Rental Criteria Checklist for Screening Prospective Tenants
As a landlord, you already have a lot to take care of. When it comes to screening prospective tenants, be prepared with the right questions so you can seamlessly move through the process of determining if the applicant is qualified. Creating and using a rental criteria checklist will ultimately save you time, money, and frustration. You’ll be glad you undertook the task when you discover how effective it is in finding the right tenants for your rental property.
Note: In light of the Washington State Supreme Court’s November 14, 2019 approval of Seattle’s First In Time (FIT) law requiring landlords to accept the first qualified applicant, having a Rental Criteria Checklist for Screening Prospective Tenants not only is good practice, but it is the law.
Reasons To Have A Rental Criteria Checklist
Your rental criteria checklist is a guide to help you streamline the approval process. It can also protect you in the event of a discrimination claim, and it ensures your tenant screening process is objective and fair, as well as consistent across all properties and applicants.
An effective rental criteria checklist provides you with:
- Freedom from possible discrimination accusations
Some landlords will share their rental criteria checklist upfront with prospective tenants. This allows them to communicate key criteria before spending time meeting and screening prospects who won’t qualify. Generally, if a prospective tenant understands your expectations up front and realizes they cannot meet your minimum criteria, they will focus their search towards other places that may be more suitable.
Of course, the goal of any landlord is to find and retain great tenants. But the Fair Housing Act means landlords must exercise caution when screening applicants.
In 2021 there were more than 31,000 reported acts of housing discrimination, an 8.7% increase over 2020, according to a recent study by the National Fair Housing Alliance. Having a clear guideline helps you choose predictably good tenants and steer clear of discrimination in tenant screening and selection. Being clear, detailed, and concise in your tenant screening checklist means every potential tenant is held to the same standards.
The key to having a rental criteria checklist is to apply it to everyone. This means that you should make no exceptions. You will use the tenant screening criteria list to determine if a prospective tenant will:
- Take care of the rental property.
- Pay their rent regularly and on time.
- Will follow property rules, processes, and procedures.
The way to do this is to incorporate an in-depth, thoughtful rental criteria checklist that helps you narrow down the number of applicants and potential tenants to screen to only those that are qualified.
What to Include in a Rental Criteria Checklist
Your tenant screening checklist should include key information that keeps you focused on the important aspects of a potential tenant and establishes the requirements an applicant must satisfy to qualify for your rental property.
Information on a rental criteria checklist can include:
1. Rental History
Assess the potential tenant’s rental duration at their previous residences for the past 3-5 years. Make sure their application includes contact information for the current and prior landlords. Look for any late or missed rent payments, evictions, disciplinary actions, complaints, unpaid utility bills, or disruptions. You should be able to obtain this information from the application or their previous landlords.
Also ask if the applicant took care of the property and followed the rules of their tenancy agreement.
2. Current Income
You should also verify the applicant has a stable source of income at a minimum gross income to rent ratio. Often this is 3 times the monthly rent.
Look for continuous employment for the past 3-5 years, with employment at their current job for the past year. If either of these conditions are not met, you may want to consider their individual situations.
Landlords will often require to see copies of the most recent 2-3 months of pay stubs to verify income. You may also want to obtain copies of bank statements or tax returns if necessary.
Finally, any other income such as court-ordered income such as alimony, child support, etc., should be verified.
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Personal, professional, and previous landlord references should be from those who can be reached for at least the past one to two years. Confirm with the reference their length of acquaintance with your applicant, any complaints, late payments, or other problems they may have had.
Note that some employers may not provide any information about their employees other than confirmation of employment. Many property management companies also require you to submit questions about previous tenants by email.
Asking the right questions to a prospective tenant’s references can verify whether or not they have a proven track record of paying rent on time, taking care of the property, following rules, and communicating issues or problems with landlords like yourself.
4. Credit Reports
You can study the credit reports of prospective tenants to determine any financial liabilities they have and get a better idea of their debt to income ratio. Decide what rental criteria is important to you and for your property. For example, you may want to require a minimum credit score of 550 with no evictions, bankruptcies, or active collection proceedings.
Also determine whether credit items such as medical care liabilities, student loan debt, paid collections or discharged bankruptcies will affect qualification or not.
We suggest you use one of the many online services that provide not only credit screening reports, but access to background and criminal information, as well as other tools such as online applications.
5. Background Checks
Many jurisdictions prohibit the use of criminal history as part of rental housing tenant screening requirements. Laws vary by state and locality and can often change. You should familiarize yourself with the laws in your location to comply with any rental regulations.
If you are allowed to and do decide to check a potential tenant’s criminal history, determine what your stance is on prior history regarding:
- Registered sex offenders
- Outstanding or previous drug charges or convictions
- Pending charges or lawsuits
- Crimes involving assault, weapons, theft or trespassing
Be clear on your tenant screening checklist about which types of crimes (i.e. misdemeanors, felonies, sex-related, etc.) will deem an applicant unsuitable for your property.
6. Specific Policies
You may have different policies for different properties so it helps to have everything laid out in front of you to simplify the process.
- Does your property allow pets?
- If so, what is the pet policy?
- Is smoking permitted?
- Is off-street parking available?
- If so, what are the parking charges and/or policies?
- Are there guest rules or occupancy rules?
- Are there laundry facilities, and what are the rules and regulations for use?
- You can include any other rental application guidelines here.
These type of tenant screening criteria will help you quickly weed out any potential applicants that may not be a good fit for your property.
7. Other Criteria
When collecting a prospective tenant’s application, verify his or her identity with a government issued ID card, such as a driver’s license, passport, ID card, etc.
Also check that the application has been completed fully and honestly to the best of their ability. Missing information may simply be an overlooked question, or it might be a potential red flag that the applicant is trying to hide something.
Determine whether the applicant has the ability to pay up front deposits and any move-in fees.
You can also take note of other behavior that might give you an idea of whether the applicant respect the terms of your rental agreement and your property:
- Was the applicant on time for scheduled appointments?
- Did he or she provide adequate notice when changing or cancelling appointments?
- Did the prospective tenant follow all stated rules and policies while viewing the property?
Now that you have defined what your rental criteria will be, put it down in writing. This will allow you to obtain all the information you need from the applicant at once, and it will ensure you are able to make an objective evaluation of the prospective tenant. Furthermore, it provides documentation to help avoid potential bias or discrimination.
Now you can advertise your property with confidence and find the most suitable tenants for your rental.
Source: Landlord Gurus