How to choose the right tenants for your rental property
Finding good tenants is important for rental property owners. The success or failure of your investment often comes down to who you put in your property. If you choose wisely, you’ll have responsible tenants who pay on time and treat your property well. Choose poorly, however, and you could end up with headaches, hassles, and financial losses.
How do you go about selecting ideal tenants? While there’s no foolproof system, asking the right questions and doing some basic research can help clue you into applicants who are more likely to be good tenants.
Why tenant screening matters
Establishing a thorough tenant screening process is crucial for finding good renters. It could be a tedious process, but the time invested on it can save your investment, money and avoid potential issues if you sign up with problematic tenants.
Screening helps assess an applicant’s ability to afford the rent, rental history, criminal background, and other factors that determine if they’ll make a good tenant. Don’t skip this step—you want to avoid realizing too late that a renter can’t or won’t pay rent on time. Before finalizing a tenant, it’s important to check rental history to ensure they have a reliable track record of paying rent on time.
The role of credit scores
Credit scores provide insight into how financially responsible some are in terms of monthly rent payments. Most landlords require credit scores of 600 or higher. Applicants below 550 will often have a history of late payments and maxed-out cards. Review credit reports to check for bankruptcies, collection accounts, foreclosures, and other red flags. However, beware of denying tenants solely based on credit scores, as this can conflict with fair housing laws.
Questions to ask tenants
In addition to credit checks, have potential renters fill out a rental application that asks key questions, such as:
- Current and previous addresses for reference checks
- Employment details like company, position, salary, and supervisor
- Personal references
- Whether they have pets or smoke (if those violate your rental policy)
- Explanations for early moves from prior rentals or evictions
- Their move-in date and desired lease terms
Follow up with additional screening questions during an interview, either on the phone or ideally in-person when they tour your rental property. This gives you a sense of their personality and responsiveness.
Tenant red flags to watch for
Here are some problematic behaviors that should raise red flags during tenant screening:
- Hesitation or strange explanations when asked for references or credit check permission
- Inability to confirm income or employment
- Renting above their apparent income level
- Negative remarks from former landlords regarding late rent, damages or evictions
- Numerous short-term rentals in their history
- Refusal to provide a security deposit or first/last month’s rent
- Unpleasant demeanor toward you or your property staff
While everyone has unique circumstances, pay attention to any inconsistencies or behaviors that signal irresponsibility or reluctance to provide information. Don’t ignore warning signs just because someone seems friendly or you really need to fill a vacancy. Rushing into a rental agreement you later regret rarely ends well for landlords.
By carefully vetting applicants, verifying details, asking lots of questions, and trusting your gut reactions, you’ll often have a sense of who will make an ideal tenant. While on-time rent and property care should be any landlord’s minimal standards, excellent tenants are also honest, respectful, and responsive when issues arise. Getting the tenant screening process right ultimately leads to more profitable investments and peaceful relationships all around.
Important questions to ask from previous landlords
Checking rental references by contacting applicants’ former landlords can provide invaluable insights that help avoid problem tenants. Listen closely to what past landlords say – and don’t say – about their reliability. Ask smart screening questions to uncover any concerns and get a well-rounded picture of what it’s like renting to them.
Here are a few questions to ask previous landlords:
- Did they fulfill their entire lease or move out early? Frequent short-term rentals can signal instability or dissatisfaction.
- Were rent payments made on time, late, or missed? While an occasional late rent payment may happen, chronic late pay suggests financial struggles or irresponsibility.
- Did the tenants abide by the rental agreement terms and rules of your property? Did they have unauthorized occupants, pets without permission, or other lease violations? Disregard for rules indicates potential headaches.
- Did they give sufficient notice about moving according to their rental agreement terms? Proper notice preserves your relationship with good tenants. Insufficient notice causes unnecessary scrambles to prep and fill vacancies.
- Did they leave the property clean and undamaged when they moved out? Did they get their full security deposit back, or were funds withheld for repairs, back rent owed, or cleaning fees? The state they leave behind and getting deposits returned often demonstrate a level of care and responsibility.
- Were there ever complaints from neighbors or other tenants about noise, disturbances, or illegal activities? Behavior that bothers those around them will likely resurface.
- Would you rent to them again? This straightforward question puts all the others into perspective. Previous landlords know better than anyone about their reliability.
Listen for hesitations, vague answers, negative remarks, and facts that don’t align with what the applicants have already told you. Don’t confront past landlords, but note any discrepancies and follow up respectfully with the applicant for explanations later.
Making an effort to thoroughly screen tenants reduces the risks of delinquent payments, premature moves, and property condition issues down the road. If you have limited available time on your plate, you may consider hiring a property manager to take care of tenant screening for you. Contact property managers in Atlanta to maximize your investment and maintain your property with ease.
Final words
Finding and retaining excellent tenants is essential to rental property success. While no screening process is foolproof, taking the time upfront to thoroughly vet applicants, verify details, and trust your instincts goes a long way. Ask smart questions, listen closely, and don’t ignore red flags. With diligence and effort, you’ll secure responsible renters, fewer headaches and a more profitable investment over the long run.