4-Step Tenant Screening Checklist for Landlords: Protect Your Rental Investment

1. Collect Essential Information:

Start with a thorough application, requiring:

• Personal Details: Full name, Social Security number, and government-issued ID.
• Proof of Income: Pay stubs or tax returns.
• Rental History: Providing a comprehensive rental history can help landlords and property managers screen tenants for a rental property effectively. Contact information for previous landlords.
• References: Personal and professional references for additional insights.

2. Verify Identity: 

Verify Social Security numbers, driver’s licenses, and other IDs to confirm applicants are who they claim to be.

• Verify the Social Security number of prospective tenants through official channels as part of the credit and background check.
• Request and verify government-issued photo ID
• Cross-reference information from multiple sources
• Use professional verification services if needed

3. Conduct Thorough Background Checks:

• Credit Check: Look for consistent bill payments and manageable debt levels.
• Criminal Background Check: Stay compliant with laws about what offenses you can consider.
• Employment and Income Verification: Ensure income is at least 2.5–3 times the monthly rent.

4. Rental History

Contact past landlords to confirm rental payments, property care, and any eviction history.

Criteria for Assessment

• Income-to-Rent Ratio: Ensure applicants can comfortably afford rent to secure the right tenant for your rental property.
• Creditworthiness: A credit score of 620+ is often a good benchmark.
• Rental History: A solid history without evictions or disputes is ideal.

Fair Comparison

Create a standardized scoring system to compare applicants objectively.

Red Flags to Watch For

• Incomplete applications.
• Frequent job changes.
• Unverifiable references or income.

Transparency in Screening Process

• Clearly communicate screening steps
• Provide estimated timeline
• Explain required documentation
• Be consistent with all applicants

Common Screening Mistakes to Avoid

• Over-relying on online background checks
• Allowing personal biases to influence decisions
• Ignoring clear warning signs
• Failing to document the screening process can lead to misunderstandings and potential legal issues for landlords and property managers.
• Inconsistent application of screening criteria

Tenant Screening Service Options

• TransUnion SmartMove
• RentPrep
• MyRental
• Cozy
• TurboTenant

DIY Screening Strategies

• Use multiple verification sources to conduct a thorough credit and background check on prospective tenants.
• Request comprehensive documentation
• Conduct thorough reference checks
• Maintain detailed records

Steps for Approved Renter Applicants

Once you’ve selected a tenant, it’s time to finalize the lease agreement and prepare for move-in.

• Draft and Review the Lease: Ensure the lease agreement includes all agreed-upon terms, such as rent amount, due dates, and rules for property use.
• Collect Security Deposits: Obtain the deposit from the prospective tenant before handing over the keys to ensure commitment. Check local laws regarding deposit limits and timelines for its return.
• Coordinate the Move-In Process: Schedule a walkthrough with the tenant to document the property’s condition and address any initial concerns. Provide copies of the lease, receipts, and move-in instructions.

Handling Rejected Applications

Rejections can be sensitive, so it’s important to communicate clearly and professionally.

• Provide a Formal Notification: Send a written rejection letter or email, explaining that another applicant was selected. Avoid mentioning specific reasons to prevent discrimination claims.
• Offer Feedback When Appropriate: Constructive feedback can help landlords and property managers refine their tenant screening checklist. If applicants inquire, provide general feedback, such as suggesting they work on credit improvement or provide stronger references.
• Stay Compliant: If the rejection was based on a credit or background check, follow the Fair Credit Reporting Act (FCRA) requirements by providing an adverse action notice.

Documenting the Screening Process

Good record-keeping protects you legally and helps improve future screening efforts.

• Keep Application Records: Store completed applications, screening results, and correspondence for at least five years, or as required by law.
• Document Decision-Making: A well-documented decision-making process helps landlords and property managers maintain compliance with fair housing laws. Note the criteria used to select the tenant to defend against any potential discrimination claims.
• Track Payment History: Begin tracking rent payments and communication history from the start of the tenancy.

Section 8 Housing

Screening tenants for Section 8 properties involves additional steps due to government regulations.

• Eligibility Verification: Ensure that applicants meet HUD’s income and eligibility requirements. This typically involves verifying their Section 8 voucher and confirming their portion of the rent payment.
• Understanding Payment Structures: With Section 8, the government pays a portion of the rent directly to you. Verify that tenants can reliably pay their share.
• Communication with Housing Authorities: Maintain clear communication with local housing authorities to understand specific requirements and updates related to Section 8.

College Rentals

With college students, limited rental or credit history can complicate the tenant selection process.

• Co-Signer Requirements: Ask for a parent or guardian to co-sign the lease, providing additional financial assurance.
• References: Instead of rental history, request references from employers, professors, or advisors who can vouch for their reliability.
• Lease Duration: Consider shorter lease terms to align with the academic calendar, as students often move at the end of the school year and may need to submit a rental application quickly.

Short-Term Rentals

High tenant turnover in short-term rentals poses its own challenges for property owners in finding reliable tenants and may affect their screening reports.

• Reputation Checks: For platforms like Airbnb, review the applicant’s ratings and feedback from previous hosts.
• Payment Verification: Require upfront payments or deposits to reduce the risk of non-payment, especially when screening tenants for a rental.
• Behavioral Assessment: If possible, ask about the purpose of the stay to identify potential red flags, such as parties or disruptive events.