6 Simple Steps to Find and Screen Tenants for a Rental Property

Time and money— the investor’s most important assets. Nothing wastes both faster than a bad tenant in a rental property. But how can you screen tenants on your own and make sure you don’t end up stuck with problems you didn’t invite? In this article, we’ll show you how.

Having a bad tenant is every landlord’s worst nightmare. Developing a simple and operational screening process is so important that many investors start out by hiring a property management company who does the work for them.

However, if you want to save a little money, you can do it yourself. Below, we’ll look at a game plan for effectively screening tenants for your rental property. If you need a little extra help, our free downloadable cash flow analysis spreadsheet can help take the mystery out of making money with your rental property.

Prequalify potential tenants on the phone

Your first contact with a potential tenant will be either by phone or email. Step one is to qualify the prospective tenant. Prepare a list of questions you can ask them right off the bat. Start with their name, the number of tenants they intend to move in and their personal relationship to each other. Ask them their reason for moving, whether they have any pets, what their credit is like, and what date they are prepared to move. Next, inform them of your requirements— what type of lease you are offering and what type of behaviour you, as the landlord, expect.

Schedule a showing with the tenant at the rental

Your next move is showing. Make sure you do your part to ensure the property is at its best. When they arrive for the showing, pay attention to details, which can tell you a lot about a person. You can’t always judge a book by its cover, but you can still get information. What is their appearance like? Are they on time and polite? What kind of condition is their car in? Most importantly, do they know what they want? Can they make a decision today or within a day or two?

Collect an application from the tenant

To cement the burden of responsibility in their minds, a good idea is to have them fill out an application. You can download a rental application here for starters. Have them put in writing the answers to the question you initially asked, plus a few other questions that help you to fact check their story…. like their previous addresses so you can contact former landlords, or an employment history so you can be sure they have the funds in place to rent for the terms you have agreed on. Instruct them to bring the application back as soon as possible or to fill it out on site. Screening tenants for your rental property doesn’t have to be hard but does need to be thorough.

Check the tenant’s background and credit score

Once the showing is over, fact-check you potential tenants and read over their application. Call their references to gain valuable insight into their personality and make sure it’s a fit. It’s a good idea to do a credit and criminal records check, as well.

Create and sign a lease with your new tenant

If everything checks out, give yourself a high five. The hardest part is over! Get your potential tenants in as quickly as possible and have them sign a lease. Make sure the lease is a quality one— and includes all the important details you expect to see from them. Do you want your tenants to take care of their own landscaping? Gutters? Clean the floors a certain way? Check to make sure you are compliant with local laws, then put it all in the lease and have them check off or initial each point as they sign.

Give a copy of the lease to your tenant

Give them a copy of the lease and build rapport by letting them know you thought they were best out of all your applicants. Consider a small housewarming gift that makes a welcoming gesture. Collect your initial check, but make it a point not to hand over the keys to the property until their check has cleared.

Conclusion

Screening tenants for your rental property can be a simple and straightforward process. Why pay a property management company when you can save time and money by doing it yourself? Even a new investor can successfully screen tenants for a rental property and get off to a great start. Cash flow analysis is your first step on the journey to successful investing. Download our free cash flow analysis spreadsheet to make sure you get off on the right foot.