Fort Wayne, IN · Member since 2013 · 66 posts · 12 votes
A month and a half ago I rented out a property to a promising prospect... She had adequate income, sterling references, great job history and one small dog.
As it would turn out she also had cats, extra roommates and she is already late on her rent...
When screening tenants what are the most important things to look for?
Long Beach, CA · Member since 2013 · 79 posts · 8 votes
12y
Hi, Nick - I started to respond and then realized I would end up writing a book. There's a huge amount of information on the subject here on BP. As @John Chapman evictions and income are paramount. Because I had a discrimination complaint filed against me with the Department of Fair Housing, I've become particularly sensitive to the screening process. The complaint was dismissed but I had many sleepless nights wondering if I had inadvertently done something wrong. IMO, documentation is everything. For me, it's about knowing what to do, doing it, and then documenting it to a fair-thee-well.
So, I suppose that's a long winded answer to say, documentation.
Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
12y
True John. When financing a car sale, the most important thing is how they pay the car payments, lending as a mortgage, how they paid their last mortgage, leasing is how they paid the last lease. Any repo, foreclosure or eviction is poison.
Then Income, can they afford it.
Ability to pay, then look to other aspects, criminal records, credit issues, solvency, job security, who will be there and who they are, any pets, how do they present themselves, do they seem civilized or are they idiots? A clean car tells you a lot, so will three weeks of food wrappers in the car.
Just be consistent and have your guidelines in writing. :)
Real Estate Investor, Flipper, PM, vacation rental, Wholesaler · Athens, GA · Member since 2013 · 260 posts · 210 votes
12y
The biggest watch out for me is when the candidate is in a big hurry to apply and quickly move in. If it is that urgent for them to move, there's trouble. Maybe an unpaid landlord or other debt, maybe domestic drama that will almost always follow the candidate into your place. If they are moving out in a hurry, you can almost guarantee that there's a bad reason that will impact you negatively. They are almost certain to leave your property in a lurch in the same manner.
There are ratios to consider from an income perspective. Less than 25% of take home pay is conservative, but I've approached 40% without issues. Don't let tenants live on the edge. Folks don't always budget correctly so don't let somebody set themselves up for eviction by biting off more than they can chew.
I always give preference to people with jobs over a government check. You can garnish W2 folks but can't touch the govt assistance.
Real Estate Broker · Orange, CA · Member since 2008 · 380 posts · 87 votes
12y
You look at 3 areas.
1. Credit (evictions, charge offs, repossessions, judgments, etc)
2. Income (pay-stubs, length of time on job/line of work, verify employment can they afford the rent)
3. Assets (money in bank or reserves)
Hanford, CA · Member since 2013 · 5k+ posts · 1k+ votes
12y
I looked at everything that everyone mentioned. I also look at the moral character. Out in California it was very popular for people to just let their houses go and do a foreclosure because it was so under value. If people are just going to walk away and ruin their credit score. I don't rent with people wiht foreclosures like this becuase to me it means they won't own up to their obligations.
Investor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votes
12y
While you have all the standards one thing I now consider are signs they can't manage money. If someone is having a hard time coming up with a deposit and they have adequate income they should be able to manage it I have started just straight out turning them down. I have had two lately that are living with family, not paying rent and both said I have to wait for this or that for (one months rent) deposit. Social agency assistance or an income tax refund...
Investor · Delaware, OH · Member since 2013 · 224 posts · 64 votes
12y
We look at all of the above, primarily eviction history and income. I agree with Jack - I don't want tenants who are don't realize they are overextending themselves.
The other thing we really pay close attention to is personality - do they act reasonable and responsible, and are they going to be willing to comply with our requests and our rules? Again, this can be hard to determine, but we've frequently been able to find fairly extensive social networking and online information about our potential tenants to get a better idea about them before we sign a lease. And we learn things like...what pets they really have ("here's me with my cat!"), why they left their last job ("need a new job. stupid boss fired me for being late today. But man, that was a great party last night. Forget that job!"), and how tight their funds really are ("can someone give me a ride to the grocery? Battery on the car died and I won't have money until payday to buy a new one."). My favorite is when I find stuff they write about their apartments or landlords ("Hey - can someone keep my cat for the day? Landlord is coming to spray for bugs and I'm not supposed to have pets here.").
But sometimes you still get fooled. You do the best you can. And I only have 4 units, so I can take a couple of hours a couple times of year to do the research when we have a vacancy.
Investor · Middletown, NJ · Member since 2008 · 2k+ posts · 1k+ votes
12y
All good advice, although as @Pam R. says, you can still get fooled.
One thing I make sure I do when the tenant is approved and we go over the lease, is to emphasize what happens when they do not pay the rent or if it's late...on the 4th day after it's due, a 3 Day Pay or Quit notice gets posted. If the full rent and late fees aren't paid by the due date on the notice, my attorney will file an eviction. They initial that clause in the lease. Tenants have almost always paid the late fee without being told to...the lease states the late fee is considered "additional rent".
So if a bad tenant slips in, or if they start out well and become a problem, they know exactly what will happen. They have a chance to back out if they cannot or will not abide by the lease.
I don't check bank assets. If an applicant asks about paying only part of the security deposit up front, I just say no. If they balk at the credit check fee ($25) or the condo association's application fee, they are also passed up.