Screening Tenants for Your Rental Investment Property

If you are investing in rental property, it makes sense to spend some time preparing for the evaluation of your prospective tenants. Careful interviewing and examination of application forms can save you a lot of headaches later on in the tenancy.

The Phone/Email:

Often, the first contact you will have with your tenant is a phone call or email about the property/unit you are renting out. It is a good idea to have a list of the questions you would like to ask in front of you. Having a page of questions and answers for each prospective tenant can help you organize your information more efficiently.

Information You Will Want to Know:

Name

Phone

Reason for moving

Number of people moving into unit

Pets?

Smoking?

Credit information

Previous/present landlord references

Meeting the tenants:

Have a rental application form for each adult proposing to live in your rental property. There are applications that can be downloaded off the Internet for free if you don't want to make your own. The application should reiterate the above questions, plus more detailed questions about history, employment, etc.

Observe the tenants when you show them the property. Little things can be big clues as to how they will treat you and your property.

Did they come to the appointment on time or a little early? The respect they show for your time will often be reflected in the respect they show for the timely appearance of the rent check.

How do they appear? Great tenants are not necessarily dressed to the nines, but should be decently neat and clean. Exceptions can be made, such as for a construction worker who just got off the clock, but in general, people should at least appear to have a healthy affection for soap, water and the laundromat.

What is their attitude towards you? Are they polite and respectful of your property or do they show some abrasiveness in their behavior? Do they wipe their feet, ask before they touch anything (especially if you still have renters living in the property), and behave in general as you would like people to behave towards your home?

While it is normal and expected for prospective renters to ask questions and point out possible damage to the property, beware of people who find something bad to say about every room in the house. You may be looking at someone who causes damage and refuses to pay for it or someone who is going to try and haggle you down in rent and damage deposit.

How committed are these people? Did they come prepared to pay a damage deposit and set a move-in date or are they asking you to hold the property without a binding contract and payment?

Approval Process:

Go through all the applications and the notes you made from your initial email and/or phone call. Check to see if there's any discrepancies between the two. For instance, if the initial phone call notes indicates they have pets and the application states they don't, be suspicious.

Check all landlord references carefully. Call their place of employment and make sure they actually work there in the capacity that they state. If they give you any other references (for instance, if your renter is a student with no prior rental history, they may give you the contact information for a school adviser or other individual), check those too.

Once You've Made Your Choice:

Have a comprehensive residential lease ready. When in doubt, contact an attorney who is experienced in these matters, as the law can vary from state to state as to what you are legally allowed to require and how you should word those requirements.

You don't have to rent to the prospective tenants if there is real trouble with the lease signing. If someone is arguing over every single lease item, it could be a sign of future difficulties with that person. It is perfectly okay to refuse to rent to someone who you feel isn't going to uphold the lease agreement.