There is a checklist of items and procedures to consider and to successfully check off, to adequately pre-screen a tenant whom you are considering renting your property to.
Pretty much most genuine tenants will understand this and be willing to provide you with the information you require. In the event the tenant is either unwilling or the information provided to you doesn’t seem quite right, this should raise red flags to you and you should seriously consider if you want them in your property.
Generally, here is a list of items you should request from any tenant applying to rent your property:
Completed tenant application form.
Application Fee to process the application.
Photo ID in color (driver’s license or passport).
Social Security Number.
2 months proof of income (employment pay-slips, or proof of bank deposits).
If self-employed, 2 years of tax returns with supporting letter from CPA.
If they have pets; photos of the pets as proof of what they are.
Additionally, you will need to carry out several other checks, which you need to obtain yourself.
There are several tenant screening services you can find online which have varying degrees of background checking. It is recommended you pay the extra money for more extensive checks which include;
Credit report/credit check:
Look for the credit score to be higher than 620. If lower than this, you might consider still renting to them but ask for a higher security deposit to offset the greater risk. Look for bankruptcies, and if there are any, which chapter of bankruptcy?
Landlord Tip: If they do have poor credit and are unwilling to provide a greater security deposit, do not rent to them. These days, tenants expect that there is a trade-off for bad credit, i.e the landlord will expect more from them to have skin in the game and reduce landlord risk.
Landlord Tip: if their credit report shows a large amount of charge-offs/collections, it is a sign the tenant is irresponsible with budgeting and might not be able to adequately plan to pay rent.
Nationwide Eviction check:
Do not just check for evictions in the state of Florida. Check for evictions NATIONWIDE. Many tenants will flee from an eviction hoping it will never be found by the new landlord.
Sex offender check:
Make sure the background check includes the sex offender registry. There is great risk for you as a landlord if your new tenant is a sex offender and is required to register as such. Especially if your property is near a school or child friendly facility.
Previous landlord reference:
Do not assume what the tenant tells you is accurate!! Call the person they list as their previous landlord and actually speak to them. It is very common for a tenant to falsify their previous landlord to hide their poor tenant history. You need to ask if rent was paid in a timely manner. If late, did it get paid along with any added on late fees? Did they leave owing the previous landlord money? Did they leave the property in good repair?
Landlord Tip: if the reference comes back as perfect—it should raise red flags!!
Most tenants pay late at some point and/or have had some issues with landlords. Perfect references can mask the fact the landlord wants rid of them !
Landlord Tip: If tenant says they have been staying with friends – double check. If they are in a hurry to move in – ask why. If they want to pay cash or extra months’ rent or higher security deposit – ask why
Employers Reference:
Call the employer and verify the tenants do in fact work there and they are getting paid what they say. Many times tenants will falsify income/job info to obtain a rental higher than they truly can afford. Ask if the position is permanent or temporary. If it is a temporary job, your new tenant may not be able to pay rent a few months down the line.
Landlord Tip: Multiply your rental price by 3. If the tenant does not at least make this amount monthly, then they will not be able to reasonably afford the property. Note; income must be local Florida income.
Criminal Record Check:
Here you are looking for felony convictions. (Especially drug related or violent offences). These should be immediate grounds for denial. For misdemeanors and minor traffic infractions these are generally accepted in the renting industry as so many tenants have them these days.
These are the general guidelines to use as your procedures for screening a potential new tenant. In the event you do not wish to approve a new tenant then you must issue them an adverse action letter notifying them they have been declined and do not meet your selection criteria.
Landlord Tip: Under no circumstances must you decline a tenant based on race, sexual orientation, gender, religion, familial status, disability or protected class according to HUD. You should check the protected classes on the web prior to issuing such a declination letter.
