Screening tenants is a crucial part of any landlord’s job. Irresponsible renters who don’t take care of your property, can’t pay rent on time, and are unresponsive can make a landlord’s life more difficult than it has to be.
While it’s never good to judge a book by its cover, there are some red flags to look out for during the tenant screening process that may indicate future difficulties between you and your tenant. There is no sure way of knowing if someone will be a quality renter from just a few meetings, but there is still a lot you can learn from their application and brief interactions. We previously discussed red flags for renters, but here are some red flags to look out for when choosing a potential tenant that may indicate problems down the road.
Low or Unstable Income
A tenant who doesn’t have enough income to make rent payments on time will cost you money and add stress in the long run. If a renter is unable to make full payments on time, you’ll have to endure periods without that income and potentially go through the added expense of an eviction. Remember, just because a tenant isn’t paying their rent doesn’t mean you can skip out on your mortgage payments!
Tenants with an income somewhere around 2.5 or 3 times the amount of rent is a good indicator that they’ll have enough money to comfortably afford rent payments every month. You can verify an applicant’s income by requesting their W2. Asking for this might seem a bit excessive, but it's important to have this proof of income to ensure they will be able to sustain paying rent throughout the leasing period. This is also a good chance to look at their employment history and see if they have sporadically moved between jobs in the past. If their employment hasn’t been stable, this could indicate they may end up without a job or could likely move to another area for work and terminate their lease early.
Poor Credit Score
A tenant’s credit score indicates their history of paying their debts on time which is important to know about given this is someone you will be collecting a monthly check from. Those with higher credit scores tend to be more responsible not only with their finances but with their personal behaviors as well. Their score can be used as a measure of how likely they are to fulfill their financial obligations on time.
Typically, anything below 600 is considered a poor score and should raise some red flags. It’s important to note that you must get written consent from your prospective tenant to run a credit check, and if they refuse, this is another major red flag indicating they might have something to hide.
Problems With Previous Landlords
It's insightful to get an understanding of what your prospective tenant’s relationship was with their previous landlords; a poor history could mean you are next in line to inherit difficult tenants. Ask for a tenant review and landlord references, and then follow up with them to see what they have to say.
If the renter had a poor experience with their previous landlord, they could have asked a friend or family member to write them a raving tenant review. It’s therefore important to follow up with the tenant’s previous landlords directly to get an accurate picture of what they were like. Focus your questions on renting behavior such as making payments on time, property damages, communication, if the security deposit was returned, and if they terminated the lease early. This is the most important type of information to get from previous landlords to understand how reliable the candidate will be as a tenant. Additionally, if the tenant themselves speaks negatively about their previous landlords, this also indicates previous problems that could carry over if the tenants are at fault.
Trying to Rush the Process
If an applicant is trying to speed up the application process and is desperately requesting to move in as fast as possible, look into why this is. Hopefully, it’s because they just moved to the area or are just excited about starting a new chapter living on their own.
However, it could mean they have terminated their previous lease sporadically and without notice. Perhaps something involving their previous rental went poorly, they were just evicted, they can’t make rent payments in their current place, or there was a conflict with their previous landlord that is pushing them to get out ASAP. It’s important to do some digging as to why they are eager to move in so fast.
Lying on the Rental Application
When accepting a tenant application, you must thoroughly examine the accuracy of their information. You don’t know much about your prospective tenant, so it is important to double-check that what they stated regarding income, references, employment, eviction history, credit score, etc. is correct. Should you uncover that they lied on the application, this is a pretty good indicator they would lie about other information down the road. Honesty from both parties is essential for a healthy relationship between tenants and landlords.
The most common reason for eviction is the nonpayment of rent, but there are a variety of potential reasons such as drug use, property damage, or breaching any other terms of the lease. Whatever the reason may be, an eviction history raises a huge red flag that should not be ignored. Their history can be detected by running a thorough credit check or discussing it with their previous landlord.
Landlords must provide an eviction notice prior to going through with any legal proceedings. So if your applicant has a previous eviction, they knowingly violated terms of the lease to the point of having been forcibly kicked out. Going through an eviction can mean months, if not years, of added stress, legal fees, and no rental income. At the end of the day, it’s best to avoid putting yourself in a position where this is a high possibility to begin with.
Tellus Tenant Screening
When picking renters, the Tellus superapp’s tenant screening feature is the easiest, most comprehensive way to run a background check. The check reports everything you need to know about your applicant including credit scores, rental history, debt-to-income ratio, criminal background, and more. This guide will walk you through what each page of the Tellus background check contains and help further explain how thorough Tellus tenant screening is. Using Tellus ensures the information collected is accurate compared to accepting credit reports and documents directly from the tenant which could be tampered with.
During the screening process, it is essential to remain objective and fair when analyzing potential tenants. Some factors should not be considered as part of your analysis or influence your decision as to whether or not to accept a new renter. Your breakdown should be based on proven behaviors and factual information. Not only is it immoral, but it is illegal under federal law to consider factors such as race, color, religion, disability status, sex, national origin, and familial status when screening a tenant. Being a landlord comes with immense responsibility, so it is important to remain unbiased in how you treat applicants.
It’s important to keep in mind that these red flags don’t necessarily guarantee problems down the road. Although unlikely, a tenant could have all of these and end up being an outstanding renter that took great care of your property. However, should any of these become apparent, keep it in mind when going through the screening process. Best practice is to address your concerns with the tenant directly to get to the bottom of it. Maybe it isn’t indicative of who they are or it’s due to a previous mistake/misunderstanding. Having as much information about your prospective tenant as possible will only help you remain informed in your decision.