Urgent help in Tenant screening as a newbie Landlord

Los Angeles County, California
General Landlording & Rental Properties
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Urgent help in Tenant screening as a newbie Landlord

Kristine O.
Member since 2023 · 70 posts · 24 votes

Hello rockstars! Especially to landlords. This is the first time that we are renting out to someone for midterm rental. My prospect tenant just completed his application form/background check thru avail.co. Can i ask for personal reference and professional reference like coworkers no.? He's a retired military in his 40s. He has 9 month work gap in 2022. And in 2023 up to present he does not have employment but just accepted at a military or base near where we live. He even sent his 2 previous pay stubs from 2022 and an acceptance letter from his current military employer. What else can i ask just to prevent potential issues with a tenant. This is a big deal since we live in the same lot with my family and I'm renting out my ADU. Its just so many horror stories out there dealing with bad tenants that it's making me nervous although I need this rental to help pay for mortgage.

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Nathan GesnerBusiness Member
Moderator
Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
2y
Quote from @Kristine O.:

He provided two pay stubs from 2022? That demonstrates that he earned some money two years ago. What about now?

He needs to show verifiable proof of income to confirm he can afford the rent. You need to run his credit to confirm he pays his bills on time. You need landlord references to confirm he takes care of his rentals, doesn't violate the lease, pays rent on time, etc.

I recommend you read this guide, set some standards, and stick to them: https://www.biggerpockets.com/...

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  • Colleen F.Pro Member
    Investor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votes
    2y

    @Kristine O. You can get personal references but nobody gives you a bad personal references. I only use them in cases with no rental history.  Did you call his previous landlords? If your criteria is he passes a background check and has employment commitment is enough and you can verify (call to verify) then move forward. If he doesn't then don't accept him.

    2Reply
  • Kristine O.
    OP
    Member since 2023 · 70 posts · 24 votes
    2y
    Quote from @Colleen F.:

    @Kristine O. You can get personal references but nobody gives you a bad personal references. I only use them in cases with no rental history.  Did you call his previous landlords? If your criteria is he passes a background check and has employment commitment is enough and you can verify (call to verify) then move forward. If he doesn't then don't accept him.

    Hi Colleen.  
    that’s true.  I have not called anyone since he just completed his application form tonight so tomorrow i will call the place where he got accepted at and will start employment on March 11th and also call his previous employer.  He does not have previous landlord since he owed a house in utah when he was working there at the military base for 6 years.  He lives with his mother currently in las vegas but in between like nov 22 to march or may 23 he worked in japan at a base too.  
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  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    2y
    Quote from @Kristine O.:

    He provided two pay stubs from 2022? That demonstrates that he earned some money two years ago. What about now?

    He needs to show verifiable proof of income to confirm he can afford the rent. You need to run his credit to confirm he pays his bills on time. You need landlord references to confirm he takes care of his rentals, doesn't violate the lease, pays rent on time, etc.

    I recommend you read this guide, set some standards, and stick to them: https://www.biggerpockets.com/...

    The DIY Landlord Book4.7248 Reviews
    WebsiteView Page
    3Reply
  • Dave SpoonerPro Member
    Rental Property Investor · Cincinnati, OH · Member since 2020 · 869 posts · 823 votes
    2y

    Agreed with Nathan. He needs to show recent proof of income that he's earned and I would call his previous landlords as well. 

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  • Kristine O.
    OP
    Member since 2023 · 70 posts · 24 votes
    2y
    Quote from @Nathan Gesner:
    Quote from @Kristine O.:

    He provided two pay stubs from 2022? That demonstrates that he earned some money two years ago. What about now?

    He needs to show verifiable proof of income to confirm he can afford the rent. You need to run his credit to confirm he pays his bills on time. You need landlord references to confirm he takes care of his rentals, doesn't violate the lease, pays rent on time, etc.

    I recommend you read this guide, set some standards, and stick to them: https://www.biggerpockets.com/...

    Thank you so much Nathan.  

     2023 is his last work in Japan.  In between 2022 and his work in Japan he lives with his mother.  His background screening thru avail.co didnt reveal any bad info.   Credit score is great, no criminal background seen, no evictions, not a registered sex offender.  the only landlord is in Japan when he worked there and his mother which he gave the number and his address.  So i dont really have a landlord since before he moved in with his mom he owned a house in Utah from 2016-2022.  I’ll contact his work reference. Another issue that i have is he wants to move in March 3 but he wont start his work until March 11.  Part of me is saying No but also a part of me says what if he’s a decent tenant.   😬 

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  • Kristine O.
    OP
    Member since 2023 · 70 posts · 24 votes
    2y
    Quote from @Dave Spooner:

    Agreed with Nathan. He needs to show recent proof of income that he's earned and I would call his previous landlords as well. 

    Thank you Dave. I’ll start calling now. 
    0Reply
  • Rick Albert
    Real Estate Agent · Los Angeles, CA · Member since 2018 · 2k+ posts · 1k+ votes
    2y

    Personal references aren't going to be much help. They are only going to tell you good things.

    You could reach out to a supervisor to confirm employment and salary. 

    What does his bank accounts look like? Credit score? Landlord references?

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  • Kristine O.
    OP
    Member since 2023 · 70 posts · 24 votes
    2y
    Quote from @Rick Albert:

    Personal references aren't going to be much help. They are only going to tell you good things.

    You could reach out to a supervisor to confirm employment and salary. 

    What does his bank accounts look like? Credit score? Landlord references?

    Hi Rick.  Thank you for your reply. 

    i didnt ask for bank account but his credit score is 777.  His only landlord is in Japan when he work there in 2022-23 in a military base.  He lives with his mother after he sold his house in 2022.  And he just got accepted at a military base here that’s why he’s looking for housing for March.  
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  • Rick Albert
    Real Estate Agent · Los Angeles, CA · Member since 2018 · 2k+ posts · 1k+ votes
    2y

    Then how do you know if he has the money to pay the deposit and rent if you don't look at the bank accounts?

    What I've done in the past is asked to see the withdraws from his bank account that showed he paid rent on time. Even if it was in Japan, the money had to come from somewhere. You can also email the landlord in Japan and ask the questions. 

    What other activity have you had on the unit? Are there people you feel more comfortable with?

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  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    2y
    Quote from @Kristine O.:


    He has really good credit and he already has employment lined up. That sounds pretty solid. You can verify his job through a letter of hire or by calling the employer.

    I don't understand why he doesn't have pay stubs. He worked at a military base 2022-2023, but his paystubs are from 2022? That's the red flag for me.
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  • Henry T.
    Member since 2022 · 1k+ posts · 1k+ votes
    2y

    I like to see two years on present job and at least a 720 credit rating.  What if they can't stand him at his new job and he's let go?  You're in California, don't mess around getting stuck with a deadbeat. Next. Listen to Nathan is telling you. Establish a high standard screening process, and stick to it.

    1Reply
  • Shaydon Childers
    Investor · Poulsbo, WA · Member since 2023 · 21 posts · 15 votes
    2y

    I am also a new landlord and just rented my first property last August. It's a really nice house that I put a lot of effort/money into remodeling myself. I had a family willing to pay 6 months of rent in advance with good credit, financial statements etc. They were relocating to the state so the husband could attend a specialized shool in the area. I chose to rent to a local law enforcement officer instead because he had a steady job, good credit and lived locally. My thinking was he would be a longer term tenant with less risk of not being able to pay (after 6 months). So far it has gone really well! I wish you luck with your decision. 

    1Reply
  • Colleen F.Pro Member
    Investor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votes
    2y

    @Kristine O.  Sounds like he is a military contractor.  My experience has been good with Military contractors from overseas with DOD clearances with good credit.  I suggest verify employment.  If he wasn't a w-2 employee that might be why he doesn't have pay stubs.  No problem with the move in date before employment, he wants to get settled and it is a week.  You can ask for some proof of income from the past year or funds in the bank for income concerns.  If you are flexible about the document type he should be able to provide something. Its tax time so 1099/w2 or bank statement.   For a mid term rental you aren't going to get two years employment in the same job those aren't the kind of people looking for a furnished month to month in most locations.  Do you have something signed by him so the employer can talk to you to verify employment?  
     

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  • Kristine O.
    OP
    Member since 2023 · 70 posts · 24 votes
    2y

    Hi all! So far he gave me his recent bank statement but the first page only but I know that he has well over to cover the deposit and a month’s rent.  I already left a message to the recruiter for his new position that will start on the second week of March.  He has not called me back yet.  Also I spoke to his previous work supervisor for 8 yrs when he was stationed in Utah. He said this person went AWOL after an argument with a coworker then came back to extend his leave then resigned.  So after that he has not heard from this possible tenant for 2 years now.  But that's when this possible tenant got a job in Japan for 4 mos Nov 22- March 2023.  And now accepted at a nearby base.  I’ll follow up on the recruiter on Monday.  So far this guy is only asking to stay for a month probably just to settle in.  

    Thank you all for your replies.  It’s a big help.  

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  • Alison Brenner
    Member since 2022 · 79 posts · 72 votes
    2y

    I don't think this has been mentioned. He needs to show proof of income equal to or greater than three times the monthly rent.

    If you are in Los Angeles, please please please type up your screening criteria, distribute it to every prospective, and stick to it. 

    1Reply
  • Martha KuveikisPro Member
    Insurance Agent · Palm Beach Gardens, FL · Member since 2021 · 2 posts · 1 vote
    2y

    I would pass on this person.  I have been a landlord for a decade and only accept those who can proove current income, with excellent credit. Run the background and credit with proof of current income.  I would pass on this tenant.  I've found that military history and positive previous landlord references don't always make for a good tenant, especially when the current income is sketchy. I've called back landlords and asked why they had given a good report only to find they were afraid of getting sued so didn't tell me the truth.  

    1Reply
  • Kristine O.
    OP
    Member since 2023 · 70 posts · 24 votes
    2y

    Thank you all for your input here.  I’m learning a lot.  Am i required to tell any tenant the reason if I turn them down? 

    0Reply
  • Kiana Kelly
    Member since 2022 · 6 posts · 1 vote
    2y

    You can tell declined applicants the reason for their denial, but I would recommend not going into too much detail. I've been doing property management for 5 years now, and I have a denial letter I've created. Something like: Hello, thank you for your application. . . unfortunately the application was denied to due x,y,z "does't meet income requirement." "unable to provide proof of income documents" ect. the application fee is non refundable . . if you have further questions, email here.

    Overall, I think you should develop a screening process. Because you have to be able to protect the integrity of the property or unit by screening applications properly. It's a great start that you're asking for help.

    0Reply
  • Kristine O.
    OP
    Member since 2023 · 70 posts · 24 votes
    2y
    Quote from @Kiana Kelly:

    You can tell declined applicants the reason for their denial, but I would recommend not going into too much detail. I've been doing property management for 5 years now, and I have a denial letter I've created. Something like: Hello, thank you for your application. . . unfortunately the application was denied to due x,y,z "does't meet income requirement." "unable to provide proof of income documents" ect. the application fee is non refundable . . if you have further questions, email here.

    Overall, I think you should develop a screening process. Because you have to be able to protect the integrity of the property or unit by screening applications properly. It's a great start that you're asking for help.


    0Reply
  • Kristine O.
    OP
    Member since 2023 · 70 posts · 24 votes
    2y
    Quote from @Kristine O.:
    Quote from @Kiana Kelly:

    You can tell declined applicants the reason for their denial, but I would recommend not going into too much detail. I've been doing property management for 5 years now, and I have a denial letter I've created. Something like: Hello, thank you for your application. . . unfortunately the application was denied to due x,y,z "does't meet income requirement." "unable to provide proof of income documents" ect. the application fee is non refundable . . if you have further questions, email here.

    Overall, I think you should develop a screening process. Because you have to be able to protect the integrity of the property or unit by screening applications properly. It's a great start that you're asking for help.



     Got it. Thank you Kiana. 

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  • Kristine O.
    OP
    Member since 2023 · 70 posts · 24 votes
    2y

    Another question for you all.  Do you require a renter’s insurance? I only want to rent out my unit as a midterm rental so I wonder if you guys require that too. 

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  • Colleen F.Pro Member
    Investor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votes
    2y

    @Kristine O.Why are you doing midterm?   If you are taking people only 1-6 months you should read up the 30 day stay here and go on Furnished finder website as well as know your state laws. For shorter stays you are going to get alot of in between people with work history that is less than 2 years or new to a job. I use different criteria and a different lease for these month to month furnished stays than long term tenants. For long term I require renters insurance, for  a month I suggest it. I also write in the lease if the property is not habitable due things like fire the lease cancels (not sure you can do that in California). 

    0Reply
  • Kristine O.
    OP
    Member since 2023 · 70 posts · 24 votes
    2y
    Quote from @Colleen F.:

    @Kristine O.Why are you doing midterm?   If you are taking people only 1-6 months you should read up the 30 day stay here and go on Furnished finder website as well as know your state laws. For shorter stays you are going to get alot of in between people with work history that is less than 2 years or new to a job. I use different criteria and a different lease for these month to month furnished stays than long term tenants. For long term I require renters insurance, for  a month I suggest it. I also write in the lease if the property is not habitable due things like fire the lease cancels (not sure you can do that in California). 

    Hi Colleen.  I want the midterm rental because the short term rental is too much work for us since we live in the main house. Besides it is not allowed here in my city to do STR.  I listed my ADU at furnished finder and it is fully furnished.  I’ve watched in youtube that some midterm rental landlords require a rental insurance or maybe not.  I guess ive heard, read and watched horror stories about squatters that’s why Ive been overthinking about it.  Like if my availability is a only a month then in california they can still establish tenancy although I have a lease contract that specifies a start and end date of the rental.  It’s confusing to me this is my first time to do this but I want this so Ive been trying to learn.  
    0Reply
  • Colleen F.Pro Member
    Investor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votes
    2y

    @Kristine O. just about every state they establish tenancy after 30 days so you have to read up on your landlord tenant laws because they will apply.  Cali, probably in the worst state to rent as far as tenant laws so of course you do need to be cautious. Look at what reading I suggested. Set some criteria.  I don't know if you accepted this tenant or not but I am just pointing out that with the term of say 1-6 months you won't get the same kind of tenant as if you do long term so your criteria needs to reflect that. I have accepted people with new jobs in the area for this type of rental. You have to decide your tolerance on rental insurance. to be honest if they trash your place they likely let their insuance lapse.  I do think there is one site that you can have them pay rent and it adds on a fee for rental insurance or you could go 30 days plus with airbnb and do a lease or you could just ask them to provide proof. You always run a risk. Good luck I can't remember who that is that adds the rental insurance charge. 

    0Reply
  • Martha KuveikisPro Member
    Insurance Agent · Palm Beach Gardens, FL · Member since 2021 · 2 posts · 1 vote
    2y

    If you state the minimum requirements, such as the min credit score, min income, sending your rejection letter, can be as simple as stating they don't meet the min stated income or credit requirements.  I post the credit score and income mins in the listing so it is known in advance.  

    0Reply
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