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How to Screen Tenants for Rental Property: 2023 Landlord’s Checklist

how to screen tenants

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Getting a good tenant who will take care of your property, pay the rent, and not be a constant pain is one of the most critical tasks during tenant screening. An effective tenant screening process helps identify high-quality tenants, leading to increased occupancy rates and improved profitability.

After a prospective tenant expresses interest in renting the property, it is important to have a rental application prepared and available for them. The application should focus mostly on rental history, monthly income, and court records.

In this article, we will discuss how to screen tenants for a rental property effectively. We will also share the best ways property management OKC performs while screening tenants.

What Is Tenant Screening?

Tenant screening is a landlord’s process to evaluate prospective tenants before approving them to rent a property. The primary goal of tenant screening is to have a qualified tenant with carrying responsibility and the ability to live in the rentals.

Thorough tenant screening gives confidence to landlords. They can ensure tenants make rent payments on time, keep the property safe and well-maintained, and comply with lease terms and rules. A landlord’s first defense against problem tenants is an effective tenant screening process. It helps avoid issues that can lead to legal disputes and financial losses.

What To Consider During The Tenant Screening Process

While landlords have certain rights regarding their properties, they are not all-powerful regarding tenant relations. There are important limitations every landlord needs to understand to stay in legal compliance at the local, state, and federal levels.

Though specific rental and fair housing statutes vary across jurisdictions, core tenant protections exist nationwide. Landlords cannot simply refuse housing to protected classes of renters based on discriminatory motivations. Actions like denying tenants due to race, religion, national origin, familial status, disability, or domestic violence victim status are deemed unlawful. Violators face penalties, including civil lawsuits and fines from agencies like HUD.

Also, landlords must adhere to security deposit laws, only retaining amounts permitted to cover legitimate expenses like property damage. Arbitrarily withholding security deposits as “punishment” for tenant actions is illegal in most states, absent proper documentation.

Other common constraints imposed on landlords relate to privacy intrusions, retaliation against tenant complaints, neglecting habitability standards, or unlawfully attempting “self-help” lockouts and evictions.

While entitled to set rules and screen tenants judiciously using appropriate criteria, landlords cannot exploit their position to harass, endanger, or discriminate against residents. Checking local statutes, consulting attorneys when unsure, and treating tenants fairly demonstrate professionalism. Educating oneself on landlord-tenant laws prevents missteps that could unknowingly spur investigations or legal actions from overstepping bounds. Responsible rental ownership means putting aside misconceptions about unchecked powers and respecting the rights afforded to tenants through legislative protections.

What To Look For When Screening Tenants For A Rental Property?

Tenant screening is conducted to assess and mitigate risks. You have to establish some non-negotiable minimum requirements to protect your financial health before meeting your potential tenants. Establishing certain requirements ensures that you don’t get problems in the future after renting out like late or no payments, criminal activity, noise problems, complaints, poor condition of the property, or eviction. Here are a few criteria to look out for if you want to know how to screen potential tenants and do it on your own:

  • Credit History
  • Income and Employment History
  • Personal References
  • Rental History
  • Background Check

A low credit score or red flag on a credit report doesn’t necessarily mean that the potential tenant will be a problem in the future. So, in such a case, you can be a little flexible and let them through, but only if they have someone to vouch for them and cosign on the lease agreement.

If the tenant has a criminal history, eviction history, unstable employment history, late payments history, etc., then you might consider asking the tenant for an explanation. These factors are enormous red flags during the screening of rental applicants. You might face problems in the future with such tenants.

Recommended Article: Section 8 Rules and Regulations for Landlords

How to Screen a Tenant: 5 Essential Tenant Screening Process

The tenant screening process is most important, and executing the best practices without any troubles can be overwhelming. Here are the best ways to screen tenants and find the perfect tenant for your rental property:

Step 1: Request a Tenant Application

A residential rental application is a document that a prospective tenant fills up if they are interested in renting the property, completes it, and submits it to the landlord or property manager. OKC Home Realty Services has provided online rental application submission facilities. The advantage is that the potential renters can fill in the application at home and don’t need to visit the office. The prospective tenant can even pay their application fee for showings and follow-ups. To request, they must complete the application once they have viewed the property.

The rental applications also contain explicit language in which the tenant authorized us to obtain their credit information for the approval process. Without that permission, we are not legally allowed to obtain that information. 

Things to review on a rental application

Step 2: Perform a Credit, Rental & Background Check

Credit Check

A credit check provides a meaningful score as the tenants’ willingness and ability to pay bills. It also shows a long track record of financial behavior, both good and bad.

One of the other benefits is that it can provide confirmation as to where a prospective tenant claims to have been living. Or, it can prove they did not live where they say they had been living.

If they have decent credit and are used to paying their bills on time, there is a better chance that they will also pay their bills on time.

What does a credit history tell you?

A credit history can help a landlord or the property manager to determine whether a prospective tenant is financially responsible or not and pay rent on time. It also provides the individual’s overall financial stability and creditworthiness.

For more information on how credit checks can support the tenant screening process, refer to this article: How to Perform Background Checks on Tenants?

what does a credit check tell you

For the purpose of carrying out a credit check, the tenant screening application form should at least include: 

  • The Full Legal Name of The Resident 
  • Addresses for the past two years, at least
  • The number for Social Security
  • Birth Date
  • The Current Boss 
  • Contemporary Landlord

However, there are a few things you can review to help with your decision if you’re considering renting to someone with low credit.

Rental History Check

A rental history check is an essential part of the tenant screening process. It allows you to gather information about a prospective tenant’s past rental experiences and assess their reliability and suitability as a tenant. Rental history reports provide key information on rental applicants’ previous addresses, how long the applicant resided at each address, and contact information for each landlord or property manager.

Last 12 months of Rental History – Gives You Trust Towards Tenants

We need to have a complete history (i.e., continuous) for the last year. A clean rental history is essential. Any evictions within the past five years may require the applicant to pay the first and last month’s rent, a higher security deposit or may result in application denial.

We want to be convinced we’re actually talking to their landlord when we call their reference. But we don’t stop there when we screen screen prospective tenants, for our Oklahoma City rentals.

 If that’s not enough to sway you, remember that evictions cost $3,500 per unit on average and can take up to four weeks for the whole process to run its course.

Also Read: What is Rental Verification Process & How to Verify Tenant Rental History

Background Check

A background check can reveal any criminal records an applicant might have, along with public records, which indicate if the applicant is being sued for things that could affect their ability to pay rent on time.

Step 3: Verify the Prospective Tenant’s Income

According to a study by TransUnion, 84% of landlords identified rental payment concerns as their primary issue, given the potential expenses associated with the Oklahoma eviction process.

OKC Home Realty Services requires that a Tenant’s take-home pay be at least three times the rent. They must provide proof of that income in the form of pay stubs or bank statements. We won’t budge on these requirements. However, there are exceptions. These include:

  • Federal Housing Assistance in the form of Section 8, in which some of the rental properties we lease are eligible.
  • If a property is all bills paid, we will lower the income requirement because the tenant will not pay as much for utilities.
  • If the Tenant pays for the lease upfront. Sometimes, they may not have an income but have plenty in savings for some reason.
income insight report

Step 4: Check Court Records

Landlords need to check the state records of applicants. The property management company provides access to Tenant Screening Criteria to provide tenant background checks that help property owners.

We consistently cross-reference the tenant’s name and social security number with the online database of the Oklahoma Supreme Court system. I’m looking at what their situation has been for the last five years or so. 

Any evictions should show up. You’ll also see minor offenses like speeding. Red flags for us are evictions, drug convictions, or other felony offenses in the last five years. 

If they’ve had a felony, that was 5 years ago, but nothing since we will take that into consideration.

The Fair Housing Act requires some measure of leniency with regard to the criminal record. It requests that tenants with criminal records be given a fair shake. In my mind, this is common sense as we never want to turn away prospective tenants with the ability and willingness. To pay rent, even if they have a checked past.

eviction chart

Get to know how you can minimize the rental vacancy rate of a property.

Step 5: Make a Decision

To make the decision less emotional and based strictly on credit, we use a scoring system for every applicant. We create a numerical score based on the screening criteria, weighing the three factors that make the biggest difference (income, background check report, and previous landlord of reference) the most. By using this system, we are far less likely to violate Fair Housing guidelines.

At OKC Home Realty Services, we follow this proven best method for screening tenants. A thorough tenant screening process can prevent a landlord from getting bad renters which can lead to eviction. Learn about Oklahoma’s notice to vacate.

Important Questions to Ask During a Tenant Screening Process

When screening prospective tenants for a rental property, it is important that you ask them certain questions to gather relevant information. These questions aim to gather information on the applicant’s financial stability, rental history, and suitability as a tenant. Here are some questions you need to ask them:

  • When do you want to move in?
  • How many people will be living in the rental property?
  • Do you have any pets? If yes, what type and how many?
  • What is your current employment status and income?
  • Can you provide proof of income, such as pay stubs or bank statements?
  • Have you ever been evicted from a rental before?
  • Can you provide references from previous landlords?
  • Are you willing to undergo a background and credit check?
  • Do you have any criminal history that may affect your tenancy?
  • Have you ever filed for bankruptcy?

[Also Read: Can Landlords Ask for Bank Statements for a Rental Application]

How to Turn Down An Applicant?

Remember that turning down a rental applicant is a very sensitive matter that should be handled professionally and in compliance with fair housing laws. Here are some steps to follow when turning down an applicant:

1. Review the application carefully including the rental history, credit check, employment status, and any other relevant factors that influenced your decision.

2. Identify the specific reasons which aid your decision to turn down the applicant. Ensure that your decision is based on legitimate factors such as inadequate income, negative rental history, incomplete application, or failure to meet your rental criteria.

3. Draft a polite and professional letter or email to inform the applicant of your decision. Be specific with the reasons without violating any fair housing laws.

4. You don’t need to provide an exhaustive explanation, but you can offer a general reason for rejection. It will help the applicant understand why they were not selected.

5. Return any relevant documents of the applicant with their application, such as pay stubs or identification.

6. Keep a copy of the rejection letter or email for your records. These documents can be helpful in case of future inquiries or disputes.

How Long Does Tenant Screening Process Take?

The duration of tenant screenings can vary significantly, ranging from a few hours to several days, depending on the thoroughness of the landlord’s screening process. Several factors influence the tenant screening report timeframe, including the requested information and the past residency locations of the prospective tenant. Credit checks are generally quick and can be completed within minutes, while criminal background checks can be conducted in real-time or near real-time, providing prompt results.

What Consequences Landlords Faced For Accusing the Violation of Fair Housing Laws?

Landlords can face a legal issue if they are accused of violating fair housing laws by discriminating against tenants. Landlords should take compliance seriously to avoid risks of penalties, lawsuits, and reputation damage from discriminating against protected classes. Here are the potential consequences:

  • Complaint Filed – If a tenant or housing agency files a complaint, the Department of Housing and Urban Development (HUD) or state/local fair housing agency will initiate an investigation.
  • Evidence Gathering – Investigators will interview witnesses and review rental records, advertisements, and other evidence to determine if discrimination likely occurred.
  • Landlord Interviews – The accused landlord can provide their perspective and documentation during the investigation.
  • Finding of Violation – If investigators find sufficient supporting evidence, they will formally determine that the law was violated.
  • Fines and Penalties – Civil fines of $10,000 to $50,000 can be charged for each violation, depending on severity.
  • Legal Orders – Agencies may order landlords to halt discrimination, make policy changes, submit compliance reports, and undergo fair housing training.
  • Lawsuits – Fair housing regulators or the DOJ can file lawsuits against violators seeking monetary damages for victims.
  • Loss of Licenses – Local rental licenses needed to operate may be suspended or revoked.
  • Criminal Charges – Serious or repeated fair housing violations can result in criminal prosecution.
  • Reputation Harm – Fair housing violations generate significant negative media coverage that damages landlord reputations.

Screening Tenants Conclusion

A rental property should bring a profit to the landlord because it is their investment. To grab a good amount of profit, landlords must take time to understand how to screen tenants to avoid tenant problems in the future. This also helps maintain a good landlord-tenant relationship if the tenant has a favorable background. Landlords can also take the help of online screening tools for more accessibility.

If you have a headache in tenant screening, contact OKC Home Realty Services. We are the best property management company in Oklahoma to offer tenant screening services for making every landlord stress-free.

Frequently Asked Questions (FAQs)

What are the most important things to consider during screening tenants for rental property?

The following are the essential things to consider while screening tenants for rental property;
1. Credit Report/Score
2. Criminal Background Checks and Eviction Checks
3. Current Income
4. Landlord References

What makes a Credit Check fail?

Some of the most common reasons for a credit check failure could include:
1. No way your name and address could be verified.
2. You may have failed a credit check, not due to any financial difficulties, but because the landlord was unable to confirm who you are and where you live.

How long does it take to screen tenants?

It depends on various circumstances. Usually, the whole application process takes just a few days, ranging from 48 to 72 hours. It may take longer if the landlord is not responsive to the reference.

What is a reasonable Credit Score?

Ideally, an applicant will be in the 700+ range. Somewhere between 600-700, is also acceptable. If it is 500-600, the other parts of the applications need to shine.

What are the steps in the Tenant Screening process?

The 6 key steps to effectively screen potential tenants are:
1. Fill up the application form.
2. Perform a Credit, Rental & Background Check.
3. Verify the Prospective Tenant’s Income.
4. Keep a record of the Last 12 months of Rental History.
5. Check Court Records (social security number).
6. Make a decision.

What are some important questions to ask a prospective tenant?

1. How long have you stayed in your current residence?
2. Why are you moving from your current residence?
3. Are you earning? What is income status good?
4. Do you agree to a credit or background check?
5. Do you have references from former landlords?

Can I use an online tenant screening service?

Yes, you can use an online tenant screening service, as many online services offer comprehensive tenant screening, making the process more accessible and efficient.

Can landlord deny an applicant with a criminal history?

A landlord can consider an applicant's criminal history, but it should be relevant to your property's or other tenants' safety.

scott nachatilo

Author

Scott Nachatilo is an investor, property manager and owner of OKC Home Realty Services – one of the best property management companies in Oklahoma City. His mission is to help landlords and real estate investors to manage their property in Oklahoma.
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