Landlord Basics: Tenant Screening

By
Real Estate Agent

(This post is part of our “Landlord Basics” series, which seeks to help the new landlord / investor understand some of the basics of tenant relations and property management. Click here to view the entire Landlord Basics archive.)

Tenant screening is an important, but often overlooked, responsibility of the investor.  Prospective tenants are not always truthful on their rental applications (assuming one was filled out to begin with!).  Because of this, it is important to check prospective tenant references.  This is a quick and dirty guide to the questions you should ask.

Before you start making phone calls, I suggest doing reverse phone number look ups on all references.  Whitepages.com offers a reverse search.  Generally a business number will come back to the business address, and a landlord will come back to an address as well.  However, you may see some numbers that come back to “disposable” cell phones.  These instantly throw up a red flag to me, because it could easily be someone covering for a prospective tenant.

Rental applications should, at a minimum, include workplace references and previous landlord references.  Some applications also include a personal references section, where prospective tenants can give you the names of a couple friends who will tell you more about them.

When calling a previous landlord, there are several questions you can ask to help you get more information on the tenant.  Some landlords will answer questions over the phone, and some will require a fax and a signed release of information from the tenant.  You  DID include a release at the end of your application, didn’t you?

  • Were there any other people on the tenant’s lease?
  • What was their address? (They should know this relatively quickly, or they could be a bad reference)
  • Was their rent $xxx? (Give an amount other than the correct amount and see if they correct you - otherwise this may be a bad reference!)
  • Is their rent current?
  • Are they being evicted / have they been evicted? (If rent is not current, this may be why they are looking for a new place!)
  • Did they have any pets?
  • Were there any complaints from other tenants?
  • Did they cause any major maintenance issues?
  • Would you rent to this tenant again?

Workplace references are generally going to end up going to the Human Resources department of any larger company, and will have to be sent via fax.  You’ll need the signed release from the application for this fax as well.  Employers are very limited on what they can give you, but you can request more information (such as pay stubs) from the tenant.

  • Is the employee’s address _________? If not, please provide correct address.  (Give address they are currently using on their application.  People tend to update workplace records quickly when they move, so they continue to get paid!)
  • When did the employee start?
  • What is their position?
  • Are they full time or part time?
  • What is their current pay rate? (Check against the application and pay stubs)

Tenant screening can be challenging, but it is important to check out a prospective tenant fully and completely before turning over a very costly asset to them, your rental property!  Not completing a tenant screen can cost thousands in evictions, lost rent, and repairs.  It’s impossible to catch every bad apple, but proper screening will certainly reduce the number of bad apples you have to toss!

Andrew Schultz is a real estate agent and property manager located in the Western New York area.  His articles on real estate investing and property management can be found at www.andrew-schultz.com.

Comments (2)

Sally K. & David L. Hanson
EXP Realty 414-525-0563 - Brookfield, WI
WI Real Estate Agents - Luxury - Divorce

As a very happily ...FORMER landlady...I would add one invaluable thing to your list...don't just call the immediate past landlord...who may well be Uncle Henry...but the landlord prior...or several if you can...in the olden days there used to be services who would do all of the investigation for a small fee that was passed along to the perspective tennant as an application fee. Putting your money where your house is...or will be says a lot about a prospective tenant...

Mar 30, 2009 01:32 AM
John Secor
EXIT Real Estate Results - Winter Springs, FL

Andrew - back in my property manager days the screening process proved vital.  If I discovered just 1 misstatement on the rental/credit app I usually rejected it.  But some good people have bad histories so you still have to go with your gut, and a double deposit.

 

 

 

Mar 30, 2009 01:34 AM