Congratulations, you’ve advertised your rental property, and people are responding!
But now what? How do you know which potential tenant to pick?
The right tenant can make your life a dream, but a bad tenant can cause you stress, aggravation and money.
The best way to help ensure you’ll have a good tenant is to have a tenant screening process that you use for every potential tenant.
As such, it’s critical to treat all potential tenants the same way, so you don’t violate the Fair Housing Act, which prohibits discrimination on seven protected classes, plus whatever classes your state and locality has.
Questions You Should Ask:
1. When would you like to move?
When you receive a phone call or email from someone interested in renting your property, the first thing you should ask is when they would like to move. You might not want to waste time showing your place to someone who isn’t ready to move for another three months – while your place sits vacant.
If the timing is right, proceed.
2. Can you pay move-in costs upon signing a lease?
Tell this potential tenant that you require first month’s rent and security deposit (or whatever it is that you require) and what that amount will be.
Ask whether they are prepared to pay it upon signing the lease. If they aren’t sure and ask you whether you’ll accept installments, consider this a red flag. You’ll likely have a difficult time getting your full rent on time.
If they say they will have the money, but just “not right now”, then politely move along to the next applicant.
3. Do you have pets?
If you have a no-pet policy, and this person has a pet, you can stop the interview right now. But if you allow pets, you can explain whether you have any restrictions on the types or number of pets allowed.
If you’re both on the same page regarding pets, you’re ready to schedule a showing. But ask first…
4. Will you be able to pass a background and credit check?
Tell the applicant that you can show the place but if they want to rent it, they’ll need to fill out an application and pass a credit and/or background check.
Let them know you require that of all applicants, and tell them what the fee will be (if you will charge one). If they agree to that, go ahead and schedule a showing. If not, say “buh-bye.”
5. Why are you leaving your current place?
If the renter says “my landlord and I just don’t get along”, or “my landlord terminated my lease”, then you should definitely talk to that landlord to find out why. Perhaps the tenant is a slob and the landlord has grown tired of him.
Personally, my favorite answers are
- I just love this neighborhood/house/town, or
- I want to be closer to work/family/friends/etc
Questions You Cannot Ask:
Generally speaking, you cannot ask questions to some potential tenants and not to others. If you ask a question to one applicant, you must ask the same question to all applicants. Likewise, if you require paystubs from all applicants, you must require them of all.
1. National Origin:
You can’t ask in which country an applicant was born. Why? The applicant could interpret this to be a racist question, and it’s against the Fair Housing Act. National Origin is a protected class – not to be confused with Nationality (citizenship) which is not a protected class (except in California and a few other states)
You can’t ask whether the applicant has a service animal. Why? The applicant could interpret this to be a question used to discriminate against the disabled. However, if you have a “no-pet” policy, the only animals that would be allowed in are service animals, and therefore the applicant must prove the animal’s certification status.
You can’t ask how many children an applicant has. Why? The applicant could interpret this question to be discriminatory against familial status. However, you can ask how many occupants the tenant plans on housing, and you can draft the lease as such. As a landlord, you are obligated to follow the occupancy rules in your county.
You can’t ask whether an applicant would like directions to the nearest church. Why? The applicant could assume that you rent only to Christians, which would be discriminatory.
There are more types of questions that would be considered discriminatory, so please familiarize yourself with national and local fair housing laws.
Application and Screening Tips
A background check typically includes eviction history, national and county criminal records and many other public records.
A credit check tells you whether the applicant has a history of late payments, has any accounts that have gone to collection or has filed for bankruptcy. You’ll also see whether the applicant has too much debt for their income.
There are many ways of setting up an application and screening process, but my favorite is to use Cozy.
The application you use should state that the applicant agrees to a background and credit check.
The Perfect Applicant
Ideally, you’ll want a tenant with the following attributes:
- A steady work history
- A salary that’s two to three times more than what you charge for rent
- A decent credit score (more on this below)*
- Past landlords you can contact (ideally not just the current landlord who might say anything to get rid of a bad tenant)
- A good reason for leaving the last residence (being evicted would not be a good reason; wanting more room would)
- No more occupants than what is legal for your area
- Personal references (the employer and a former landlord is what you’re looking for, not the best friend from middle school)
*Regarding a decent credit score: that’s up to you. Here’s a general breakdown:
- 781 to 850: excellent credit, very low risk
- 661 to 780: good credit, low risk
- 601 to 660: average credit, some risk involved
- 501 to 600: poor credit, risky
- 300 to 500: bad credit, high risk
Now that you know what to do and what not to do, happy interviewing!