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How To Choose the Best Tenants

February 13, 2023

7-Step Process to Choosing Good Tenants

Smart, experienced landlords might agree that tenant quality is the lifeblood of their business.

Effective tenant selection is a key to great tenant management and a profitable business. In effect, landlords must “hire” their future customers. A good process saves your time, gets you focused on priorities, and strengthens your future.

The wisest decision you can make is to develop your own system for attracting and screening applicants, and then choose the most suitable, reliable tenant for your property.  Being on the alert for application fraud is part of the process.

Best Practices May be a Risk

Best practices are okay and tenant rights are important.  However, this is business and you should look at the tenant selection process as a filter enabling you to identify, choose, select or pick the very best tenant for you.  Choose poorly and you open up to a world of trouble legally, financially and personally.

We’re assuming you have a tenant acquisition strategy beginning with well-composed effective ads placed in quality advertising channels for listings to reach the right renter audience.

Manage the Selection Process Yourself

If you’re handing off the complete tenant selection process to 3rd party vendors such as leasing agents, property managers, or Realtors, etc. you run a risk of not getting what you’re hoping for.  A good case is Realtors.

Realtors who manage rentals may be seeking the best future buyers of your property.

That’s a conflict of interest, and does not really represent your best long-term, business rental income interests.

You want long-term, consistent renters — not those considering buying a home and leaving.  And selling your own property is not really in your best interests.  Realtors often hope you’ll give up on renting and sell the home. Commissions are lucrative.  Yet, being a landlord is the best business going.

Leasing agents too might be overly impressed with credit ratings.  However, renters with high credit ratings are actually more likely to terminate their lease when they can buy a home.  And they’re most able to terminate and acquire a better rental somewhere else.


Screening out  churn-generating issues is wise. Consistent paying renters who never leave are the goal.


Benefits of Acquiring Great Tenants

  • lower your long-term tenant acquisition
  • consistent cash flow and lower tenant-related costs
  • more responsible tenants as your customers
  • lower churn and turnover costs (leasing, advertising, inspections, move-ins)
  • better performance reports for your landlord owner clients
  • lower workloads and extra time saved
  • reduce rent collection and eviction costs

Can I Just Automate the Whole Tenant Selection Process?

Automation is the big thing, and software can help, but selection really requires good landlord judgment.

The point of tenant screening is to learn about the applicant — those characteristics that makes them suitable to your requirements as a rental property income business.  These characteristics aren’t used in most screening software. However, there are social media-based tenant screening software.

What’s considered in the selection process:

  • ability to stay employed and earn sufficient income to pay rent continuously
  • ability to get along with neighbors
  • ability and intent to pay the rent (who will make a priority or those who are chronically late)
  • conscientious and responsible in taking care of the property and appliances
  • willing to develop good landlord/tenant communications
  • loyalty and willingness to lease for a long period
  • whether they will appreciate the rental or dislike it until they find another rental
  • whether they will agree to the lease contract (no pets, no smoking, no big parties, additional tenants living in the unit)

7 Ways to Choose Much Better Tenants

Let’s start with 7 easy steps that simplify your selection tasks and result in the best candidate.

1. Have a Clear Idea of your Ideal Tenant. Take an inventory of the characteristics of your best long-term tenants. Read up on the profile of what a good tenant is.

Certainly, you can’t discriminate in who might rent in your units. Yet you should visualize the key characteristics that make them stand out clearly as right for you and your rental property business:

  • good, proven record of paying rent without default, eviction or frequent late payments
  • record of longer-term tenancy
  • indications of being responsible financially and well-behaved
  • a low debt-to-income ratio (especially as unemployment rises and interest rates climb)
  • stable job history and positive interview from their employer about their employment
  • no contradictions and missing information on their application
  • no negative indications from previous landlords and good reasons for issues

2. Don’t Discriminate. Do you discriminate against a single person who would like to rent your house? Do you cancel disabled people right away? If you focus on their character and ability to pay, you can avoid common discrimination charges which can be a devastating mark on your landlord reputation.  Just because they work in the neighborhood doesn’t mean they’ll be at that job for long.  Their religion, family status, and physical limitations might actually make them stay longer, thus reducing your liability to loss.

3. Advertise in the Right Places. Professional marketers know that you are where you get your customers come from.

Use ManageCasa’s rental listing syndication service since it give access to some high quality resources.  Good tenants often come from good sources, after seeing well written ads that only attract the right applicant.

The source is everything. Advertise in upscale apartment rental websites or websites related to the interests of your ideal prospect. Desperate advertising in the wrong places (your rental window or Craigslist) brings the wrong tenants who could be big liabilities.

4. Write Your Apartment Rental Ads Carefully. How you describe and present your rental visually on the rental advertising sites, determines the quality of applicants.  Take the time to advertising your vacancy strategically. It is well worth the result.

Just selling the rental opportunity isn’t enough. You’d be fishing with a big net and catching unwanted prospects.

5. Find Tenants with Good Credit and Income. Tenants with at least earnings of 3 times the rent are best if you can attract them. What is their debt-to-income ratio? Tenants with a solid record for paying bills on time and who can meet emergencies are better. With rents and inflation growing, the tenant’s ability to keep paying is in question. Even one default can create a lot of work for you and result in losses.

Definitely use one of the tenant screening services and assess the types of “negative marks” on their credit history. And of course, check for the usual prior evictions, civil judgments against or bankruptcies as a general indication.

6. Find Tenants with Stable Long Term Rental history and Good Work Record. Anyone who changes jobs frequently raises the likelihood they’ll have to move at some point. Upwardly mobile people with great jobs and income are great to have, but they move on, because they can. Call their past employers to confirm the length of employment, dates, attendance, and exact earnings to compare to what the prospective tenant stated.  Ask them if they intend to move their business in the next year.

7. What their Landlords Said. Call the former landlords and ask about relations with that tenant. Did they pay on time? Did they say they were looking long-term and then canceled their lease after one year? Did they get along with neighbors and establish a lasting situation for themselves? Did they damage anything in the unit?

Drill Down for Real Insight

If you drill down in each of these areas, you’ll be able to make a more solid, reliable decision about who to rent to.  It will help you be more objective, without misconceptions and prejudices.  Those misconceptions might affect the success of your tenant acquisition process.

When rental owners see a property management company is this in-depth about attracting, screening and deciding, they’ll be impressed and you’ll have new owners to serve and see your revenues rise.

After using ManageCasa’s helpful rental listing syndication service, you’re ready to employ your tenant selection process.  Onboard and manage your new tenants professionally and respectfully via their tenant portal.  Modern tenants love their tenant portals, and it makes your work efficient. Win/win outcome!


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See also: Property Management Software | Property Management Guide  How to Write a Rental Ad | Property Management Companies | Credit Checks for Tenants | Check Background on Social Media | Background Checks | Landlord App | California Housing MarketAtlanta Property Management | Rental Property Management Software | Best Cities to Buy Rental PropertyReduce Churn | Property Management Conferences 2023

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