When selecting tenants, having screening criteria is vital. But before we dive in, I need to make something clear: NEVER take the first person who wants to rent your unit without screening. Even if it takes 2 months to find the right person, ALWAYS take the time to screen! Don't be lazy and decide to skip this step, I seriously can't stress this enough. We've done this mistake before thinking "Bah, they look like great people. I'm not worried." Just to realize down the road it was a big mistake!
Ok moving on. Think of tenant screening as applying for a job opening that has minimum qualifications. If you don't have those qualifications, you most likely won't be selected as a candidate right? Simply because you won't be the best fit for the job. Well same thing should apply here when selecting your tenants but in this scenario, you're like the employer. If you select an employee that doesn't meet the minimum qualifications, it doesn't necessarily mean that person will be a bad employee but it could mean that you would have to spend more time training, guiding and babysitting that employee. Who has time for that? Your job as a landlord is to provide a good safe home for someone, not babysit their every move. Having those minimum qualifications in place will help make sure you don't select someone that takes up all of your time and energy.
Our criteria includes:
Everyone over 18 must apply
Total household income should correspond to about 3 times the rent
They must be able to provide proof of that income
References from landlords (previous and present) as well as from their current employer. Minimum of 2 references per person and they must ALL be positive.
Credit history must be clear of any eviction or unpaid judgments from previous landlords.
Depending on the property, we may also only accept non smokers. This is hard to screen for because most will lie on the application but we make it very clear before they even apply that we take this seriously and to think twice about it.
Now I'm not saying the list above will guarantee a flawless tenancy but since we've been screening using this criteria we have noticed a huge difference. Things are smoother.
As for credit checks, we've done a lot of back and fourth with the idea of doing credit checks for a long time and we actually only started doing them not too long ago. We didn't use to do them before because I don't believe this is your deciding factor. We've had tenants with bad credit in the past yet we never had any issues with them because despite what the credit score says, most tenants will still prioritize rent payments over other payments. In my opinion, the only reason to do credit checks is to know if they have a history of evictions or unpaid judgments from previous landlords on their records. If that part comes out clean then there's no point in wasting too much time looking at the rest of the credit history.
I think the biggest component of a good application is the quality of the references. You can predict A LOT about how your tenancy is going to be with this tenant just by having a short conversation on the phone with their present (or previous) landlord and their employer. If it's all sincere praise, (and trust me, you can tell when it's sincere) then this just might be your deciding factor. However if the person on the other end of the line sounds like a rehearsed politician, (you know the type: everything they're saying basically means nothing, they're not being negative but they're not being positive either), then from experience I've found this is the person's way of screaming "READ BETWEEN THE LINES AND SAVE YOURSELF". The goal is to be having the first type of conversation I described. If you want to know which questions to ask when calling for references, contact me via Instagram to get my Previous Landlord Reference form.
Finally, don't EVER deny someone based on race, religious background, sexual orientation or any other form of discrimination. Treat everyone equally! You're just looking to find that simple tenant who wants to move to a new place, will respect the home (and you as a landlord) and will never miss a payment.