landlords may make this part of the first month's rent, but otherwise, it is non-refundable.

Third Party Companies

One of the best ways to screen your rental applicant's is to allow a third party to provide those services for you. Although it will cost some, the unbiased services that they can supply you can make their services invaluable to you. Even better, it can enable you to stay away from lawsuits because that agency should be up to date on the laws that apply.

You can legally reject rental candidates on the basis of bad history in the areas of credit, problems with past landlords, and insufficient income. You cannot, however, reject someone on the basis of race, religion, sex, or children. Some states also have laws that prevent discrimination against someone's sexual orientations, disabilities, and marital status.

 
  • Question & Answers
  • Quizzes
  • Word of the Day

    Loan

    A "loan" is an arrangement where a sum of money is borrowed from one party (the...

  • TIP OF THE DAY

    What is a living trust?

    A living trust is a legal arrangement that, among other things, allows your estate...