Newbie landlord here, looking for some tenant screening advice

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Newbie landlord here, looking for some tenant screening advice

John Matarazzo
Member since 2020 · 27 posts · 9 votes

Hi all,

I've owned my property for 8 months now but now having my first tenant turnover. A few questions,

- Brandon Turner's property management book mentions on the rental application asking for the prospective tenant's checking and savings account balance. This seems a bit nosy to me but the logic makes sense. Is anyone else doing this?

- In the book, he also mentions sending a reference form to the prospective tenant's previous landlords to get information. Does anyone do this? If so how do you go about it? Sending a form seems impractical, I can't see myself taking the time to prioritize filling out a form I get from some random landlord.

- What do you require before showing the property to prospective tenants? Filling a pre-screening form, actual application or anything else? Obviously want to balance not wasting my time along with not being perceived as discriminating against anyone.

- I've been using the avail software and so far enjoying it. Has anyone used the rental listing and application feature yet? Any feedback or tips appreciated.

Thanks

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Greg M.
Rental Property Investor · Los Angeles, CA · Member since 2017 · 2k+ posts · 5k+ votes
4y

You have the right to be nosy. You're turning over an asset valued at hundreds of thousands of dollars to a person you don't know, in the hopes that they pay and don't trash the place. 

My application asks for checking & savings account bank name, account number, and balance. Also asks for two largest debts. I like to see if they are honest with the debts when I compare to their credit report.

I would not send a paper form to the previous landlord. Pick up the phone and call them. You're much more likely to have them say something negative about the person on a phone call than in written and signed form. 

I'll show the unit to anyone, I'll be there from 10AM-1PM this Saturday. For an individual showing, I try to gauge the person over the phone. You can usually tell if they are serious and understand the requirements. 

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  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    4y
    Quote from @John Matarazzo:

    - Brandon Turner's property management book mentions on the rental application asking for the prospective tenant's checking and savings account balance. This seems a bit nosy to me but the logic makes sense. Is anyone else doing this?

    - In the book, he also mentions sending a reference form to the prospective tenant's previous landlords to get information. Does anyone do this? If so how do you go about it? Sending a form seems impractical, I can't see myself taking the time to prioritize filling out a form I get from some random landlord.

    - What do you require before showing the property to prospective tenants? Filling a pre-screening form, actual application or anything else? Obviously want to balance not wasting my time along with not being perceived as discriminating against anyone.

    - I've been using the avail software and so far enjoying it. Has anyone used the rental listing and application feature yet? Any feedback or tips appreciated.

    I do not ask for bank account balances, except in rare instances. For example, some applicants do not have employment lined up, but they have a significant amount of money saved up. In those situations, I will rent to them if they can show a balance equal to six months of rent and they pay their first three months in advance. But for a regular applicant I am only verifying what their income is.

    We usually just call for Landlord references. It's easier and faster. However, some property management companies want a form to fill out and they want something in writing from the Applicant that gives them permission to share. So we do have a form for those situations.

    We don't require anything before showing. Our marketing includes some pre-screening information and we try to talk to them before they look to weed out anyone that may not qualify. This prevents them from wasting their time, or ours.

    I can't answer your Avail question.


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  • Michele FischerPro Member
    Rental Property Investor · Seattle, WA · Member since 2013 · 2k+ posts · 1k+ votes
    4y

    I don't ask the balance of accounts, but I do ask where they bank.  One, I want to know whehter they use a bank, since many of our applicants and tenants do not, and if we ever pursued a judgement it is easier the more information you know about their employment and accounts.

    If the unit is empty, we do not prescreen to show it, we prefer to get as many people viewing the unit as possible.  If it is occupied, we would want some assurance that they might qualify before we disrupt the current tenant.

    We also phone all listed prior landlords.  We normally can't really reach many.  We also, right away, look up the owner of previous addresses listed on applications and credit reports (through local on-line property records) and send a note that says "If you would not rent to this person again or have anything you'd like to share, please contact us at..."  It does not get a lot of follow-up, but it is very easy to do and might pay off big at some point.  The owners are not always the property managers, or maybe they weren't an authorized occupant, or maybe the provided contact info is all fake and you are talking to their friends and relatives.

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  • John Matarazzo
    OP
    Member since 2020 · 27 posts · 9 votes
    4y
    Quote from @Michele Fischer:

    I don't ask the balance of accounts, but I do ask where they bank.  One, I want to know whehter they use a bank, since many of our applicants and tenants do not, and if we ever pursued a judgement it is easier the more information you know about their employment and accounts.

    If the unit is empty, we do not prescreen to show it, we prefer to get as many people viewing the unit as possible.  If it is occupied, we would want some assurance that they might qualify before we disrupt the current tenant.

    We also phone all listed prior landlords.  We normally can't really reach many.  We also, right away, look up the owner of previous addresses listed on applications and credit reports (through local on-line property records) and send a note that says "If you would not rent to this person again or have anything you'd like to share, please contact us at..."  It does not get a lot of follow-up, but it is very easy to do and might pay off big at some point.  The owners are not always the property managers, or maybe they weren't an authorized occupant, or maybe the provided contact info is all fake and you are talking to their friends and relatives.


    Any idea if its legal to not rent to someone based on them not having a bank account? I live out of state and am not in a position to accept cash (don't want checks either). I prefer to use Avail which has the ACH debit feature which is free to the tenant.
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  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
    4y

    @John Matarazzo

    We require a bank statement - amazing what you can find on one:

    - Confirm paystubs aren't frauded by looking for payroll deposits
    - Sometimes can see rent payments
    - Confirm they have funds to move in
    - Payments to & from payday lenders - bad sign
    - Often can see they are doing potentially illegal stuff

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  • Greg M.
    Rental Property Investor · Los Angeles, CA · Member since 2017 · 2k+ posts · 5k+ votes
    4y

    You have the right to be nosy. You're turning over an asset valued at hundreds of thousands of dollars to a person you don't know, in the hopes that they pay and don't trash the place. 

    My application asks for checking & savings account bank name, account number, and balance. Also asks for two largest debts. I like to see if they are honest with the debts when I compare to their credit report.

    I would not send a paper form to the previous landlord. Pick up the phone and call them. You're much more likely to have them say something negative about the person on a phone call than in written and signed form. 

    I'll show the unit to anyone, I'll be there from 10AM-1PM this Saturday. For an individual showing, I try to gauge the person over the phone. You can usually tell if they are serious and understand the requirements. 

    2Reply
  • John Matarazzo
    OP
    Member since 2020 · 27 posts · 9 votes
    4y
    Thanks for the feedback everyone.

    So in terms of showing the place. I am getting around 50 people contacting me a day and everyone wants a tour. I'm self managing, have a full time job and can't possibly show to everyone. In this situation do I have them fill out an application before showing? Seems like the only way to weed out the non-serious inquiries. Any thoughts?
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  • Alex M.
    Lehi, UT · Member since 2018 · 6 posts · 1 vote
    4y
    Quote from @John Matarazzo:
    Thanks for the feedback everyone.

    So in terms of showing the place. I am getting around 50 people contacting me a day and everyone wants a tour. I'm self managing, have a full time job and can't possibly show to everyone. In this situation do I have them fill out an application before showing? Seems like the only way to weed out the non-serious inquiries. Any thoughts?
    We also self manage our units. The way we do it is we usually pick a day and schedule everyone with 5-10 minute increments. You would be surprised how many people simply don't show up. Right during the showing we give them the link to the website where they can fill out an application.
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  • Nancy E.
    Bellevue, WA · Member since 2017 · 14 posts · 8 votes
    4y

    hi I have lots of years experience but only one or two rental units. Here's my thoughts. If you have that many applicants possibly the asking rent is too low?  I treat my tenants as I expect to be treated.  the bank balance is interesting if available but I wouldn't necessarily need it.  if they have a good rental history with similar rental expenses.. Nowadays it can take two incomes to afford a house .. You could drive by their current house. Always call landlord, you may not get the whole  truth but you need to figure that out for yourself. 

    Some applicants lose interest so I weigh the commitment" happiness" aspect on the tenants side. usually they call first, and come asap when the house is open.  There is something about your house they really like, like location, yard, size, garage, schools ,that sort of thing.  If they like it they will give you less trouble and want to stay longer . Those folks get a check on the plus side... Happy tenants are more fun..

    I usually am out working in the yard so they can tour privately. But I am available if needed... If former tenant still in house I have them be inside as it's their stuff and I want to respect their right to watch their possessions. They might also get a good feel for their preferred applicant.. , very helpful. 

    Most people need 2 incomes so you should evaluate the job market and prospective layoffs if the job seems unstable. ( For both)

    One of my interesting tenants had a large trust fund  from when his dad died when he was 10 and his lawyer paid the rent..He was in his 20s. I think he had a lot of party friends and they did sort of crazy things with boats and cars but no one got hurt and some of the neighbors got a kick out of them .  They really enjoyed themselves...  We didn't care that much as we were rehabbing the house later. But normally that wouldn't be a prime candidate.. At that time the economy was slow so there weren't a lot of other prospects.  Over the years you will have lots of applicants or few depending on the economy , you just need one or two  that you really want. 

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  • Rodney Sums
    Laveen, AZ · Member since 2016 · 584 posts · 528 votes
    4y
    Quote from @John Matarazzo:
    Thanks for the feedback everyone.

    So in terms of showing the place. I am getting around 50 people contacting me a day and everyone wants a tour. I'm self managing, have a full time job and can't possibly show to everyone. In this situation do I have them fill out an application before showing? Seems like the only way to weed out the non-serious inquiries. Any thoughts?

     Here is something for you to consider being new to the game. There are Property Management firms that for a fee will pre-screen and select tenants for you. Once they've given you a qualified tenant you can assume managing the property. You can pass on the burden of showings screening applications and following the laws. Often times the fee is anywhere from 50% to one month's rent. 

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