- Set Clear Rental Criteria: Define income requirements (2.5–3x rent), credit score minimums, and rental history standards. Follow fair housing laws to avoid discrimination.
- Use a Detailed Rental Application: Collect personal info, residence history, income/employment details, and references. Digital tools like TurboTenant streamline this process.
- Run Background and Credit Checks: Use services like RentPrep or SmartMove to verify payment history, criminal records, and evictions.
- Verify Income and Employment: Request pay stubs, tax returns, and contact employers to confirm income stability.
- Contact References: Speak with past landlords to confirm payment history, property care, and behavior.
- Make a Decision: Use consistent criteria to evaluate all applicants, document your process, and notify both accepted and rejected applicants professionally.
Tenant screening ensures you choose renters who protect your investment and pay on time. Follow these steps to minimize risks and avoid costly evictions.
How To Find The Perfect Tenants For Your Rental Property In 8 Easy Steps
Step 1: Define Your Rental Requirements
Setting clear rental criteria from the start ensures you can evaluate applicants consistently and avoid any legal complications related to discrimination.
Key Tenant Criteria
Base your requirements on measurable factors that indicate a tenant’s reliability:
-
Income
Applicants should typically earn 2.5–3 times the monthly rent. Verify this with documents like pay stubs, bank statements, or tax returns. -
Credit and Financial History
Decide on a minimum credit score, review debt-to-income ratios, and check payment histories. -
Rental History
Look at the length of previous tenancies, payment records from prior landlords, property upkeep, and any history of evictions.
"You should think of your tenant screening criteria as a checklist that you go through when reviewing each application."
– Kaycee Miller, Rentec Direct
A clear, consistent checklist like this helps you evaluate every applicant fairly.
Fair Housing Laws: What You Need to Know
It’s essential to follow fair housing laws when setting and applying rental requirements. According to TransUnion SmartMove, over 31,000 housing discrimination cases were reported in 2021 .
Protected Classes
Discrimination is prohibited based on:
- Race or color
- Religion
- National origin
- Sex (including sexual orientation and gender identity)
- Familial status
- Disability
- Age
"Consistency is crucial; applying uneven standards risks legal violations."
– Nolo.com
Tips for Staying Compliant
- Write down your screening criteria before advertising the property.
- Apply the same standards to every applicant.
- Keep records of all decisions during the screening process.
- Have a lawyer review your criteria to ensure they align with local laws.
- Train anyone involved in the screening process.
- Accept the first applicant who meets all your requirements.
Step 2: Create a Strong Rental Application
A well-prepared rental application is a crucial part of tenant screening. It helps you gather all the information needed to make informed decisions about potential renters.
What to Include in the Application
Your rental application should collect key details while staying in line with fair housing laws. Here’s what to include:
-
Personal Information
- Full legal name
- Phone number and email
- Date of birth
- Current address
- Social Security number (optional but useful for background checks)
-
Residence History (Past 3–5 Years)
- Previous addresses
- Monthly rent or mortgage payments
- Landlord contact details
- Reasons for moving
- Move-in and move-out dates
-
Employment and Income Details
- Employer name, job title, and length of employment
- Monthly income and any additional income sources
- Supervisor’s contact information
- Supporting documents for income verification
-
Other Information
- Names of all occupants
- Pet details (if applicable)
- Vehicle information
- References
- Signed consent for background and credit checks
Getting these details upfront simplifies the verification process later.
The Role of Digital Application Tools
Using property management platforms can make the application process faster and more efficient. For instance, TurboTenant found that landlords using their digital tools receive an average of 28 leads per listing .
Here are some benefits of digital applications:
| Feature | Advantage |
|---|---|
| Online Submissions | Applicants can apply instantly through a secure link. |
| Automated Screening | Background and credit checks are integrated into the process. |
| Document Storage | Applications and supporting documents are securely stored in the cloud. |
| Payment Processing | Application fees can be collected directly through the platform. |
"Makes managing multiple rents super easy. Everything is logged and recorded in one spot and accessible for review any time. The platform takes all the headache out of screening tenants." – Jarod, TurboTenant User
Platforms like Renting Well provide tools for digital applications, document storage, tenant tracking, financial record keeping, and automated communication. A thorough application lays the groundwork for more detailed screening in the next steps.
Step 3: Run Background and Credit Checks
Once you’ve gathered applications, it’s time to run background and credit checks to evaluate tenant reliability. As Experian explains, "Landlords check your credit for many of the same reasons lenders do: They want to know if you’re likely to pay your bill on time, based on past payment performance" .
Choose a Screening Service
When picking a screening service, compare costs, features, and how well it integrates with your application process. Here’s a quick breakdown of popular options:
| Service | Cost | Key Features |
|---|---|---|
| RentPrep | $29–$49 | Offers basic and detailed plans; $10 income verification add-on available |
| SmartMove | $25–$47 | Three pricing tiers with varying levels of detail |
| TurboTenant | Free for landlords | Tenants pay $45–$55; integrates with application system |
| Zillow Rental Manager | Free for landlords | Tenants pay $35; includes both credit and background checks |
When deciding, think about factors like data security, compliance with fair housing laws, how quickly reports are delivered, coverage of criminal and rental histories, and how well the service fits into your workflow. After choosing a service, carefully review the reports it generates.
Review Credit and Background Reports
Take a close look at the screening reports, focusing on key details like payment history, eviction records, and criminal background.
Credit Score Insight: In 2020, the average U.S. renter’s credit score was 638. For context, high-end rentals averaged 669, mid-range units 626, and budget-friendly apartments 597 .
What to Check:
- Payment history and current debts
- Eviction records or rental disputes
- Bankruptcy filings or collection accounts
- Results from criminal background checks
- Employment and income verification
Stay Legally Compliant:
- Always get written consent for credit checks
- Provide adverse action notices if rejecting an applicant
- Follow FCRA guidelines
- Use consistent screening criteria for all applicants
Failing to meet these legal requirements can result in fines exceeding $20,000 . To avoid issues, consider consulting legal counsel to review your process.
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Step 4: Check Income and Employment
After completing background and credit checks, the next step is to verify income and employment. This ensures tenants can consistently pay rent. A study found that 93.3% of property owners encountered rental application fraud in the past year , making this step crucial.
Income Documentation
A common rule of thumb is that rent should not exceed 30% of a tenant’s gross monthly income . To confirm income, request several supporting documents:
| Document Type | Purpose | How to Verify |
|---|---|---|
| Pay Stubs | Proof of recent income | Review the last 3 months |
| W-2 Forms | Annual income confirmation | Compare to reported salary |
| Tax Returns | Comprehensive income overview | Check Schedule C for self-employed individuals |
| Bank Statements | Verify income deposits | Match with pay stubs |
For non-traditional income sources, additional documents might be needed:
- Self-employed individuals: Profit and loss statements, 1099 forms
- Government benefits: Social Security award letters, disability statements
- Investment income: Interest and dividend statements
- Court-ordered payments: Alimony or child support records
Employment Verification Steps
Here’s how to confirm employment effectively:
-
Request Written Consent
Always get signed authorization before contacting an employer. This protects you legally and ensures professionalism. -
Contact the Employer Directly
Reach out to the HR department and confirm details such as:- Job title and current employment status
- Length of employment
- Current salary
- Likelihood of continued employment
-
Document All Communications
Follow up phone calls with email confirmations. For example, Padsplit improved their process significantly by using Plaid‘s digital verification system, scaling from dozens of verifications per month to over two thousand .
Red Flags to Watch For
Be alert to these warning signs:
- Income stated doesn’t match documentation
- Frequent job changes without a clear explanation
- Gaps or inconsistencies in work history
- Missing or tampered documents
- Hesitation to provide employer contact details
Once you’ve verified income and employment, you’re ready to move on to checking references in the next step.
Step 5: Contact References
References can provide crucial insights into an applicant’s rental history and behavior.
Previous Landlord Interview Guide
Checking references builds on the earlier steps in the screening process, giving you a clearer picture of tenant reliability.
| Category | Key Questions | Why It Matters |
|---|---|---|
| Payment History | • Was rent paid on time? • What was the monthly rent? • Any missed payments? |
Shows if the tenant is financially dependable. |
| Property Care | • Was the property well-maintained? • Any damages beyond normal wear? • Did they follow property rules? |
Indicates how they treated the property. |
| Behavior | • Any noise complaints? • Issues with neighbors? • Did they follow lease terms? |
Highlights potential behavioral concerns. |
Before reaching out, confirm the landlord’s legitimacy through public records to avoid fraudulent references.
Reference Check Process
Follow these steps to verify and evaluate references effectively:
-
Verify Reference Authenticity
Use public records and property databases to confirm the legitimacy of landlords. Cross-check contact details and document your verification efforts. -
Professional Reference Assessment
When contacting employers, stick to official company channels. Confirm details like:- Employment status
- Length of employment
- Job title and salary range
- General workplace behavior
-
Keep Detailed Records
Use a standardized form to document each reference check. Include:- Date and time of the call
- Name and title of the person contacted
- Key feedback and any concerns raised
- Notes on follow-up actions
When reviewing references, focus on:
- Consistency of information across sources
- How willing references are to share details
- Any gaps or discrepancies in the applicant’s rental history
These reference checks help round out your tenant evaluation and prepare you for the next step in the process.
Step 6: Select Your Tenant
Evaluate All Screening Results
Once you have verified the screening data, it’s time to assess it using clear, objective criteria. A standardized system can help assign importance to key factors:
| Screening Factor | Weight | Key Considerations |
|---|---|---|
| Income Verification | High | Gross monthly income should be at least 3× rent |
| Rental History | High | Look for no evictions and a solid payment history |
| Credit Score | Medium | Shows evidence of financial responsibility |
| Employment History | Medium | Check for job stability and verified income |
| Criminal Background | Medium | Consider the nature and timing of any offenses |
| References | High | Positive feedback from past landlords |
When choosing your tenant, you can use methods like:
- First-Come, First-Served: This straightforward approach helps reduce the risk of discrimination claims .
- Application Strength: Compare applicants against your pre-set criteria .
Interestingly, 84% of landlords cite non-payment as their top concern when selecting tenants . Be sure to document your evaluation process consistently. Once you’ve made your decision, it’s time to notify both the chosen and rejected applicants.
Communicate Your Decision
It’s important to inform all applicants promptly and professionally.
For Approved Tenants:
- Call them first, then follow up with a written confirmation.
- Outline the next steps, including lease signing and move-in details.
- Clarify deposit amounts, payment deadlines, and the schedule for signing the lease.
For Rejected Applicants:
-
Send an adverse action letter that includes:
- A clear statement of your decision.
- Specific reasons for the denial.
- Information about their rights under the Fair Credit Reporting Act.
- Details about the appeal process, if applicable.
-
Keep thorough records, including:
- The criteria used to evaluate applicants.
- Reasons for your decision.
- Copies of all communications.
- Screening results and verification documents.
"To deny a tenant application, you need to let the prospective tenant know that you will not be selecting their application by sending them an adverse action letter. This letter informs the tenant why they are being denied, and if there is any way that their application can be reconsidered."
– Kristi Mergenhagen
With 86% of landlords verifying applicant information , it’s crucial to stay compliant with fair housing laws throughout the process. Keep everything fair and well-documented to ensure transparency and protect yourself legally.
Conclusion
A solid tenant screening process is key to long-term success in property management. It not only protects your investment but also streamlines operations. Digital tools can handle many tasks – like communication, applications, and background checks – helping to maintain consistency and compliance.
Since 90% of landlords in eviction cases hire legal counsel , choosing the right tenants is critical. However, it’s important to combine technology with human oversight. As The New York Times warns:
"hasty, sloppy matches can lead to reports that wrongly label people as deadbeats, criminals or sex offenders"
To ensure success, set clear screening criteria, verify all applicant information, and stick to established procedures. Professional services like Landlord Studio, offering reports starting at $45 , can simplify the process. A structured approach not only builds better tenant relationships but also safeguards your property.