Why You Should Screen Your Tenants and How You Should do it

Evictions are very expensive and costly in both time and money. That’s why screening a tenant is one of the most important things you can do. Tenant-friendly states drastically increase the importance of screening a tenant so make sure you have a plan to take care of this!

The steps that I take to screen a tenant are very important to my process. I require that a background and credit check be run by myself instead of the tenant providing it. This allows me to be certain that the report is valid. Since I don’t charge an application fee, I require these fees to be paid by the tenant.

I HIGHLY recommend that you require the applicant to cover all costs to run any checks. I have had quite a few potential tenants get all the way through the process and then decide to not continue for personal reasons. As a landlord, this is a big frustration because there is a lot of time involved in screening a tenant. I am currently working on a new procedure to reduce this occurrence.

My Requirements for a Potential Tenant:

1. Their gross income must be at least three times the rent.
You want your tenant to make at least three times the amount of the rent to reduce the risk of emergencies which  may cause them to be late on their payments or not pay at all.

2. They must clear a Background check.
Personally  this is a very important one for me. I only rent to people with a clear background for liability reasons.

** While there are many programs out there. I personally LOVE cozy for background and credit checks. That is who I use. they let you set up the system so the tenant pay and I order a complete background and credit check***

3. They must clear a credit check.
I use my discretion within the rules of Fair Housing.  I allow Short Sales, Foreclosures and Bankruptcies as long as the issue isn’t on-going.

The key thing to keep in mind is you MUST read the background and credit check. It is not enough to simply look at the score. Here is what too look for when reading a background and credit check.

I Also Require the Following Documents:

• Pay stubs, offer letter or tax returns for those who are self-employed.
• Military Orders (if Applicable).  Remember: The Soldier Sailor Act requires that you allow military members to break their lease with orders. I require orders to prove that they are on orders for at least the length of their lease.

Keep in mind during the screening process that it is very important that you do not discriminate. The best way to avoid this possibility is by having clear cut rules and follow them. This helps take the “heart” out of a business decision and makes it very clear cut.

My husband and I screen everyone over the age of 18. We require all parties to be on the lease and anyone under 18 must be listed as an occupant. This prevents surprises such as unauthorized subleases, extra children (maximum occupancy per room exists in some market), etc. This is especially important because those occupants who are not on a lease are not able to be evicted through a standard eviction proceeding. They become squatters. While you would think that squatters are easier to evict, in many areas they are not.