How to Screen Tenants: A Complete Landlord's Guide

The Foundation of Successful Landlording: Finding good tenants is the single most important factor in rental property success. A thorough screening process protects your investment, reduces turnover, and saves you thousands in potential damages and lost rent.

Why Tenant Screening Matters

The difference between a profitable rental and a nightmare property often comes down to one decision: who you choose as your tenant. Consider the costs of a bad tenant:

The True Cost of a Bad Tenant:

Lost Rent: 3-6 months of unpaid rent during eviction process ($6,000-$12,000 on a $2K/month property)
Legal Fees: $2,000-$5,000 for eviction attorneys and court costs
Property Damage: $3,000-$10,000+ in repairs beyond security deposit
Vacancy Costs: Lost rent during turnover and re-leasing ($2,000-$4,000)
Time & Stress: Months of dealing with problems, court appearances, and cleanup

Total Potential Loss: $15,000-$35,000+ per bad tenant

The Value of Good Screening:

Spending 2-3 hours on thorough tenant screening can save you tens of thousands of dollars and countless headaches. Good tenants pay on time, care for the property, and renew leases - making your job as a landlord easy and profitable.

A $50 background check and a few hours of verification is the best investment you'll make as a landlord.

The Complete Tenant Screening Process

Pre-Screen with Clear Rental Criteria

Before showing the property, establish and advertise your requirements

Minimum Qualifications to Advertise:

Income Requirement: Gross monthly income 3x the rent (some use 2.5-3x)
Credit Score: Minimum 600-650 (adjust based on your market)
Rental History: No evictions in the past 7 years
Employment: Current employment or verifiable income source
Criminal Background: No violent crimes or drug-related felonies

Legal Tip: Apply the same criteria to all applicants consistently. Different standards for different applicants can violate Fair Housing laws.

Rental Application

Collect detailed information before running paid background checks

Essential Application Information:

Personal Information:

• Full legal name
• Date of birth
• Social Security number
• Driver's license number
• Phone and email

Current Housing:

• Current address
• Landlord contact info
• Monthly rent amount
• Move-in and move-out dates
• Reason for leaving

Employment & Income:

• Employer name and address
• Supervisor contact info
• Job title and length of employment
• Gross monthly income
• Other income sources

Additional Information:

• Vehicles (make, model, license)
• Pets (type, size, breed)
• Emergency contact
• Personal references
• Previous rental history (2-3 years)

Pro Tip: Charge a non-refundable application fee ($30-$50) to cover screening costs. This also filters out unserious applicants who aren't willing to invest in the process.

Credit & Background Check

Use professional screening services for accurate, legal reports

What to Look For:

Credit Report Analysis:

•Credit Score: 650+ is good, 600-650 is borderline, below 600 needs strong compensating factors
•Payment History: Look for consistent on-time payments on credit cards, auto loans, student loans
•Collections: Medical debt is less concerning than unpaid rent or utilities
•Debt-to-Income: Total monthly debts shouldn't exceed 40-45% of income
🚩Red Flags: Recent evictions, unpaid rent, utility collections, or bankruptcies

Criminal Background Check:

•Focus on: Violent crimes, property crimes, drug manufacturing/distribution, sex offenses
•Consider: How recent was the offense? What was the severity? Has the person been rehabilitated?
•Legal Note: Cannot automatically reject based on arrests (only convictions). Check local laws.

Recommended Services:

• TransUnion SmartMove - $25-40 per applicant
• RentPrep - $21-40 per applicant
• MyRental - $30+ per applicant
• Buildium (property management software with built-in screening)

Income Verification

Confirm the applicant can actually afford your rent

Required Documentation:

W-2 Employees:
Last 2-3 pay stubs AND offer letter or employment verification call
Self-Employed:
Last 2 years of tax returns (1040s with Schedule C) + recent bank statements
Retirement/Social Security:
Award letter from SSA or pension statements showing monthly amount
Other Income:
Child support orders, alimony agreements, investment statements with history

Verification Call Script:

"Hi, this is [Name] from [Your Company]. I'm calling to verify employment for [Applicant Name] who has applied to rent one of our properties. Can you confirm:"

• Current employment status and start date?
• Job title and full-time/part-time status?
• Approximate annual salary or hourly wage?
• Any planned layoffs or employment changes?

Landlord References

The most valuable part of tenant screening

Why This Step Is Critical:

Past behavior is the best predictor of future behavior. A previous landlord has no incentive to lie (unlike friends or family references) and can tell you exactly what kind of tenant this person will be.

Questions to Ask Previous Landlords:

1. "Did [Applicant] pay rent on time every month?"

If they hesitate or say "mostly," that's a red flag.

2. "Did they give proper notice before moving out?"

Shows respect for lease terms and proper procedures.

3. "How did they maintain the property?"

Listen for "clean," "took good care of it," or concerning hesitation.

4. "Were there any noise complaints or issues with neighbors?"

Important for multi-family or close-proximity properties.

5. "How much was their security deposit, and did they get it back?"

If they lost the deposit, ask why. Damage? Unpaid rent?

6. "Would you rent to them again?"

The most important question. A "yes" or immediate hesitation tells you everything.

Warning: Call the landlord BEFORE the current one.

Current landlords might give glowing reviews to problem tenants just to get rid of them. The previous landlord has no motivation to lie.

Red Flags to Watch For

Immediate Disqualifiers

Lying on the application (different info when verified)
Recent evictions (within 3-7 years)
Income less than 2.5x rent with no compensating factors
Multiple unpaid rent collections on credit report
Violent criminal history or property crimes
Cannot verify employment or income sources
Previous landlord says they wouldn't rent to them again

Warning Signs (Proceed with Caution)

Rushing you to make a decision ("I need to move in tomorrow")
Offering to pay several months upfront (could be avoiding credit check)
Cannot provide landlord references ("I've always lived with family")
Frequent job changes (every 3-6 months)
Multiple recent moves (red flag for serial evaders)
Credit score below 600 with no explanation
Evasive or defensive when asked screening questions

Fair Housing Laws: What You MUST Know

Protected Classes (Federal Level)

You cannot discriminate or apply different standards based on:

Race or color
National origin
Religion
Sex (including gender identity and sexual orientation)

Familial status (children under 18)
Disability (physical or mental)
Source of income (in some states)

What You CANNOT Do:

❌ Apply different screening criteria to different applicants
❌ Ask about plans to have children or family status
❌ Refuse service animals (different from pets)
❌ Discriminate based on criminal history without individualized assessment (some jurisdictions)
❌ Ask about disabilities or require disclosure
❌ Refuse Section 8 or housing vouchers (illegal in many states)

What You CAN Do:

✅ Apply consistent financial criteria (income, credit, rental history)
✅ Verify employment and income for all applicants
✅ Check criminal background (but apply standards consistently)
✅ Require all occupants to be on the lease
✅ Set reasonable occupancy limits (typically 2 per bedroom + 1)
✅ Reject based on insufficient income, poor credit, or bad rental history
✅ Require pet deposits for pets (not service/support animals)

Making the Final Decision

Decision Framework:

✅ APPROVE if:

• Meets all minimum qualifications
• Positive landlord references
• Verified stable income 3x+ rent
• Clean criminal background or acceptable explanation
• Good credit (650+) OR acceptable credit (600-650) with strong compensating factors

⚠️ CONDITIONAL APPROVAL if:

• Borderline credit (600-650) but strong income and references
• Limited rental history but excellent employment and income
• Consider: Higher security deposit, co-signer, or additional month's rent upfront

❌ DENY if:

• Fails to meet minimum income requirements
• Recent evictions or collections for unpaid rent
• Cannot verify employment or income
• Negative landlord references
• Lied on application
• Disqualifying criminal history per your consistent policy

Denial Letter Requirements:

If you deny an application, you MUST provide an adverse action letter within 7-10 days explaining:

The specific reason(s) for denial (insufficient income, negative reference, etc.)
The source of information (credit bureau, landlord reference, etc.)
Their right to dispute inaccurate information
Contact information for the screening company or credit bureau used

Time-Saving Tips for Efficient Screening

Use Technology:

• Online applications (Zillow, Apartments.com, TurboTenant)
• Automated background check services
• Digital lease signing (DocuSign, HelloSign)
• Property management software (Buildium, AppFolio)

Pre-Screen Before Showings:

• Ask about income and credit score on initial call
• Screen out unqualified applicants before wasting time
• Send property details and requirements via email first
• Schedule group showings to save time

Standardize Your Process:

• Use the same application for everyone
• Create scripts for landlord reference calls
• Keep checklist of required documents
• Document everything for legal protection

First-Come, First-Qualified:

• Screen in order applications are received
• Stop accepting applications once one is approved
• Avoid "shopping" between qualified applicants
• Protects you from discrimination claims

Common Mistakes to Avoid

❌ Skipping Steps to Fill Vacancy Quickly

One month of lost rent is better than six months of problems with a bad tenant. Never rush screening.

❌ Trusting Your "Gut Feeling"

Charm and good first impressions don't pay rent. Stick to objective criteria and verification.

❌ Not Calling Previous Landlords

This is the single most valuable step. A 5-minute call can save you thousands in headaches.

❌ Accepting "Cash Only" Tenants

Tenants who insist on cash often can't pass normal screening or have IRS issues. Require traceable payments.

❌ Making Exceptions for "Special Circumstances"

Every bad tenant has a sob story. Apply your criteria consistently or you'll regret it.

The Bottom Line

Tenant screening isn't about being harsh or judgmental - it's about protecting your investment and ensuring a positive rental experience for everyone involved. Good tenants appreciate living with a landlord who takes screening seriously, because it means their neighbors are also quality tenants.

Invest the time upfront to screen thoroughly, apply your criteria consistently, and you'll build a portfolio of reliable tenants who pay on time, respect the property, and make landlording profitable and enjoyable.