As a rental property owner, there are a few key principles that impact whether or not your properties are profitable. Buying the right property at the right price is obviously one of the first things to consider. But once you have the right property in your portfolio, it becomes a matter of setting the right rent price and finding tenants who respect your property, pay on time, and stick around.

Tenant screening isn’t necessarily fun, but it is necessary. And in order to elevate the quality of your tenants, it’s something you have to take seriously. Thankfully, it’s not rocket science. There are plenty of proven strategies and principles you can use to find better tenants.

Set Clear Rental Criteria

Before you even begin the screening process, it’s important to set clear rental criteria. These are the minimum requirements tenants must meet to qualify for your rental. Having these criteria established ahead of time will help you stay consistent and avoid making emotional or biased decisions.

Some common criteria to consider include:

  • A minimum credit score
  • A steady income that is at least three times the monthly rent
  • A clean rental history with no prior evictions
  • A satisfactory background check with no criminal record

Make sure to communicate your criteria upfront in your rental listing or when first speaking with potential tenants. This transparency helps filter out applicants who don’t meet your basic requirements, saving you time in the screening process.

Use a Detailed Rental Application

The rental application is a critical part of the screening process. A good application will give you the information you need to determine whether a tenant is a good fit for your property. Be sure to ask for detailed information, such as:

  • Full name, contact information, and social security number (for background checks)
  • Employment history and current income
  • Rental history, including previous landlords and addresses
  • References from employers or previous landlords
  • A list of any pets

You may also want to ask why they’re moving, how many people will be living in the rental, whether they have any specific needs or requests for the property, etc. Gathering as much information as possible upfront will help you spot red flags early on.

Verify Income and Employment

One of the most important factors in screening tenants is verifying that they have a stable income and can afford the rent. A good rule of thumb is that a tenant’s monthly income should be at least three times the monthly rent. For example, if you’re renting out a unit for $1,000 per month, the tenant should be earning at least $3,000 per month.

Ask for pay stubs, tax returns, or bank statements to confirm their income. If the applicant is self-employed, request bank statements or tax documents as proof of income. It’s also smart to call their employer to verify their job status and ensure they are currently employed.

Verifying income helps you ensure that the tenant can pay rent consistently and on time, reducing the chances of late payments or financial problems down the road.

Check Credit Reports

A tenant’s credit report is a valuable tool for assessing their financial responsibility. A credit check will give you a clear picture of how the tenant manages debt, whether they have unpaid bills, and how they handle their finances overall. Ideally, you want to see a tenant with a good credit score and no significant red flags, such as collections or bankruptcies.

While a lower credit score doesn’t always mean the tenant will be a bad renter, it’s important to weigh this information with other factors like their income and rental history. If their credit score is lower than you’d like, you may want to ask for a higher security deposit or require a co-signer as extra protection.

Call Previous Landlords

One of the best ways to learn about a potential tenant is by talking to their previous landlords. A quick phone call can give you insights into how the tenant behaved during their previous rental experience. Ask the landlord if the tenant paid rent on time, took care of the property, and followed the terms of the lease. You can also ask whether the landlord would rent to them again.

Be leery of applicants who skip over previous landlord information or only provide contact information for friends or family. This could be a sign that they’ve had issues with landlords in the past and don’t want you to find out.

Perform a Background Check

A thorough background check is an important step in the screening process. A background check will reveal any criminal history the tenant may have, including past convictions, evictions, or lawsuits. While a criminal record doesn’t necessarily disqualify a tenant, it’s something to consider.

Depending on the nature of the offense and how long ago it occurred, you may choose to move forward with the tenant or decline the application. Always check your state and local laws regarding criminal background checks to ensure you’re complying with legal requirements.

Interview the Tenant

In addition to reviewing documents and reports, it’s important to meet or talk with the potential tenant in person or over the phone. This gives you a chance to get a sense of their personality, professionalism, and how they communicate. During the interview, trust your instincts. If something seems off or they are evasive in answering questions, it might be worth reconsidering their application.

Revisit Your Tenant Screening Process

After reading through some of the different strategies and best practices highlighted in this article, it may be helpful to return to the drawing board and revisit your current approach to tenant screening. 

By making a couple of tweaks here and there, you can consistently get better results and generate more cash flow for each of your properties!