Tenant Screening eBook
As a landlord, you likely know that leasing to good-quality tenants is vital for keeping your sanity and your rental income while managing your units. Tenants who stop paying rent, damage the property, and disturb other tenants can easily lead to a lengthy and expensive eviction process.
You may have heard that tenant screening can help mitigate the presence of poor-quality tenants, but you might not know how the tenant screening process works. That’s why we’ve designed REI Grove’s Tenant Screening eBook to explain every facet of tenant screening and help you find only the best tenants to fill your units.
Before you begin reading, though, it’s helpful to have a basic understanding of what tenant screening is and what general steps you should take when looking for new tenants for your units. This article will look at some of the baseline information you need to know about tenant screening.
In this article
- Learn what tenant screening is and why it matters
- Understand the main steps in screening rental applicants
- Review rental applications, proof of income, credit checks, background checks, and eviction history
- Get REI Grove’s tenant screening eBook for landlords and property managers
- Learn how to screen applicants while staying mindful of fair housing rules
Key Takeaways
- Tenant screening helps landlords evaluate whether applicants meet their rental qualifications before move-in.
- Screening can help landlords find tenants who pay rent on time, take care of the property, and stay longer.
- Landlords should use consistent screening standards and follow federal, state, and local fair housing laws.
- REI Grove’s Tenant Screening eBook covers applications, proof of income, credit reports, background checks, and eviction history.
What is Tenant Screening?
Tenant screening is a process of checking whether a prospective tenant meets your standards and qualifications for living in your rental property. Investigating a potential tenant’s background allows you to understand their financial habits and behaviors as well as any patterns of lease violations in previous rental units. This sheds light on potential risks you may take by approving a tenant to live in your unit and gives you the opportunity to make informed decisions about tenants before they move in.
Tenant screening usually involves asking tenant screening questions and pulling formal records related to credit, criminal, and eviction history, which gives you foresight into how tenants may behave in your properties. Some tenant screening services compile this information into a concise report.
One important thing to note about tenant screening reports is that they are usually regulated by fair housing laws. In addition to the federal Fair Housing Act, which prohibits discrimination on the basis of seven protected classes—race, color, national origin, religion, sex, familial status, and disability—individual states often add their own protections that apply when screening tenants or contacting previous landlords to fill your rental properties. Before you begin or view a tenant screening report, be sure you're aware of these laws.
Why is Tenant Screening Important?
The benefits of tenant screening are endless, but there are several key reasons why it’s an important step in filling your units. For one, thorough screening can help you find long-term renters who will renew their leases, offering you a steady flow of income. This means less time spent advertising your units and reading through tenant applications, and more time spent focusing on other important landlord responsibilities.
Additionally, taking the time to screen tenants can result in less damage to your properties. By pinpointing risky applicants who exhibit red-flag behavior early on, you can minimize the replacement and repair costs of fixing damaged flooring, walls, and furniture on your property.
Finally, and most importantly, utilizing tenant screening helps you bring in tenants who will pay their rent on time and in full each month. Rent is the basis of your business — without it, you cannot properly manage your units. But if a tenant has a history of reliable rent payments in other rental units, they’re more likely to be trustworthy with rent payments while living on your property, too.
Tenant Screening eBook at a Glance
| eBook Section | What It Covers | Why It Matters |
|---|---|---|
| Section 1: Qualities of a Great Tenant | Affordability, job stability, housekeeping habits, legal risk, and tenant-landlord communication. | Helps landlords understand what they’re looking for before screening begins. |
| Section 2: Types of Screening | Rental applications, credit reports, and background checks. | Explains the main tools landlords use to evaluate applicants. |
| Section 3: Best Practices | Active screening, passive screening, social media, and minimum requirements. | Helps landlords create a consistent and fair screening process. |
| Section 4: Rental Applications | Personal information, residence history, employment history, proof of income, references, questions, and release signatures. | Shows what landlords should collect before running formal reports. |
| Section 5: Application Process | Passive screening, phone screening, in-person screening, application review, and validation. | Explains how screening starts before reports are ordered. |
| Section 6: Fair Housing Laws | Federal, state, and local fair housing requirements. | Helps landlords avoid discriminatory screening practices. |
| Section 7: Credit Reports | Credit bureaus, credit scores, report components, credit check process, and FCRA issues. | Helps landlords understand an applicant’s financial history. |
| Section 8: Background Checks | Criminal history, eviction history, sex offender searches, watchlists, and background check process. | Helps landlords identify potential risks while following applicable laws. |
| Section 9: Post-Screening | Analyzing results, proceeding with a decision, adverse action notices, and denial letters. | Helps landlords handle approvals and denials properly. |
What Does the Tenant Screening eBook Cover?
REI Grove’s Tenant Screening eBook gives landlords a deeper look at how to evaluate rental applicants from start to finish. It expands on the basics of tenant screening by walking through applications, credit reports, background checks, fair housing compliance, and post-screening decisions.
This eBook includes:
- Qualities of a great tenant
- Ability to afford rent
- Long-term job stability
- Aversion to crime, drugs, and illegal activities
Qualities of a Great Tenant
Before landlords screen applicants, they should have a general idea of the kind of tenant they want. Clear rental criteria can help landlords evaluate applicants consistently and avoid making emotional, inconsistent, or discriminatory decisions.
A great tenant is typically someone who can afford rent, has reliable income, takes care of the property, follows lease terms, communicates respectfully, and avoids behavior that creates safety, legal, or financial risk.
Tenant Screening Criteria Summary
| Screening Area | What to Review |
|---|---|
| Income | Whether the applicant can reasonably afford the monthly rent. |
| Employment | Whether the applicant has steady and reliable income. |
| Rental history | Whether prior landlords report responsible tenancy. |
| Credit history | How the applicant has managed debts and payments. |
| Eviction history | Whether the applicant has prior eviction records. |
| Background history | Whether any records create relevant safety or property concerns. |
| References | What prior landlords or employers say about reliability. |
| Fair housing | Whether every applicant is evaluated using the same lawful standards. |
An Overview of Tenant Screening Steps
So, what are the steps for screening potential tenants? There are three major components to tenant screening that you should be sure to look over and compare to your standards for qualified tenants, which we’ll further discuss below.
Step 1: Rental Application
The first step to bringing in new tenants is requiring a rental application form. This form is a simple way of learning vital information from prospective tenants to ensure they meet your standards before they move further into the rental process. Typically, a rental application will include contact information, current and prior residence information, landlord and employer references, employment history, written permission to run a credit check, and legal disclosures. If you think of any other relevant information that should be included based on your renter requirements, feel free to add it to your rental application form.
Some potential tenants won’t want to fill out a rental application, but if they’re unwilling to share this information with you, they may not be a good fit for your unit anyway. Still, you should aim to keep your rental applications simple and accessible to reach a wider pool of tenants, so it’s a good idea to offer digital applications that you can store and reference later along with the lease agreement.
What Should a Rental Application Include?
A rental application gives landlords a structured way to collect applicant information before ordering reports or making a decision. The application should ask for information that is relevant to screening and should avoid questions that violate fair housing rules.
A rental application includes:
- Full legal name
- Date of birth
- Current address
- Phone number
- Email address
- Current and prior residence information
Landlords should use the same application process for every applicant and should avoid asking questions related to protected characteristics.
Step 2: Proof of Income
Next, you’ll want to verify that a tenant is making enough money to afford the rent price for your unit. The easiest way to do this is to request that the tenant share proof of income documents with you. Common options for proof of income include pay stubs, bank statements, and W-2 forms, but many other diverse options are available such as an unemployment statement or letter from an employer.
Verifying a tenant’s income is important because it confirms that a tenant is earning reliable, consistent money from a job that is sufficient for the rent price you’ve set for your units. It’s standard for sufficient income to be three times the monthly rent amount. By ensuring a tenant can pay rent each month, you guarantee your own monthly income from your rental units.
Step 3: Background, Credit, and Eviction History Checks
Finally, you’ll want to run a series of checks for background, credit, and eviction history. Credit and background checks provide you with information on a tenant’s criminal background, their handling of money, and any prior evictions they’ve had in other properties so you can make well-informed decisions on whether a renter is suitable for your unit.
A criminal background check involves checking a tenant’s criminal records to protect you from approving a tenant who may be involved in violence and illegal activities.
A tenant screening credit check involves looking at a tenant's credit report to see how they manage their finances and whether they’ll be reliable in their payments to you. You can check a renter’s credit score, activity with credit cards and banks, and fraud indicators.
An eviction history checks a tenant’s background with evictions, like when, where, and why they occurred. You should always check with the tenant and with prior landlords to ask further questions about evictions.
Active and Passive Screening
Tenant screening is not limited to formal reports. The eBook also discusses active and passive screening.
Active screening is the process of evaluating applicants using predetermined requirements and formal tools, such as rental applications, credit reports, background checks, proof of income, and references.
Passive screening happens before an applicant formally applies. This includes the way landlords market the property, write listings, communicate pricing, explain rental criteria, and answer early questions. For example, clearly listing the rent price may discourage renters who cannot afford the property from applying.
Both approaches matter. Passive screening can improve the quality of the applicant pool, while active screening helps landlords evaluate each applicant against consistent standards.
Fair Housing and Tenant Screening
Fair housing laws are a major part of tenant screening. Landlords should understand the federal Fair Housing Act as well as any state or local protections that apply to their rental properties.
The federal Fair Housing Act protects applicants and tenants from discrimination based on:
- Race
- Color
- National origin
- Religion
- Sex
- Familial status
- Disability
State and local laws may add more protections, such as age, marital status, veteran status, sexual orientation, source of income, or other categories.
To reduce the risk of discrimination, landlords should use the same application, the same screening criteria, and the same decision-making process for every applicant. Screening standards should be documented before applications are reviewed.
Post-Screening Decisions
After screening is complete, landlords must decide whether to approve the applicant, deny the application, or request additional information. If a landlord denies an applicant or changes the terms because of information found in a consumer report, the landlord may need to send an adverse action notice.
A denial decision should be based on documented, consistent criteria rather than personal preference. For example, if a landlord has a minimum income requirement or a written policy on prior evictions, that standard should be applied consistently to every applicant.
Landlords should also be careful when evaluating criminal history. State and local laws may limit how criminal records can be considered in housing decisions, and landlords should review applicable law before denying an applicant based on background check results.
How Can This eBook Benefit Landlords?
This eBook gives landlords a more complete understanding of the tenant screening process. Instead of relying on instinct or inconsistent applicant review, landlords can learn how to build a process around applications, income verification, reports, references, fair housing compliance, and post-screening documentation.
This can be especially useful for:
- New landlords screening applicants for the first time
- Property managers creating a more consistent screening process
- Landlords trying to reduce late rent and eviction risk
- Rental owners updating outdated application practices
- Investors building a stronger leasing workflow
Conclusion
Tenant screening is a crucial responsibility for landlords and property managers and can greatly improve the quality of your renters. By filtering out risky applicants, you can breathe easier knowing that safe, reliable, and considerate tenants occupy your units.
The above three components are the main steps involved in screening, but note that many landlords reach out to current and previous landlords or employers to get a fuller rental history and employment verification.
For more insight on the specific steps and tools you should utilize when screening new tenants, download REI Grove’s Tenant Screening eBook at the top of this page.
FAQs
What is tenant screening?
Tenant screening is the process of reviewing a rental applicant’s background, income, rental history, credit, and other qualifications before approving them for a rental.
How do landlords screen tenants?
Landlords often screen tenants by collecting a rental application, verifying income, checking references, and running credit, background, and eviction reports.
What shows up on a tenant screening report?
A tenant screening report may include credit history, payment history, eviction records, criminal records, identity details, and other rental-related information, depending on the service used.
How long does tenant screening take?
Tenant screening can take a few minutes to several days, depending on the screening service, reference checks, income verification, and how quickly the applicant provides information.
Does tenant screening hurt your credit?
It depends on the type of credit inquiry. Some screening services use soft credit checks, while others may involve a hard inquiry.
What credit score do landlords look for?
There is no universal score. Many landlords set their own standards based on rent price, market conditions, applicant history, and written screening criteria.