Tips on Tenant Screening During COVID?

Question

It's my first time helping my parents with tenant screening and the demand for rent has been great. We received over hundreds of inquiries. There is definitely more demand than supply in our market. Unfortunately, most of the people who contacted us did not fit the standard qualifications we set such as having a minimum credit score of 600 and having monthly income three times the rent. We even lowered the rent to hopefully attract more ideal tenants. Any tips on finding tenants that meet our standard qualifications?

Also, what are your thoughts on having riskier tenants pay 2-3 months of rent ahead of time? Would that be a wiser choice during this time to mitigate the risks? Would appreciate some tips. Thank you!

Rochelle Thea Fabrizio · Answer

I would always exercise EXTREME caution when moving forward with unqualified tenants during this time. In some states they can move in, claim hardship from COVID, and not have to pay rent without any ability to evict them. If there are not ANY qualified tenants, and it is in your best interest to rent the property as soon as possible, I think that the increased months rent in advance is a good option as well as possibly charging them a higher security deposit to cover any potential pitfalls that are more likely with that class of renter. I personally have never had good luck after lowering my standards and it has ended up becoming more of a problem and headache than anything else.

Ivan Vasquez · Answer

@Jean SooI was in your shoes recently w purchasing a house this year in March and had to rent it out in April. I had a few people interested only because I accepted folks from low income that got government support (section8). I knew it was going to be hard to screen people because people in section 8 have credit scores below 600 and don’t have much money saved up. However, I asked for a co-signer outside of the household, 2 months bank statements, 2 month pay stubs, references of past landlords, and did a background check and credit check through RentSpree.com . This helped me learn more about the tenant. Low-income Government housing support provides 70% of the rent so worse case situation is I’d get 70% of the went if the tenant couldn’t pay. I also wrote on my lease that I would inspect the property every 3 months to make sure it’s in good shape. I know people worry that folks in low income housing will trash your place, may not pay rent on-time and cause you trouble but it’s a chance you take or have your place vacant and vulnerable. Good luck.

John Warren · Answer

@Jean Soo you have had some good advice on this thread. I placed over 20 tenants in my properties here in Chicago in 2019, and the one person I took a chance on ended up being a huge emotional drain. I was so happy to see this tenant leave a month ago... Do not lower your standards. Lower the price or improve the property to attract better tenants before you do something like that.

Crystal Smith · Answer

I was drawn to your post because of the title Tenant Screening During COVID, but your question really has nothing to do w/ COVID. My recommendations:1. Not sure where you're advertising your rental but market the rental in as many places as possible. Maybe include an incentive for those with credit scores above your criteria such a free months rent2. Not sure how you're handling the calls for your rentals but if you have the ability, automate the screening process. For example: Rather than personally taking the calls drive the tenant to an online questionnaire or your objective written criteria. Part of the automation should only send you applicants that meet your objective criteria & reduce the time you spend w/ those that clearly won't qualify3. Don't reduce your standards. Increase the incentives for people to apply that meet your standards & drive your marketing toward those people

Account Closed · Answer

I so agree that lowering standards results in bad experiences. That's what happened for me during the recession. I personally don't like the idea of tenants paying rent upfront in order to get you to take them. You just have to ask yourself what kind of person has that kind of cash, yet has bad credit? Hmmmm, maybe drug dealers? Anyway, you want people who don't somehow have lots of cash, yet can't seem to pay their monthly bills on time so that they have decent credit. Especially, if when you look at their credit, if they have collections for small amounts of money for utility bills, like their cable or telephone bill. If their priorities are such that they choose not to pay bills they can afford, then they probably aren't going to think of rent as a priority. At least that was my experience.

Michael Dorosh · Answer

@Jean Soo I’m in the same exact situation. Any tips or lesson learned you can share?