How to Properly Screen a Potential Tenant

We all know that potential tenants can be crafty. Any landlord who’s been in the game for long enough has likely experienced this first hand. If you’re a new landlord, you’ve probably heard the horror stories of fully suited tenants who speak well and present themselves professionally who actually turn out to be complete and utter nightmares. Of course by the time you figure this out, it’s too late;the tenant is already living in your space and giving you trouble. So how do you minimize the risk of choosing a bad tenant? How do you tell when someone is simply putting on a show? Understanding the importance of the screening process can give you a significant advantage over a crafty Tenant from Hell.

Important Processes:

First and foremost, you should start by having every potential tenant fill out an application form. There are many sample forms available online, like this one. Alternatively, you can request a sample rental application from your local real estate association, or create your own personalized application using a Microsoft Office template. The application should cover financial information, employment information and personal information. Be sure the application states that a full criminal background check and credit check will be required, and that the tenant is authorizing a check into his or her financial, employment and personal history.

Next, you’ll want to go ahead and run acredit check. You can request it directly from the tenant, asking them to cover the cost, or you can incur the cost yourself; your call. It’s not mandatory that the potential tenant complies, but remember that you are the one in power. If they put up a stink, they are likely trying to hide their bad credit score.

Once the credit check clears out, it’s time for the Background check. Companies like Sterling Talent Solutions are able to offer an employee background check for a fee, and companies like Screening Works are able to offer online tenant screening, background checks and Criminal Reports. Typically, all you’ll need is the tenant’s Social Security number.

Ok, so the credit check and background check look clean. Now what? Now it’s time for you to contact the tenant’s previous landlords as well as their employer. Past landlords will be able to give you insights into whether or not the tenant was timely with their monthly payments and respectful of the property. Contacting the employer will give you peace of mind knowing that the tenant has a steady and reliable source of income.

So the previous landlord gave a glowing testimonial, and the employer has verified that the tenant has steady, reliable work. Great! You’re almost at the finish line. With that said, don’t assumeall is well. Now comes the really important part: Interview the Tenant. Interviewing the tenant will give you insights into the tenants personality, and will allow you to pinpoint any potential deal breakers that the screening process may have missed. Here are some crucial questions to ask:

  1. Are you aware that we will require first and last months’ rent? Will this be an issue? Their answer will allow you to gauge if the tenant understands the arrangement and is OK with the monthly payments.
  2. Why are you moving?If they say something like “my last landlord was horrible!” than you may have a problem tenant on your hands. However, this isn’t a given. Ask follow up questions and use your best judgment
  3. When are you looking to move? The sooner you fill the space, the sooner you gain a revenue stream.
  4. Are you a smoker? You’ll want to lay ground rules for smokers based on your comfort level.
  5. How many vehicles do you have? How frustrating would it be if you finalized everything and then found out that the tenant has more vehicles than you can accommodate?
  6. How long do you intend to rent the property for? Long term is always better for a landlord, as it limits the amount of times you have to go through the process of finding a new tenant.
  7. Do you have any pets? Although a “no pet’s” clause is technically unenforceable, if a pet is a make or break for you, you can choose not to rent to a tenant with pets.
  8. Have you ever been evicted? If the answer is “yes”, that’s a red flag. Still, ask follow up questions. There are always exceptions to the rule.
  9. How many people will be living in the apartment? Overcrowding a space can only result in unwanted wear and tear on your property.
  10. Do you have any questions for me? This will allow you to gauge where the tenants head is at, and the questions they ask can provide insight into how the tenant intends to treat your space.

Following these steps will limit the likelihood of you ending up with a bad tenant. Use your instincts when screening, and if you start to get a bad feeling, don’t be afraid to walk away. There are plenty of potential tenants out there! Ideally, you should hire a management company like CMG Toronto to handle these processes for you. Let the professionals do what they do best!