How to Screen a Potential Tenant
As a Cape Cod property management leader, Real Property Management Associates takes the tenant screening process very seriously. To find the ideal tenant for your property and maintain a positive landlord-tenant relationship, screen your tenants as we do in-house.
1. Request an Application
Initially, request that your prospective tenants fill out an application. Through a detailed application, you can easily filter out applicants that will not be a good fit for your property. It also provides all the information you will need to complete the necessary background checks on the applicant. Being proactive in this step ensures that you invest your time and money in the best possible candidate.
Your tenant application should include basic information about the tenant, such as contact details, current income bracket, current and previous employers, and lifestyle choices. Have dedicated sections in your form for the following:
- Applicant’s full name, social security number, date of birth, contact information, driver’s license number, and state of issue. Also, take a copy of the license.
- Information about current and previous addresses, dates of residence, along with contact information for current and former landlords.
- Present income, current and past employment dates, and the names and contact information of current and former employers.
- Banking and credit references for a credit check.
- The contact information of three personal references.
2. Run a Credit Check
Secondly, we recommend that the potential tenants go through a credit check. There may be charges involved if you opt for third-party solutions, but the results will help you make an informed decision. Pass on candidates with outstanding debt, maxed out credit cards, repeated history of late or unpaid dues. If they become your tenant, you’ll most likely find that they are frequently late on rent payments, if they pay at all.
3. Run a Background Check
A thorough background check on all the tenants filters out many potential short-term renters or long-term headaches. Any history of repeated eviction and/or serious criminal records will surely raise a red flag since it is your responsibility to ensure the safety of other tenants, yourself, and the neighbors of your property.
4. Get in Touch with Previous Landlords
If the potential tenant moves successfully through the previous checks, the next thing to do is contact their previous landlord. Look for gaps in landlord history that might raise suspicion, as leaving out contact information for recent landlords could be a bad sign.
A previous landlord will surely provide you with an insight into how the candidate behaved as a tenant for their property. Ask questions that provide you the information you need without invading the potential tenant’s privacy. Some of the following questions are a great way to get a fuller picture of your applicant:
- When and how long did the person rent property from you?
- Did they pay rent on time?
- Were there any complaints from other tenants or neighbors?
- Did they break the lease agreement in any way?
- Did they cause any property damage?
- Why did the lease end?
- Would you rent to this person again?
5. Contact The Tenant’s Employer
Since you want to know if your tenant will pay rent every month and on time, you can get a clearer picture of their financial stability by contacting their current employer. Ask the tenant to give you a recent paycheck as proof and directly call their employer to ask if they currently work there or not. Some employers may be wary of sharing confidential information such as the exact salary and benefits. Try using the following questions:
- Is the person employed by you, and for what length of time?
- Do they earn a fixed salary?
- Do they have a full-time or a part-time job?
- Person Current Approximate Wage
6. Interview the Tenant
Finally, the most effective way to screen a potential tenant is to interview them one-on-one. Once you’ve filtered the prospects down to a manageable number, call each one up for a brief interview. You can ask them a variety of questions related to being a tenant at your property. However, according to the Fair Housing Act, it is imperative to know that you cannot discriminate based on disability, color, religion, sex, family status, national origin, or race.
This step is important as it will be the best way to interact with the person to whom you will lease your property. You need to make sure that they are friendly and respectful towards you and other tenants and comfortable with you as tenants. During the interview, ask the following questions:
- Reason for moving?
- Do they have any pets?
- Do they smoke? Indoors or outside?
- Any other person who might be living with them now or in the future?
- Do they have any friends or relatives who frequently stay over?
- What is their typical workday like? Do they work nights?
- Can they pay the first month’s rent and security deposit before moving in?
Common Screening Mistakes to Avoid
While due diligence is important to the tenant screening process, you also need to know what you cannot legally ask an applicant. Certain questions are off-limits regarding religion, race, arrest record, and more.
Questions and Comments to Avoid
Following are some examples of questions or comments that landlords should avoid under all circumstances.
- You will love the area a lot of [ethnicities] live here.
- Are you Hispanic or white?
- There are not many temples here, so I have no idea whether you will fit in or not.
- I don’t feel safe renting out the first floor to a woman.
- I don’t allow animals on the property, so your pet can’t stay here.
- Are you disabled?
- What’s your first language?
- Where were your parents born?
- Are you pregnant? I don’t want other tenants being disturbed by a baby.
- Which school do your kids go to?
- Do you go to church in the neighborhood?
- Were you arrested?
- Are you divorced?
- What’s your age?
- You will have to pay a high-security deposit because your income is coming from unemployment benefits.
State Tenant Screening Laws
Understanding your state’s tenant screening laws and regulations is essential to avoid costly legal issues. Moreover, you need to be constantly up-to-date when these rules change. A skilled property management company is already aware of state law and has the processes in place for legal compliance. Hiring them to screen and lease your tenants for you takes a huge responsibility off your plate.
For Massachusetts, some legal areas to be aware of are:
- Since August 2014, landlords are not allowed to get any application fee from applicants.
- Security deposits are refundable.
- The security deposit should not be more than one month’s rent.
- Landlords should keep a separate bank account for security deposit funds.
- Background checks are only permitted with signed consent from the applicant(s).
When Tenant Screening Gets Overwhelming
While this comprehensive guide is extensive, it does not include everything that can go into the tenant screening process. If you’re finding that these tasks are burdensome in any way, it’s time to get some help. Contacting an experienced, trusted company like Real Property Management Associates can save you time and money. You also have the added benefit of knowing everything is in legal compliance and exceedingly thorough. Contact us today or call us at 508-509-4485.