Scoring Prospects Like a Credit Report

[Brendan O'Brien]

I just put up an article on avoiding the appearance of discrimination and mentioned the tenant scoring system I use to vet prospective tenants. I feel this is the best method for accurately comparing prospects and would recommend it to other landlords.

The system uses two parts. The first is a composite score which assigns points to different factors. You then set a minimum score which any prospect must meet to be considered.

I won't give all the details here, but suppose you set a min score of 25. One component of that score is going to be tenant history. A 0 would be somebody who had been a tenant before and had gotten a bad reference from the last landlord. An 8 is someone who had been a tenant before and gotten excellent references.

I do the same with job history, arrest record, annual income minus required commitments, and credit history.

The other component is required scores. Don't rent to somebody with a score of 0 for job history (no job), unless there is a qualified copayer signing the lease or substantial cash in the bank.

The system has the benefits of being non-discriminatory, completely fair, and flexible. It will take an hour to set up your scoring system (mostly figuring out how to weigh different things), and then moments to plug any prospect into it.

What do you think?