February 4, 2025
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The Complete Guide to Tenant Screening

Introduction

The Landlord Journey

If you’ve read our Complete Guide to Finding Tenants, then you’ve posted your rental listing on popular websites using Avail and you have received 16 leads from prospective tenants. You’re now ready to start screening tenants and we’re here to help. Thoroughly screening your tenants will help you choose which of the 16 prospective tenants you’ll rent your unit to.

Our goal in creating the Complete Guide to Tenant Screening is to help you identify who will be a quality tenant, so you save time and stress down the road.

Identify Quality Tenants

Quality tenants pay rent on time and take care of your property. To spot a quality tenant, look for these five attributes:

  1. Ability to afford rent
  2. Job Stability
  3. Paid rent on time in the past
  4. Clean criminal record
  5. Responsible and timely

The chapters in our guide strategically map out the perfect screening process to help you identify the best tenants:

Chapter 1: How to Screen Tenants

Before screening tenants, you should think about your minimum criteria you expect of a tenant. Make sure your tenant screening process is set up to help you choose someone who meets those standards.

Tenant screening is easy if you use Avail. We provide all the tools you need, including a rental application, a comprehensive credit and background check, and more:

Tenant Screening with Avail

Chapter 2: Pre-Screen Tenants to Save Time

Pre-screening includes:

  • Creating a listing that highlights your requirements
  • Asking key questions during the initial conversation
  • Meeting the tenant in person at the showing

Pre-screening is invaluable because catching red flags early means you won’t waste time down the road. Usually, unqualified tenants will take themselves out of the running, so to speak. If a tenant stops replying after hearing your requirements, then it’s okay to let him or her fall off the map because you want the most interested and qualified tenants.

Chapter 3: How to Review a Rental Application

In your rental application, you should ask for:

  • Contact information
  • Current residence address and landlord’s name and contact info
  • Prior residence history including landlords’ names and contact info
  • Current and prior employers, job title, salary, length of employment, and reference to contact
  • Credit and background check authorization

At this stage, you should be checking a tenant’s income level. A general rule of thumb is to check if income is at least 3x the rent price. Depending on the tenant’s situation, you might be willing to accept a tenant even if his or her income falls below the 3x rule.

With this information, you can start the next steps of the process: reaching out to references and completing the credit and background check.

Chapter 4: How to Verify Tenant Income and Employment

Pre-screening Tenants Phone Call

Verifying employment is important for two reasons. First, you need to verify that the tenant is being honest about his or her income. Second, you want to make sure his or her references are telling a consistent story. In some cases, tenants submit fake references. We’ll teach you how to contact employers and what to ask so you can spot a scam and find out the most important information.

Chapter 5: Questions to Ask Prior Landlords

We strongly recommend contacting a tenant’s current and prior landlord. Sometimes a current landlord will lie because he or she is motivated to get rid of a problem tenant. A prior landlord, on the other hand, has no reason to lie. A prior landlord will tell you if a tenant skipped payments, was a nuisance to neighbors, or damaged the property.

Be aware that sometimes tenants have a friend or family member pretend to be a prior landlord. To verify a reference is a real landlord, ask about an available unit and see what he or she says before mentioning anything about a prospective tenant.

Chapter 6: How to Analyze Tenant Credit Reports and Background Checks

We offer comprehensive tenant screening services at Avail. Our credit and background check includes:

  • Complete account history
  • Credit score
  • Prior evictions
  • Criminal history
  • National sex offender check
  • Social security number verification

In chapter six, we go over how to analyze a credit report and tenant background check. We recommend requiring a credit score of about 680 or higher. 680 is a good rule of thumb, but you should use your best judgment about whether someone’s credit score is sufficient given his or her situation. And last, make sure they don’t have any outstanding debt, criminal history, or prior evictions.

Chapter 7: How to Accept or Deny Prospective Tenants

After following the steps above, the next step is telling an applicant yes or no. To accept a tenant, you can call or email. Be sure to outline the next step for your tenant, which is signing the lease.

If you are saying no, it’s best to decline in writing (email works), so you have evidence of how you rejected him or her, in case of a lawsuit. You can say:

“I’m sorry to let you know that [property address] is no longer available. At this time, we’ve rented the property to other applicants. Thank you.”

Many landlords are concerned with telling a tenant why they are saying “No,” but in our script you’ll notice we don’t provide a reason. Many tenants will just move on. If a tenant asks why, you can elaborate on the reason, just make sure it’s a legal reason to reject a tenant.

According to Fair Housing Laws, you cannot decline a tenant based on gender, age, race, ethnicity, etc. But you can decline a tenant based on his or her credit report, references, or income.

Final Thoughts

Tenant screening is the most important step you should take to protect your investment and make your life as hassle-free as possible. Now that you’ve been introduced to the topic, let’s get started by going over how to screen tenants and how to know if a tenant is a quality tenant.

Chapter 1

How to Screen Tenants

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How to Screen Tenants

Choosing the right tenant is a business decision. After all, you need a tenant who will take care of your investment property and will pay rent on time. How you choose the “right” tenant is important, and you have to be able to justify your decision for accepting or rejecting any tenant.

In this article, we’ll go over how to set up a tenant screening process and appropriate criteria for choosing a tenant. After that, we will dive into Fair Housing laws, because even the best-intentioned landlord can accidentally violate them in the tenant screening process.

1. Outline Your Tenant Screening Process

Below, we’ve listed the six stages of tenant screening. These stages are broken down in more detail in our tenant screening checklist.

6 steps of tenant screening

2. Determine Your Minimum Tenant Criteria

Tenant screening is only useful if you set criteria for what is acceptable in your property and what is not. Here is our recommended minimum criteria for landlords who want to avoid problem tenants:

tenant criteria for your tenant screening process

You are legally allowed to accept or deny a tenant based on the criteria above.

Some other criteria like “responsible” and “friendly” can be harder to determine. If you are rejecting a tenant because of a characteristic like this, make sure that you can attribute it to the rental process itself. Landlords sometimes skip crucial steps of the tenant screening process, like foregoing a tenant credit or background check. We strongly recommend that you follow every step of the process before accepting a new tenant.

3. Request a Rental Application, Credit Report, and Background Check

Once you’ve determined the criteria you’re looking for, you’ll need to request a rental application from the tenant to get their basic information, including rental and employment history. We also recommend requesting a credit report and a background check from all prospective tenants to give you a better idea of who you’ll be renting to.

Avail lets landlords manage all of their screening in one place. Once you’re ready to move forward with screening a tenant, you can send them a free digital rental application, and they’ll be prompted to authorize the reports you require. Avail also requests references from a tenant’s former landlord so you don’t have to.

4. Follow Through and Be Consistent

Consistency is key to not missing important details about a prospective tenant. If a tenant doesn’t agree to part of your screening process, then you shouldn’t move forward with that tenant.

Consistency also ensures that you are fair to every tenant that applies to your property, and helps you avoid a Fair Housing violation. Fair Housing laws protect tenants from unfair treatment, so if you require one prospective tenant to authorize a background check and not another, then that could be construed as unfair treatment and possible discrimination.

5. Comply with Fair Housing Laws

In order to run a compliant rental business, you need to follow federal, state, and local housing laws. Even well-meaning landlords sometimes have to deal with Fair Housing law complaints that could become costly. To avoid complaints, stay up to date with the Federal Fair Housing Act, which states that you cannot screen or deny tenants based on these protected classes:

  • Familial Status
  • Sex
  • Religion
  • Disability
  • National Origin
  • Color
  • Race

Some state housing laws add more criteria:

  • Marital status
  • Veteran status
  • Prior convictions/criminal record
  • Citizenship
  • Sexual orientation
  • Political ideology
  • Gender identity
  • Age
  • Participation in the Section 8 Program or other subsidy programs

Fair Housing Laws are important from the very first step when you create your rental listing. You cannot advertise preferences for certain types of tenants — for instance, you cannot say, “Looking for a young couple” or advertise your rental in another exclusionary way. Your listing should concentrate on the unit and amenities and avoid discriminatory language.

Again, your tenant screening process should have consistent requirements for every applicant. Your income requirement or late fee rule, for example, shouldn’t change based on who is applying.

You should comply with reasonable accommodations for a disabled applicant, should they request accommodations. And once you’ve signed a lease, you cannot end a tenancy for any discriminatory reasons based on the protected classes above.

6. Avoid Litigation During Tenant Screening

Tenant Screening Fair Housing Laws

The best way to comply with Fair Housing Laws is to avoid any and all discrimination. A landlord is discriminating if they:

  • Refuse to show an available rental unit to a particular candidate
  • Require different rules for identical units. For example, charging different rent amounts, different late fee rules, or different security deposits for different tenants
  • Tells a prospective tenant that a unit “isn’t right” for him or her
  • Tells a prospective tenant that a unit is not available if it is still on the market
  • Has a rental listing with specific tenant requirements that violate protected classes, like “no kids”
  • Refuses to accommodate a reasonable request for someone with a disability
  • Harasses or intimidates any prospective tenants or current tenants
  • Creates terms for renting to someone that are unfair, such as promising you will rent to someone if they do something for you in return
  • Steers certain tenants into a particular unit or neighborhood based on age, gender, or race, or any other protected class
  • Asks excessive or inappropriate questions during the tenant screening process

Examples of inappropriate questions include, “Are you married?” or “How many children do you have?” Even innocent questions have the potential to be discriminating, so it’s best to steer clear of these questions.

However, you are allowed to ask how many people will be living in the unit because you are entitled to know. Every individual who lives in the unit should be accounted for on the lease, even children and pets.

What Happens If You Are Accused of Violating Fair Housing Laws?

The penalties for a Fair Housing violation can vary. You could be fined or charged punitive damages. If you add to that the cost of a lawyer, then you can see how it becomes an expensive problem.

Even if it’s a minor case, you should consult a lawyer who has experience dealing with discrimination claims. They will give you the best advice to avoid excessive fines. The U.S. Department of Housing and Urban Development (HUD) processes most housing discrimination claims. They keep claims on file publically. This means that you have more than just an expensive problem — your reputation and the success of your rental business is at stake.

This is why we cannot stress enough the importance of having a standardized and consistent tenant screening process. If you follow our tenant screening guidelines, you’ll find quality tenants while complying with Fair Housing laws.

Easily Screen Tenants With Avail

Properly screening tenants used to be a manual process, but with the development of landlord software, you can manage your rental all in one place. Now that you know how to screen tenants while complying with Fair Housing Laws, the next step is creating a rental application for your property.

Create an account or log in to create a customized rental application that can be accessed online from any device.

Chapter 2

Tenant Pre-Screening Questionnaire: 12 Questions to Ask Potential Tenants

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Pre-screening prospective tenants is a great way to filter out unqualified leads before scheduling a showing or running a full rental background check. Instead of screening every interested renter, you can require them to complete a pre-screening questionnaire to see if they’re serious about renting and qualify for the unit based on your screening requirements.

To help you find tenants you love, here are the top questions to ask interested renters with a free pre-screening questionnaire.

What Is Pre Screening?

Pre-screening tenants involves interviewing an interested renter in person or online to evaluate their eligibility for your rental property. This exercise aims to highlight a person’s income, rental background, current living situation, credit score, and other important factors so landlords can determine if it makes sense to move on to the next step.

Requiring interested leads to completing a pre-screening exercise adds a step to the process requiring their time to provide the necessary information. So if you send them a questionnaire to complete, you’ll know if they’re serious about finding their next home based on how they respond.

If you choose not to pre-screen interested renters, you run the risk of wasting your time showing your unit and requesting rental applications from people who didn’t meet your screening criteria.

12 Questions to Ask Potential Tenants on a Pre-Screeening Questionnaire

Below is a list of questions to ask people interested in your rental property. You can ask these questions over a phone call or an online pre-screening questionnaire before scheduling a showing.

1. Why Are You Moving?

Renters will have varying reasons for seeking a new rental. Common reasons are:

  • Want to pay less in rent than they currently are
  • Relocating to a new city or state for employment
  • Want a smaller or bigger home
  • Need a pet-friendly rental
  • Want to live closer to friends or family
  • Renting on their own for the first time

There may be instances where they’ve recently been evicted from their previous home, but before using this as a factor in your decision, refer to landlord-tenant laws for screening laws.

2. When Are You Looking to Move In?

In most cases, renters are prompted to submit their ideal move-in date when submitting an online inquiry but it’s always good to double check by asking this in your pre-screening form. Most landlords require tenants to submit a non-renewal lease letter 30 to 60 days before their current lease ends so a tenant may want to move in within the next month or a month and a half, depending on their timing.

There are some cases where renters start their search 90 days out, but this may be to understand their local rental market or what their options are if they’re unsure about renewing or not.

3. What Is Your Monthly Income?

Renters can earn their income in various ways, such as through full–time employment, part-time employment, self-employment or freelance work, or rental assistance programs. In either case, they should be able to comfortably afford your rent price to reduce late rent payments in the future.

Most landlords require they earn at least three times the rent monthly in gross income. There are other income rules, such as the 50/30/20 rule, which advises renters to have 50% of their income going towards needs (which includes rent), but choose a criteria that feels best for you.

While you don’t need to verify this number at the moment, let them know that they’ll need to provide proof of income during the rental application process.

4. Can You Provide References from Your Current or Previous Landlords?

The best way to learn about a person’s renting history is by talking to their previous landlords. For that reason, you’ll want to know if the person can provide the contact information of their previous landlords to send an online questionnaire or call directly.

If you find that they’re hesitant to provide their landlord’s contact information, consider having a conversation as to why to better understand the situation before starting the application process.

5. Are You Comfortable Undergoing a Credit and Background Check?

If locally allowed by landlord-tenant laws, you can conduct a credit and background check to get the full picture of each applicant. However, to do this, applicants will need to authorize this with a social security number (SSN) or individual taxpayer identification number (ITIN) since these reports do request sensitive information.

Some international renters may be unable to complete this step, so ensure your screening process abides by Fair Housing and doesn’t discriminate against applicants.

6. Do You Have Pets?

Asking if a tenant has pets is helpful for both pet-friendly and no pets allowed rentals. On one hand, if you do allow pets, you can inquire about the pet type, the size, the breed, and confirm they can provide necessary pet records. You can also share pet-related fees you require such as monthly pet rent or pet deposit. If you don’t allow pets, you can let them know pets aren’t allowed so they can decide how to move forward.

As a reminder, service animals and in some states emotional support animals are not considered “pets,” so landlords cannot turn away applicants based on this. Doing so violates Fair Housing and other service-animal-related laws that can exist.

7. Do You Smoke?

The hope in asking this question is that the renter will be upfront about their smoking habits (if they exist). Either way, this question can segway into you sharing your non-smoking policy and where they can smoke without violating the lease if approved.

Even if they say they don’t smoke, it’s helpful to share your policy either way so they know what your expectations are as a landlord.

8. How Many People Will Live in the Unit?

States and counties can have occupancy limits per household, so ask this question to avoid overcrowding. For example, if they’re looking at a two-bedroom apartment, but planning to have 5 roommates, then this may not be allowed in certain locations. This is also helpful to ask if the renter does plan to have a roommate or find one at some point in the lease term.

If they do plan to have a roommate, remind them that the other person will also need to complete the screening process to be approved for the unit.

9. Have You Previously Been Evicted or Broken a Lease Early?

While it’s not super common, some renters can have an eviction on their rental history report. So to be proactive, you can ask this question to learn more about what happened and how they’ve adjusted their financial or renting habits since then.

For renters who broke a lease early, this can be a good way to know why and ask any clarifying questions you may have. Breaking a lease is usually only done during severe circumstances, like for safety reasons.

10. Can You Pay the Security Deposit and First Month’s Rent Upon Signing the Lease If Approved?

This question can help you understand their financial preparedness as they embark on their rental search. This also highlights to them what fees they’ll need to cover if they do get approved, which could be helpful for their own budgeting efforts.

11. What Is Your Preferred Lease Length?

This question isn’t always required to ask, but it could be helpful to double check their plans match the lease terms you’re offering. If you’re offering a 12-month lease term, but they’re looking for a short-term stay less than 6 months, then it may not be an ideal option for them.

12. Do You Have Renter’s Insurance?

If a renter is currently renting, they most likely have renter’s insurance already to cover potential damages or liabilities. You can inform them of your expectation for approved renters to have renter’s insurance and the minimum coverage requirements.

What To Do After Pre-Screening Tenants

Pre-screening tenants is just one step of the process, you’ll need to further verify and evaluate additional information to see if they’re a good fit. Once you’ve had them complete a pre-screening questionnaire, consider doing the following steps after:

  • Schedule a property showing for them to see the unit in person.
  • Request a formal rental application with relevant screening reports.
  • Contact their previous landlords to learn about their rental history in more detail.
  • Review their rental application and decide if they’ll be approved (or denied) for the unit. Make sure to provide a rental application denial letter that provides context on your decision.

Find Great Tenants With Avail

Pre-screening is a simple way for you to attract quality tenants, screen them, and save yourself time down the road. These questions can help you better assess a person’s eligibility before moving on to scheduling a showing.

Once you’ve pre-screened your leads and are ready for the next step, consider using tenant screening software. For example, Avail can help you easily request rental applications and add locally allowed screening reports for a one-time fee the applicant covers. Our system also automates landlord reference checks by sending them an online questionnaire to their provided email to save you time when finding your next tenant.

Get started today by creating an account.

Chapter 3

How to Review Rental Applications

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Beginning the tenant screening process with an online rental application is a great way to see whether or not an applicant is right for your property. You can add your own questions, add a credit or background report, and much more to properly screen a potential tenant. However, knowing exactly what to request from your tenant can be difficult to determine as a new landlord.

In this article, we’ve outlined the main information to include in your rental application when screening a potential tenant.

1. Your Tenant’s Contact Information

You’ll need to request basic information from your tenants, including name, email, and phone number. This allows you to identify the application and easily contact the prospective tenant if needed. If you use Avail to complete your tenant screening process, then your applications are always available to you, even once you’ve rented the unit.

That way, you can easily access important tenant information that is gathered in the application. And if needed, you can verify why you rejected other tenants.

2. Ask Important Tenant Screening Questions

The best way to gather information in your rental application is to ask questions. The questions you include can vary depending on what information you need. But as a general rule, the following questions you can include are:

  • Have you ever been convicted of a felony? A felony is a serious crime that typically involves jail time of at least one year. According to HUD guidelines, a tenant cannot be rejected just because they answer “yes” to this question. Some cities have even banned screening a tenant based on a criminal record, so make sure you know your local laws before adding this question.
  • Have you ever been evicted? Always keep circumstances in mind and give the tenant a chance to explain their situation if they have been previously evicted — especially if the eviction is related to something out of their control, like a global pandemic.
  • Have you ever refused to pay rent? The answer to this question will let you know whether or not the tenant has experienced previous issues with paying rent. If they answer yes, it’s advised to understand their reasoning as to why.
  • Do you smoke? This is an important question if you have a non-smoking property. Although you cannot deny an application due to them smoking, they should be advised of your non-smoking policies to avoid issues.

3. Verify the Information a Tenant Provided

By requiring a tenant credit and background check, you can learn more about their financial health and rental history all online. A background check will get provide you with information on their current and previous employment to verify their income and see if they can afford the set rent price. The information you’ll receive is:

  • Company name
  • Position
  • Salary
  • Company address
  • Reference information: name, email, and phone number

Keep in mind that if you reach out to an employer, they may only be able to confirm that the tenant is employed at that company and the length of time they have been employed.

An Avail rental application requires a tenant to enter their current employment and two previous work experiences. The application also asks for dates of employment so you can pay attention to work stability, or how frequently a tenant switches jobs.

example of an Avail rental application

As a landlord, you need to know if a tenant can afford your rent so you’ll need to verify your income. In addition to a rental application, it’s advised to request the following documents:

  • W-2
  • Pay stub
  • Offer letter with salary

Typically, monthly income should be at least three times the rent price. This ensures the tenant will have sufficient income to cover rent. However, there are a lot of situations where this rule may not apply. Gauging a tenant’s likelihood of paying rent comes down to more than just income level. It’s important to also consider job stability, financial history, and listening to prior landlord references. With all of these factors, you have a more complete picture to base your decision on.

4. Rental History

We recommend asking for at least five years of residence history to learn more about them as a tenant. The following information will be requested from a tenant:

  • Property address
  • Landlord name and contact information
  • Dates lived in residence
  • Reason for leaving

Once this information is provided, our system will automatically reach out to a tenant’s previous landlord to verify the information they provided on the rental application. All you have to do is log in to your landlord account to view the responses the previous landlord left and see if the tenant is the ideal for your rental property.

How to Screen Co-signers 

co-signer is essentially another person on the rental agreement who is financially responsible for payments. If your tenant hasn’t had a chance to establish credit or their income is too low, then a co-signer is a great way for you to ensure payments will be made.

On the rental application, you should ask the applicant if they will have a co-signer. Then, you can follow up with the co-signer because they will need to go through the tenant screening process just like any other applicant. This includes the rental application, a credit report, and a background check.

Make sure the co-signer is aware of the implications of co-signing. The co-signer will be responsible for the full rent amount if the tenant does not pay. Screening co-signers is extra work, but it adds to your certainty that you will receive rent each month.

Use a Comprehensive Rental Application

The rental application is an important tenant screening tool. On a basic level, it ensures the tenant is interested. Second, the application allows you to verify income and ask important tenant screening questions. We recommend using an online rental application, but you can download our printable rental application, too.

Next, learn how to reach out to a tenant’s employer and prior landlords.

Chapter 4

How to Verify a Tenant’s Income and Employment

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How to Verify Tenant Income and Employment During the Landlord Employment Verification Process

Verifying a tenant’s current income and employment is an essential part of the screening process. Not only does this ensure they can afford the rent you set in place for your rental property, but you’ll know whether or not the information they provided is correct.

In this article, we’ve answered the most common landlord questions about tenant references to help you feel confident when verifying a tenant’s income and employment.

How to Verify a Tenant’s Income

Prospective tenants can generate their income through full-time employment, part-time employment, self-employment, or rental assistance programs.

Here is an overview of how to verify their income during the screening process:

  • Request the most recent pay stubs: Pay stubs are provided to full-time and part-time employees. To check for consistency in income, request two to three pay stubs that show the applicant’s name, their employer’s name, and year-to-date earnings.
  • Employment documentation: If an applicant is starting a new position and is unable to provide pay stubs, consider asking for an offer or employment letter with the applicant’s salary, company’s letterhead, and address.
  • Review bank statements: Requesting two recent bank statements can give you an overview of an applicant’s deposits each month, which could be helpful for those who are unable to provide pay stubs.
  • Tax documents: Tax documents, such as W2s for employees or 1099 forms for self-employed individuals, can illustrate their earned income for the year.
  • Invoices: For self-employed applicants, request two to three of their most recent invoices to get a general idea of how much they’ve earned the past two months.
  • Proof of other income documents: Additional sources of income are housing vouchers, child support, alimony, Social Security Supplemental Security Income (SSI), or investment income. Request documentation that states how much the applicant receives to verify their income.

It’s important to note that some states prohibit income discrimination, meaning landlords cannot use how an applicant generates their income as a reason for denying their rental application. For more information, refer to your local landlord-tenant laws or consult with a legal professional.

How to Spot Fake Pay Stubs

As a best practice, look for the following when reviewing proof of income documents to avoid falsified documents.

  • Confirm the applicant currently works at the company
  • Verify the stated company exists and is currently in business
  • Check the numbers total to their annual income
  • Request additional information from the employer’s human resources team

Learn more about how to avoid falsified income documents.

How To Contact a Prospective Tenant’s Employer 

The best way to reach out to a tenant’s employer varies depending on their verification policy. Some companies prefer an email to a specific email address or have a phone number specifically to verify employment. If you’re unsure on how to go about this part of the process, you can run a Google search to see if there’s any information online on how they handle employment verification.

Both options are great ways to confirm whether or not the references they provided are real members of the company. If you plan to call an employer directly, we provided an example script of what to say on the phone:

“Hi, can I speak to [reference’s name]? I’m calling in regards to [tenant’s name]. [He or she] is applying to rent my property and I wanted to verify some information. Do you have a few minutes to chat?”

When Should You Reach Out to a Tenant’s Employer? 

It’s best practice to begin the verification process once a tenant has completed their rental application. Since most tenants usually begin their apartment search 60 days before their desired move-in date, landlords try to complete the screening process as soon as possible while taking the proper steps to screen a tenant.

You can handle this part of the process yourself, or utilize property management software platforms to make the process more streamlined for free. When a tenant completes a rental application on Avail, our system automatically begins the verification process by reaching out to previous landlords and sharing their responses through your landlord account. Credit, criminal, and eviction reports can also be added to an online rental application to keep all documentation in one place. Experience a more streamlined verification process by creating a free landlord account with Avail.

What Questions Should You Ask a Tenant’s Employer? 

Whether you’re emailing or calling, there are certain questions to ask to ensure a tenant can afford your rent. Here are the important questions to ask:

  • Can you confirm that [tenant’s name] has worked for you since [date of employment]?
  • What does he or she do for the company?
  • Can you verify that he or she makes [salary amount]?
  • Is [he or she] a responsible employee?

However, it’s important to note that some employers will only disclose employment status and dates of employment.

What If Your Tenant’s Employer Doesn’t Reply? 

There will be times where a tenant’s employer will not respond or provide answers to your questions, but you can always refer to their credit report for insights on their financial health.

A benefit to having a thorough tenant screening process is being able to rely on various forms of information to determine if a tenant can afford to rent your property.

What If an Employer Refuses to Say Anything?

It is possible that the employer will tell you they can’t release any information regarding income level or other questions besides verifying dates of employment. Keep in mind that employers often fear lawsuits. In this situation, a tenant could sue an employer if the employer says something to cause the tenant to be unfairly rejected.

This is why some employers may not reply or will only provide minimal information. They will sometimes only verify, “yes, [he or she] works here.” It’s ultimately the employer’s choice whether they disclose any information about an employee.

Remember, reaching out to employers is an important step to follow, but it’s not the only way to verify income. You should also have the tenant upload a W-2, pay stub, or offer letter in your rental application.

What If a Prospective Tenant Provided a Fake Reference? 

If the reference they provided seems illegitimate, then you can always do some additional digging online or social media to confirm your suspicions. While it’s never ideal to be provided falsified information on a rental application, this can happen from time to time.

To avoid signing a rental lease with a tenant that fails to share accurate information, you can run a thorough tenant screening process to get the full picture on who they are as a renter. Another option would be to deny the applicant due to being unable to properly verify the information they provided.

Should You Document Your Tenant Screening Process?

Every part of the tenant screening process should be documented for future referencing. Whether that’s the notes you took during the phone call with an employer or an email thread, everything should be saved to be able to easily access.

Landlord software like Avail keeps everything in one place, which can be accessed at any time and on any device.

Simplify the Landlord Employment Verification Process

Verifying a tenant’s employment can seem daunting at first, but this process can be easily streamlined with the right landlord tools. Avail allows you to advertise your rental property, screen applicants, and sign an online rental lease all online. Whether you’re a seasoned landlord or brand new to managing a rental, Avail can make renting easier for everyone.

Create an account or log in to start screening tenants.

Chapter 5

Five Questions to Ask Prior Landlords

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Five Questions to Ask Prior Landlords

The tenant screening process usually involves reaching out to previous employers and landlords to confirm the information a tenant provided is accurate. However, if you’re new to landlording, then you may not know what you can (and can’t) ask to properly verify the information that’s been provided to you.

For that reason, we provided information on the top five questions to ask prior landlords, as well as answers to common questions you may have on the process.

The Main Five Questions to Ask Prior Landlords

Similar to employment verification, landlords are not obligated to answer all of your questions since they can get in legal trouble for jeopardizing a tenant’s chance of finding a new apartment. But there are questions you can ask to verify the information a tenant provided and gain insights on how they are as a renter. Here are the main five questions to ask a previous landlord:

  1. Can you confirm that [tenant] rented from you?
  2. Did [tenant] pay their rent on time?
  3. Did [tenant] reasonably take care of the rental property?
  4. Was the unit clean and in good order when they left?
  5. Was [tenant] disruptive to other tenants or neighbors?

Once you have the answers to these questions, you can decide whether or not you’d like to move forward with this applicant.

What Should I Do If My Tenant Doesn’t List a Prior Landlord?

It’s possible your tenant won’t have prior landlords if the tenant has been living in a dorm or at a parent’s house. It’s also possible the tenant owned a home and decided to switch to renting.

If a tenant doesn’t have a prior landlord for you to reference, you can rely on the tenant’s credit check and a tenant employment reference. You can also ask for a co-signer to add to your sense of security. But if a tenant has a solid financial history, it’s likely fine that they don’t have a prior landlord.

Why Should I Reach Out to the Tenant’s Current and Previous Landlords?

Both current and previous landlords can provide information on how they tenant has previously treated other rental properties. While it’s not required to reach out to both types of landlords, it’s usually advised to do this when screening a tenant to avoid any hiccups during the lease term.

If you prefer to limit the amount of time reaching out to landlords, you can utilize property management software like Avail that can reach out to them automatically once an application is completed. Our system sends an email to the email address a tenant provided to complete a form with questions that can later be accessed through your landlord account.

What Additional Questions Can I Ask a Prior Landlord? 

Some of our questions below are designed to help you spot a fake reference, since tt’s possible your prospective tenant listed a family member or friend as a prior landlord. Below are key questions you can ask to help you spot fake landlord references:

  • Confirm that the tenant was indeed a former tenant of the landlord.
  • Confirm the address and the dates that the tenant lived there.
  • Ask, “I have the rent price listed as $[rent price]. Is that correct?”
  • Ask if he or she ever filed court papers against the tenant.
  • If a previous landlord has filed any court papers against the tenant, then this is a huge red flag and warrants good reason to reject a prospective tenant.
  • Ask if the tenant ever violated any terms of the lease. This includes damaging the property, not paying rent, hosting loud parties, or doing anything illegal on the property.
  • Ask if the landlord asked for a renewal. If they did not, then ask why.
  • Ask the landlord, “Would you ever rent to the tenant again?”

What Kind of Past Tenant Behavior Is Good or Bad? 

As you speak with a prior landlord, you’ll hopefully get an idea of how a tenant behaved in their last rental. The majority of tenants pay rent on time, don’t damage property, and don’t disrupt neighbors — all excellent tenant behavior.

However, if a prior landlord mentions that a tenant repeatedly didn’t pay rent on time, damaged the property, or received complaints from neighbors, this may be something to consider during the application process.

Determine If You Want to Move to the Next Step of Screening

The goal of reaching out to prior landlords is to find out relevant information about a tenant you may be renting to. You want to determine if the applicant will be a quality tenant and get an idea of how they will treat your rental property. If you hear good things about a tenant from prior landlords, then it’s time to ask your prospective tenant to authorize a tenant credit report and background check.

Get started screening tenants with Avail to access prior landlord references, credit, background, and eviction checks — all free for landlords.

Chapter 6

How to Analyze Credit Reports and Background Checks

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How to Analyze Credit Reports and Background Checks

So far in the Complete Guide to Tenant Screening, we’ve discussed:

The next step is to ask your prospective tenant to authorize a credit and background check. It’s understandable that tenants want to save money by handing out their own credit report, but as a landlord, it’s important that you don’t use reports given to you by the tenant. It’s a common tenant screening scam and there’s a possibility that the tenant has altered information in the report.

Luckily, it’s easy to require your own credit report using Avail. We are a trusted partner of TransUnion so our credit and background checks are accurate, comprehensive, and encrypted.

And luckily for tenants, they don’t have to pay separate application fees. Tenants pay for their credit and background check and can share it with as many landlords as they want through their Avail account.

Request a Tenant Credit and Background Check

To get started, you and your prospective tenant will create a free account with us. When tenants fill out our rental application, they are prompted to enter their social security number, which is sent directly to TransUnion, so you never have to see it. This provides tenants peace of mind and security.

Because the tenant is initiating the reports, you don’t need to be a verified “requestor” of credit reports. In fact, we’ve gone through the long and arduous process of becoming a verified “requester” so you don’t have to.

Not only does this save you time, but using Avail to perform a credit check also helps your tenant. Our credit checks perform a soft inquiry, meaning pulling the report does not impact the tenant’s credit score. Often, tenants will be worried that a credit report will negatively impact their credit score, but you can assure them that it won’t with Avail.

Analyze a Tenant Credit Report 

Our tenant credit report provides two important pieces of information:

  1. Tenant’s credit score
  2. Detailed financial summary

First, let’s go over how to interpret a tenant’s credit score:

The number we provide on our reports comes directly from TransUnion. The credit score is a single number that summarizes the tenant’s credit history. Some factors that positively influence credit score include:

  • Making payments on time
  • Little to no derogatory marks (bankruptcies, foreclosures, etc.)
  • Total number of accounts
  • Minimal number of hard inquiries

Credit scores range from 300 to 850. While the formula for determining credit scores is kept secret, it is understood that the higher the credit score, the better. A high credit score indicates a tenant is financially responsible.

Keep in mind as you are analyzing a tenant’s credit score that there are some situations that can negatively impact a credit score, even if a tenant is financially responsible. For example, people who lost their jobs during the recession or the COVID-19 pandemic may not have made all of their payments. Even once they’ve found a new job and begin making payments on time, their credit score will still reflect the times they did not make payments. These types of exceptions are important for you to consider, and we recommend you gather as much information as you can and then make your best judgment call.

The chart below will help you determine the next steps based on a tenant’s credit score, but remember, be sure to take circumstances into account and look at other proof of financial responsibility.

How to Analyze Credit Reports by Credit Score

Frequently, landlords look at the credit score and then don’t analyze the rest of the report. This is a huge mistake, as the majority of the information is found in the financial summary, including:

  • Current open accounts
  • Financed purchases (cars, student loans, etc.)
  • Mortgage items
  • Closed accounts with outstanding balances

We also include a tenant’s account history. This shows all of the tenant’s ongoing payments, including credit cards, loans, and mortgages:

Account History on a Tenant Credit Report

Payments that were paid on time are shown in green. If a payment is yellow, then the tenant paid late. And if it’s red, then the tenant never paid.

With this information, you can easily track if a tenant is making his or her payments on time. Ideally, you want a tenant who never misses a payment and never pays late.

You can also determine if the rent price is truly affordable for your tenant. If you add up the tenant’s monthly payments and add in your rent price, you will know the tenant’s total monthly expenses. If this number exceeds the tenant’s income, then you know they cannot afford your property.

Ideally, all of a tenant’s payments (including rent, loans, credit cards, etc.) should all comfortably fall below the tenant’s income.

In summary, the account history helps you determine:

  1. If the tenant will likely pay rent on time each month
  2. If the rent price is affordable

These are both good indicators of a tenant’s likelihood of paying rent each month. But remember, even an impressive credit report does not guarantee that you will receive rent on time.

Request a Tenant Background Check 

To make things easier for you, you can request single reports through Avail (i.e., just a credit report). This is important because some cities don’t allow landlords to screen based on a tenant background check — if your local laws don’t allow you to pull a background check, you don’t need to pay for one.

What’s more, our software clearly shows you when your tenant finishes each step of the application process. This clarity makes it easy for you to know where you’re at in your tenant screening process:

Analyze the Tenant Background Report 

After reviewing the credit report, the next step is analyzing the background check. Our tenant background check at Avail includes information from all 50 states. It verifies identity and a tenant’s social security number (SSN).

Our reports pull data from the following sources:

  • Felonies and misdemeanors from state and local jurisdictions
  • Sex offender public registries
  • Drug Enforcement Administration
  • FBI’s Most Wanted
  • Homeland Security
  • U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Most Wanted
  • U.S. Marshals Service Most Wanted
  • U.S. Secret Service Most Wanted Fugitives
  • U.S. Treasury Office of Foreign Assets Control (OFAC)

This includes data from approximately 700 sources of criminal, sex offender, and eviction records. Combined, these sources have nearly 300 million criminal records.

Ultimately, the goal of scanning these databases is to provide critical information about your prospective tenant. You’ll learn if your prospective tenant has a criminal history or prior evictions.

What To Do If Your Tenant Has a Criminal History 

First, you cannot deny a tenant just because they have a criminal record. If you use criminal records to discriminate against tenants, you can be held liable and end up in court.

If you do deny a tenant with a criminal record, you need to be able to prove that you have standardized screening policies in place to refuse tenants with certain convictions that would put your property or other tenants at risk.

There are five factors you should consider before declining a prospective tenant for having a criminal history.

  • Severity
  • Recency
  • Frequency
  • Relevance
  • Legal Considerations

Some criminal sentences carry legal restrictions that the individual has to follow. For example, sex offenders are typically not allowed to come close to schools or parks. If your prospective tenant is a registered sex offender, then it’s important to consider if they are legally allowed on your property, depending on how close your property is to a school or park.

Keep in mind that requiring a tenant background check also helps you avoid liability. If a tenant commits a crime, perhaps stealing from a neighbor, then you may be held legally responsible for allowing that tenant to live there. In court, ignorance is not considered an excuse, which is why it’s best to cover your bases and require a tenant background check.

Learn more about how to evaluate a prospective tenant’s criminal record and the reasons that criminal background checks are helpful in the screening process.

Use Your Screening Information to Make a Decision

Keep in mind that the information on a credit and background check is extremely personal to the tenant. Everything you learn in a credit report or background check must be kept confidential and should only be used to judge if they will be a responsible tenant.

Now that you’ve made it through all of the tenant screening steps, the next step is accepting or declining prospective tenants. Continue reading to learn how to accept or deny tenants.

Chapter 7

How to Accept or Deny Prospective Tenants

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Tenant screening is designed to help you find the best tenant for your rental property that’ll pay rent on time and not damage anything. Now that you’ve completed the screening process and verified the information the tenant provided, the next step is accepting or denying their application.

In this article, we walk you through the process of accepting or denying a tenant to help you feel confident every step of the way.

How to Accept a Prospective Tenant 

If your tenant screening was successful, you should be able to determine if a tenant is likely to pay rent on time and take care of your rental property. If you’ve found your ideal applicant, then it’s time to accept them.

You should accept an applicant via email. That way, you can follow up with next steps immediately. In your acceptance email:

  • Let the tenant know that your property is still available and you’d like to rent it to them.
  • Let the tenant know that the next step is signing a rental agreement.
  • Confirm the move-in date.
  • Discuss collecting the first month’s rent and the security deposit (if applicable).
  • Create a deadline for when you expect the lease agreement to be signed by. It’s reasonable to ask a tenant to sign a rental agreement within 24 to 72 hours of providing the agreement.

Set a deadline for signing the rental agreement to ensure the agreement is carried out in a timely fashion. This is easy to do if you are using an Avail online rental agreement since you can create, customize, and sign it all online.

For the first month’s rent and any deposits, it’s advised that they be paid within a week of both parties signing the rental agreement. This should occur before the tenant receives a key to the unit and moves in. Be sure that the rent and deposit clears in your account, as sometimes tenants will initiate payments that don’t go through. This helps protect you from tenant scams.

Next, you’ll want to set up a method for collecting rent. Collecting rent online is extremely easy with Avail. Simply set up charges and send them to your tenants. Your tenant can pay with his or her bank account, debit card, or credit card, and it will land directly in your bank account. No more checks or waiting for standard mail.

Legal Implications When Denying Prospective Tenants 

Accept or Reject Tenants

The reason why you deny a tenant can have legal implications. You cannot reject a tenant based on:

  • National origin
  • Race
  • Color
  • Religion
  • Sex
  • Familial Status
  • Disability
  • Marital status
  • Veteran status
  • Citizenship
  • Sexual orientation
  • Political ideology
  • Gender identity
  • Age
  • Participation in the Section 8 Program or other subsidy programs

Make sure you can pinpoint the reason why you’re denying an applicant. And even better, back up the reason with your notes and forms (a rental application, an email from an employer reference, etc.).

How to Say No to a Prospective Tenant 

We recommend declining applicants in writing (email is best). If you’ve rented the unit to another applicant, you can say:

“We’re sorry, but we’ve rented the unit to another applicant. Thank you for your interest.”

Remember, you cannot tell an applicant that the unit is rented unless it has actually been rented. This is why we recommend that you accept a tenant first, make sure this tenant is moving forward with the lease signing, and then reject all other applicants. However, if you haven’t yet rented the unit, you can say:

“We’re sorry, but we’ve decided not to move forward with your application. Thank you for your interest.”

Many landlords wonder if they have to provide their prospective tenants a reason for the rejection. You are not legally obligated to provide a reason; however, if a tenant reaches out and asks, the professional thing to do is inform the tenant of your reason. It’s also legally risky not to provide an answer, as the tenant may be motivated to seek legal action in order to find out.

There is one exception to this rule: You need to tell a tenant if you are rejecting them based on a credit report. According to the Fair Credit Reporting Act (FCRA), any user of a credit report must notify the tenant when an “adverse action is taken” based on information in the report.

In other words, if you are rejecting a tenant based on credit score, debt, missed payments, or any information you found in a credit report, then you should notify the tenant of this reason.

Learn more about approving and rejecting tenants the right way.

Use a Tenant Screening Checklist

The most important part of tenant screening is making sure you have a standardized and consistent process. This helps ensure you tick all screening boxes, don’t miss anything major, and don’t violate Fair Housing laws.

To help you navigate the entire tenant screening process, use our tenant screening checklist.

Chapter 8

The Complete Guide to Tenant Screening Summary

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The Complete Guide to Tenant Screening

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After finding tenants with an effective online rental listing, the next step is to screen tenants to find the best tenant for your rental property. Finding quality tenants doesn’t have to be hard — tenants comprise 35% of the U.S. population. With so many tenants looking for their next rental property, we are confident you will find the right one.

Why Should You Care About Tenant Screening? 

Tenant screening helps you find a tenant who will reduce your costs. Quality tenants pay rent on time every month, they don’t damage your property, and they don’t create expensive legal headaches.

Plus, with a quality tenant, you might renew your rental lease, which will save you the additional cost of having to find new tenants. This all leads to one important factor: increasing your investment profits.

In this Guide to Tenant Screening, we’ve thoroughly gone through each step of the tenant screening process. Below, we summarized the main points for you.

The Main Takeaways from the Complete Guide to Tenant Screening 

1. How to Screen Tenants

To be successful at tenant screening, you need to have a plan and follow it. It’s common for landlords to skip steps, which is very risky. You might end up renting to someone who doesn’t pay rent on time or causes you legal or eviction issues.

With a consistent screening process, it’s also easier to avoid Fair Housing violations. It’s considered discrimination to require different screening steps for different tenants, so it’s essential that you follow a consistent process.

2. Pre-Screen Tenants to Save Time

Pre-screening helps you attract quality tenants and dissuade bad tenants. You can pre-screen tenants with your:

You don’t want to waste your time or energy on tenants who aren’t a good fit. Our tips will help you eliminate bad tenants before diving into the nitty-gritty of tenant screening: the rental application, tenant references, and a credit and background check.

3. Review Rental Applications

The purpose of the rental application is to gather information and ask the right questions. With an online rental application, you can receive all of this information faster. You can even verify income by having your tenant upload a W-2, pay stub, or an offer letter.

Our five rental application questions help you determine if a tenant meets the criteria to rent your apartment. We also provide advice on rental property co-signers, and recommend having co-signers go through the tenant screening process just like any other applicant.

4. Verify Tenant Income and Employment

Reaching out to employer references informs you if a tenant is responsible, a stable employee, and is likely to pay rent on time.

Most landlords ask an employer how long the tenant has worked at the company, verify his or her salary, and the tenant’s position at the company. The more information you can learn, the better, but keep in mind that many employers will only verify dates of employment.

5. Contact Landlord References

The second reference for you to reach out to is the tenant’s prior landlords. Prior landlords can provide relevant information — they will let you know if a tenant paid rent late, hosted loud parties, damaged the property, or caused any legal headaches.

6. Analyze Tenant Credit Reports and Background Checks

Tenant credit reports provide valuable financial information. The credit score is a reflection of making payments on time, having long-standing credit accounts, and any financial hardships (bankruptcies, foreclosures, etc.).

Tenant background checks also provide valuable insight. While you cannot deny a tenant just because they have a criminal record, you can have standardized screening processing in place to refuse tenants with certain convictions that would put your property or other tenants at risk.

Keep in mind that you need to be able to prove that you aren’t discriminating based on a criminal record during the screening process, and that some cities have banned screening based on a criminal record altogether.

7. Accept and Decline Prospective Tenants

Once you’ve gathered all of this information, it’s time to make a decision. Make sure you’re properly (and legally) accpeting or denying a tenant. Once you accept a tenant, you’ll need to have a rental lease ready for them to sign.

Signing a Rental Lease Agreement

Signing a Rental Lease Agreement after Completing Tenant Screening

Once you’ve accepted a tenant, the next step is signing a rental lease agreement. As you move forward, it’s important to continue the mindset of tenant screening. You should be screening tenants even as you sign the lease. Writing, customizing, and signing your own rental lease agreement can be difficult. Lawyer fees are expensive and understanding lease terms isn’t always easy, which is why we’ve worked hard to improve the leasing process for you.

Our online rental agreement is lawyer-reviewed, state-specific, and easily customized. You can edit your rental agreement and have it signed in a few clicks, rather than hours of printing, scanning, or faxing paperwork back and forth.

 

https://www.avail.co/education/guides/complete-guide-to-tenant-screening

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