When you have a new rental property on the market, how do you go about evaluating potential tenants to fill your occupancy? What steps do you take to identify good tenants and minimize the days your rentals are spent on the market?
Creating a standard tenant screening checklist can help landlords more efficiently navigate and speed up their tenant selection process. It’s a tool that ensures no stones are unturned during the vetting process, empowering landlords with the information they need to make an informed decision about their next renter. With a checklist in hand, landlords can easily evaluate prospective tenants while applying the same criteria across every applicant to ensure fairness.
In this article, we’ll walk you through the benefits of establishing a screening checklist, what to include on your checklist, as well as the laws to keep in mind when screening applicants.
Why you should have a tenant screening checklist
A well-designed tenant screening process ensures every candidate’s application is fairly considered and can turn an otherwise cumbersome process into something easy and repeatable. With a comprehensive tenant screening checklist, landlords can benefit from:
- Consistent evaluation: To avoid accusation of playing favorites or evaluating applicants unfairly, landlords can use checklists to systematically process and review every application. An established checklist helps landlords stick to one consistent process and minimizes the risk of them overlooking critical information about an applicant.
- Legal compliance: In addition to creating a consistent process, screening checklists can help landlords maintain legal compliance with state and federal laws. The Fair Housing Act (FHA), for example, is designed to protect applicants from discrimination and a checklist ensures landlords are using objective criteria to screen prospective tenants.
- Increased efficiency: Checklists are also easily repeatable because all the landlords need to do is follow the steps they’ve already outlined. With a screening checklist in hand, landlords can more quickly identify good tenants and eliminate time otherwise spent creating their screening process from scratch for every new applicant.
Creating your tenant screening checklist
While the exact items on your checklist will vary depending on your specific needs, there are a few important steps that every landlord should have on their list. In this section, we’ll walk you through some of the crucial elements that every checklist should include:
1. Develop your tenant screening criteria
Finding the right tenant is much easier when you have a clear idea of what kind of tenant you’re looking for ahead of your search. Start by setting the criteria against which you’ll evaluate prospective tenants and make it clear to all candidates this is what you’ll use to accept or deny their application.
Baseline criteria can include things like a minimum income requirement, minimum credit score, positive rent payment history, references, and a clean background check. Additionally, establishing this criteria ahead of time can help landlords demonstrate why they rejected an applicant. However, keep in mind that whatever criteria you implement cannot be used to discriminate against prospective tenants.
2. Include your criteria in the listing
Once you’ve got your criteria set and are ready to market your rental property, make sure to include your expectations in the listing description. Communicating your requirements ahead of time can help applicants determine if they should apply for your property and streamline the number of applications you have to review.
For example, if you have a minimum credit score requirement you can include additional details in the listing like: “We require a credit score of 730 and above. If you have a credit score below 730, you may still be accepted; however, we will ask for an increased deposit and/or a cosigner requirement.”
3. Pre-screen prospective tenants
To cut down on unnecessary showings, some landlords will include pre-screening and get to know applicants before the formal application process begins. This initial assessment gives property owners an opportunity to gauge whether or not an applicant meets their required criteria like income levels, credit score, or rental history. Pre-screening questions should gather high-level information about things like income, desired move-in date, pets, roommates, and if someone is willing to complete an application and consent to a credit and background check. While pre-screening does add an extra step to the screening process, it can help you prioritize only the most qualified and serious applicants.
4. Conduct a successful showing
A showing is more than an opportunity to show off the rental to prospective tenants; it’s also a chance for you to evaluate the applicant in person. Getting to meet and talk to applicants face-to-face can help you get a better sense of their personality and what they might be like as a future renter. For example, if a prospect is rude or pushy during the showing, you may want to reconsider their application. On the other hand, someone who shows up on time, asks plenty of questions, and expresses enthusiasm about the property may be worth moving on to the next step of the process.
5. Require and process the rental application
Rental applications are a must-have in your screening process and brings you one step closer to finding the right tenant for your rental property. During this stage, you’ll be able to collect information from applicants including their personal information, employment history, payment history, references, and conduct credit and background checks.
Once you have the completed application in hand, you can start reaching out to an applicant’s references and reviewing their information in depth. If you’re a RentSpree user, we’ll deliver the application and relevant reports including background checks, credit checks, and employment history directly to your inbox.
6. Analyze the credit report and background check
A credit report provides a detailed record of a person’s financial history and credit score, and shows how fiscally responsible the applicant will be. A background check reveals whether or not an applicant has a criminal history or other red flags that indicate they may not be the right tenant. Knowing how to read and interpret these reports will help you identify candidates who can pay the rent on time and will be model tenants.
Keep in mind that some states restrict what criminal records and eviction related proceedings are eligible to share during the screening process. If you’re ready to move forward with your prospective tenants, RentSpree offers intuitive, comprehensive tenant screening to fit all of your rental business needs.
7. Verify employment status
Another crucial piece when evaluating applicants is the employment and income verification step. To authenticate the information provided, consider asking applicants to provide their W2, paystubs, or an offer letter from their current employer.
While most applicants will provide contact information for their employer, you may be restricted by law from reaching out for specific details. In some instances, employers may not be able to provide information like income and may only be able to confirm if someone does or does not work there. Additionally, some applicants like gig workers or freelancers won’t have an employer you can reach out to. For these applications, you may want to consider asking for tax returns, a 1099 or weekly paystubs to verify their income.
8. Contact prior landlords
To get a better sense of who an applicant is as a prospective tenant, reaching out to their previous landlord can help fill in those insights. Before you contact an applicant’s landlord, consider developing a short list of questions to ask such as:
- Did the tenant pay their rent on time?
- What was it like managing this tenant?
- How did this tenant get along with your other tenants?
- Would you consider renting to this tenant again?
9. Make your final decision
Now that you’ve conducted a thorough examination of every possible candidate, it’s time to decide who you’ll accept and which applicants to deny. Make sure you lock down your ideal tenant before rejecting the other applicants, just in case your first choice declines your offer.
If you’re rejecting someone based on information found in their consumer reports, such as a credit report, you’ll need to properly deny them via an adverse action notification as dictated by the Fair Credit Reporting Act (FCRA). As you consider who to accept and who to deny, keep in mind the many illegal reasons why you cannot reject a rental application as outlined by the Fair Housing Act.
10. Follow up with your new tenant
With your next tenant secured, it’s time to onboard them and get them ready for their move in date. This includes sending tenants the lease to be signed as well as any additional documents, such as information on setting up their utilities and the move-in inspection checklist. This is also an opportunity to let new tenants set up their rent payment methods, whether it’s through a third-party solution or RentSpree’s own Rent Payment tool.
Fair Housing Act: What all landlords need to know
As you develop your own tenant screening checklist, it’s important to keep in mind what federal and state laws apply to your rental business.
The Fair Housing Act is one such law that prohibits discrimination in the rental application process to ensure everyone is fairly considered. There are seven protected classes listed in the FHA and a landlord cannot reject an applicant, deny housing, or set different terms and conditions based on one of these criteria. The seven classes listed include:
- National Origin
- Familial Status
Whether you’re a seasoned landlord or just starting out in your rental journey, it’s worth it to invest the time to brush up on the FHA and additional protections that directly impact your screening processes.
A consistent screening checklist is a recipe for success
Successful tenant screening starts with a clear understanding of how you’re going to achieve your goals and pre-established criteria. With a screening checklist in hand, you’ll be able to quickly and efficiently find good tenants to fill your vacancies in no time.
As you build out your criteria and screening process, remember that your checklist should be straightforward, repeatable, and fair. Ready to find the right tenant for your next rental property? Check out RentSpree’s comprehensive tenant screening tool to get started today.