Top 6 Dos and Don’ts of Tenant Screening

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If you’ve attracted a large pool of applicants for your rentals, it can be difficult to decide which are the most qualified. A thorough tenant screening process provides crucial information like credit, criminal, and eviction history that you need to make an informed decision.

Many property management software solutions make tenant screening easy by doing some of the work for you. However, you’ll still be left with the key decisions regarding how and where you get information about potential renters.

Here are six dos and don’ts of tenant screening to help you develop a system for choosing the best tenants for your properties.

Do: Use a Tenant Scoring System

Weighing the risks and benefits of multiple renters can be difficult without an objective measurement. Creating your own tenant scoring system is one way to compare possible renters as fairly as possible.

A tenant scoring system calculates an applicant’s eligibility to rent your properties based on a comprehensive evaluation of all the key variables—income, credit history, criminal record, eviction history, etc. Each variable is assigned a weight by you, depending on which factors are most important to you as a landlord.

Not only are scoring systems individualized to best suit your preferences, but they can help you avoid legal trouble down the line. It’s a good idea to keep numerical scores in your records in case you ever need to justify why you approved one renter but denied another. However, be wary: Some states prohibit housing discrimination based on particular criminal or credit histories. Make sure you discuss relevant laws with your attorney before implementing your new system.

Do: Be Consistent

As a landlord, it’s your job to screen every applicant the same way. This means performing the same background checks, asking the same questions, and requiring the same income verification for every tenant who applies to rent your property.

While it can be tempting to waive an inconvenient or difficult requirement for a pleading tenant, you should never do this. Not only does favoritism pose a legal risk, but you could also end up making an approval you will later regret. It’s best to stick to a predetermined, universally applied policy when screening tenants.

Do: Use Passive Screening

So far, we’ve discussed active tenant screening, which includes any direct searches on a renter after receiving their application. This includes background checks, credit histories, recent pay stubs, and proof of prior housing. Passive screening, on the other hand, occurs naturally when you choose specific demographics to target and design marketing materials to attract the applicants you want.

For example, if you rent properties near a tech hub and want to attract technical professionals, it’s a good idea to build strong online marketing and social media campaigns. Doing so will automatically attract more of the kinds of renters you will end up approving for your rentals.

Don’t: Violate Fair Housing Laws

Even if you think your process is fair, make sure you review and fully understand the Federal Fair Housing Act, as well as any additional laws in your state. By definition, the Fair Housing Act protects “the right to choose housing free from unlawful discrimination” based on race, color, religion, national origin, sex, disability, or familial status. Chances are you aren’t using these factors to consciously discriminate against renters, but be careful of the way you word questions on your application and always document your valid reasoning for denying a renter.

Don’t: Dig Randomly on Social Media

Many landlords ask whether social media should be part of the tenant screening process. The answer—yes and no. Social media can be a great place to find out about an applicant’s behavior patterns or whether they have a secret pet, but be cautious. Remember to define a policy for social media and stick to it, including choosing the one or two sites you’ll check and checking them for all your tenants. For example, you should not do a Twitter deep dive for a renter you’re suspicious of unless you do the same check for every other applicant.

Don’t: Miss the Big Picture

No one metric or set of metrics can tell you everything about a renter. Measures like credit or resident scores and annual income are often explained by more than one factor and should not be treated as an end-all be-all for screening. A prior eviction may be grounds for immediate denial, but a slightly lower credit score may not be. As always, it’s up to you to define what a good tenant looks like.

The Best Tenants are Worth the Effort

Tenant screening might seem tedious, but it’s your primary safeguard against expensive disasters like eviction. A properly screened tenant will pay for your diligence and time in loyalty, on-time payments, and a renewed lease.

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