When you're screening potential tenants, it can be difficult to figure out what factors you should take into account. It's tempting to ignore some huge red flags in the interest of having a wider range of tenants to choose from or to give someone who otherwise seems worthwhile a chance. What are the factors you should definitely be paying attention to during a tenant screening?
1. Bad Credit
Weeding out bad credit scores can dramatically shrink your pool of potential tenants, but credit is one of the best ways of determining the quality of an aspiring tenant. Their credit score serves as an at-a-glance view of the tenant's most recent financial interactions, and it lets you know if they've been keeping abreast of paying off debts.
The exact credit score you should be looking for will vary based on the demographics of the area in which your property is located. If it's in a less affluent neighborhood, you may not have the luxury of being too selective about credit scores. In general, your applicants should have a credit score of 620 or higher.
2. Too Many Convictions
If your prospective tenants aren't following the law, you may end up with the police called to your property. The last thing you want as a landlord is to be dragged into a court case, so do your best to make sure that your tenants are following the law. Most professionals advise that your tenants have no more than three convictions in the past five years. Don't take into account things like speeding tickets, but DUIs and driving with a revoked license do count.
3. Insufficient Income
Look for tenants who have an income that's at least two to three times the rent. Any lower than that, and there's a very real chance your tenants will be unable to pay the rent. If your intuition says that a tenant may still be worthwhile to rent to — for instance, if they're looking for another job, or if they're getting a raise soon — you may want to protect yourself by asking for a slightly higher security deposit than you would normally.
4. Prior Evictions
Landlords and property managers know that an eviction is surprisingly difficult, and it's not the sort of thing undertaken lightly. If a tenant has an eviction on his record, especially within the last five years, you know that they've seriously stepped afoul of a previous lease, and that they didn't set things right during the time the landlord allotted them. That's a major strike against them.
5. Wanting to Move in Quickly.
Are your prospective tenants trying to move in within the week? If so, they're either fleeing their old place very quickly, or they're not very good at planning and organizing their lives. Both reasons imply that they may have trouble paying the rent fully and time. Though you may want to give somebody who's down on his luck a chance, think twice.
6. Incomplete Application Forms
It's possible that the tenant didn't understand the form or missed a part of it, so check back to see about getting any missing information. If a prospective tenant refuses outright to fill out some of the form, he may be withholding information from you or impersonating someone and taking steps to not be found out. If prospects can't fill out all the fields on the form that apply to them, look elsewhere.
7. Spotty Employment Records
Is your potential tenant skipping quickly between jobs? If so, he may have trouble paying the rent in the future. A tenant who stays in one job for a period typically has a higher income and a more stable life. If he's often stuck looking for work, he may end up without enough money to pay rent.
8. Living With Friends
This isn't necessarily a red flag, especially if someone's getting back on their feet or is fresh out of school, but many people live with friends or family after an eviction. When you see this on someone's record, take the time to investigate more closely.
9. Bad References
It's very rare to get a bad reference because it's easy for an applicant to ask a friend to pretend to be a previous landlord. (If you catch anyone doing that, of course, that's a huge black mark against him.) Listen closely to what the landlord tells you. If you hear about any evictions or property damage, or if a landlord refused to return the security deposit, beware.
None of these things are necessarily indelible marks against a prospective tenant. You could run into a potential tenant who's had a run of bad luck or one who's working hard to turn things around. If there's only one bad mark on someone's record, everything else that's good may encourage you to give a tenant a chance. In general, though, the factors listed above are good ones to keep your eyes peeled for — and ones that landlords ignore at their own peril.
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