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Tenant Screening for Property Managers and Investors

April 18, 2020

How to Screen in the Very Best Tenants

Tenant quality is the lifeblood of property managers and property investors. And by conducting quality tenant screening procedures, you will ensure you’ll acquire a problem free tenant who pays their rent on time.

Screening tenants isn’t just an administrative task and it’s not something you order as you would a pizza. Doing it intelligently does have a dollar value.  At the root of quality tenant screening is choosing a listing site or marketing service to create rentals leads.  See this list of apartment for rent listing sites.

With this, you ensure you get the best rent price possible, grow your property investment returns and attract and sign tenants who will gladly pay it. Sound like a plan you could use?

Tenant screening is a review process used by residential landlords and property managers to evaluate prospective tenants. If you’re new to property management, it’s wise to work with a property manager or landlord with experience who can offer guidance.

A landlord’s greatest fear is a bad tenant. It should be a property investor’s greatest fear too.

Looking for Good Tenants

High quality tenants fulfill every prerequisite of property management – good cash flow, maximum rent and low resistance to rising rent, trouble free tenancy, good communication, no risk of eviction, pleasant relations, lower rate of rental unit damage, and on time payment.

Bad tenants can cause severe legal and financial challenges that could make you leave property investment. We’ll discuss those immense liabilities further below.

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The effort to get the cream of the crop of tenants is well worth it, and the goal of this post is to help you improve your tenant screening skills and knowledge. Your future ROI and financial well being will depend on it.

What is the Goal of Tenant Screening?

In general, tenant screening is used to verify applicants identity, and then aid in choosing tenants who will fulfill the payment terms of the lease and who will care for your property.

Many landlords and property managers will use a process of screening out applicants through discovering characteristics that are undesirable to them or the people in the rental building.

If that’s you, you get yourself in hot water legally if you discriminate for reasons that the law doesn’t consider valid (even though they may be valid to you). As well, they could complain on social media.

Landlords and property managers would be wise to read the landlord and tenancy act for their province, state or country to avoid breaking the law, and thus suffering fines, court appearances, and extra required documentation. Any tenant you disqualify could turn to the courts and Federal Fair Housing Act and claim discrimination.

While big negatives or red flags are important (and applicants will sometimes exaggerate their income and fudge dates on the application), it may be more advantageous to screen applicants based on positives.

And these positive criteria go well beyond a good credit score, stable work and rental history without a criminal record. To optimize your property portfolio performance you need more depth to ensure they will pay the rent consistently despite economic and personal problems.

The issue of vacancy is important, because one month’s vacancy is a financial setback for you and your cashflow.

The more expensive and vulnerable your property is, the greater your need for conscientious, responsible, high income earners with good character.

Optimizing Tenant Selection

Some of the selection process is via good old intuition such as mood, body language, tone of voice, and the type of topics and questions the tenant asks.  Quality tenants are typically relaxed, greet you well. They also ask good questions such as who are the neighbors and what the neighborhood is like, who is the landlord, and don’t ask for a ton of concessions. They want to be sure this is a comfortable place they can live in for many years.

All the information you really need to make great tenant decisions won’t be available on paper. For instance, when you speak with their personal and work references you may get negative feedback or tone of voice that tells you something isn’t right.

You should check for lies and drill down on issues you uncover. Just the process of being vigilant and asking (legally permissable) questions will get you in the right frame of mind.

Overall, your tenant screening process should:

1. look for errors and omissions or deceitfulness
2. check for financial responsibility
3. look for personal conscientiousness and morale character
4. verify income and credit worthiness
5. check for consistent work history
6. investigate and verify self-employment financials
7. screen in the best quality sustainable tenants

Before you can conduct a tenant screening check, you’ll need to have them fill out a rental application form, and sign it to give you permission to conduct the checks.

Screen capture courtesy of

What is Typically Included in Tenant Screening Reports?

There’s no need to include tenant background checks or credit verification checks in your property management software. There are services such as and who provide these reports inexpensively. You can require the tenant to buy the report on themselves.

Background checks, criminal record and credit rating checks are primarily what is covered by their tenant screening service. Please keep in mind that these checks are just the basics of tenant screening, and that the rest is performed by you, or your landlord or property manager.

To help you do the best screening, you’ll want a service that offers any of these 5 services:

  • consumer credit report (from any of Experian, Equifax or Transunion)
  • eviction records search
  • criminal records search
  • sex offender registry search
  • employment verifications

Take a look at a sample report.

Now that you have your basic reports, it’s time to reassess your liabilities in renting out the unit. If the tenant can’t pay their rent, what will happen to your cash flow and financial commitments? Do you know how to evict a bad tenant? Do you have insurance to cover damage they might do? What kind of damage might they do while living in the home?

The above should provide more motivation to take your time with your tenant screening process and look more deeply at the positives, while keeping an eye for red flags.

With all the administration you have to do, it will be nice to have a tenant who likes online solutions. An online property management software can automate a lot of your workload.


See also: Apartment for RentRental Property Management Software |  Renters InsuranceRental Housing Market | How to Reduce Tenant Turnover | Should I Buy or Rent? | Apartment Rental Market San Franciso | Apartment Rental Market Texas | Apartment Rental Market FloridaGrowing Investment Property Revenue | Investment Property Cash Flow | Property Management Scams | Tax Tips for Property Managers | Real Estate Portfolio Tips | Starting a Property Management Business | Property Management Tenant ScreeningHow to Use Property Software |  ManageCasa Property Management Solution

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