Tenant screening is your most important task as a landlord. One bad tenant can cost you $10,000+ in lost rent, property damage, and legal fees. One good tenant can pay on time for years with zero drama. The difference? A thorough screening process. This guide shows you exactly how to screen applicants like a professional.
Why Screening Matters
Bad tenants cost landlords approximately: 3-6 months lost rent during eviction, $2,000-5,000 in property damage, $1,000-3,000 in legal and court fees, $1,000-2,000 in turnover and cleaning, stress and time you can't quantify. Total: $7,000-16,000+ for one bad tenant.
Meanwhile, a thorough screening process costs: $30-50 for background check, 2-3 hours of your time, maybe one or two days extra vacancy finding the right tenant. Total: approximately $300-500 in cost and effort. The ROI on good screening is massive.
The Complete Screening Process
Step 1: Pre-Screening Over the Phone
Before showing the property, ask qualifying questions: desired move-in date, current employment status, monthly income (must be 2.5-3x rent), reason for moving, pets, number of occupants, any evictions or criminal history, credit score range. This eliminates 50-70% of unqualified applicants before you waste time showing the property.
Step 2: Property Showing
During the showing, observe: how do they treat the property during tour, do they arrive on time, are they respectful, what questions do they ask (practical vs. red flags), professional demeanor. Trust your instincts but verify with documentation.
Step 3: Rental Application
Required information: Full legal name and date of birth, current address and 2 years rental history, employment history (2 years), income verification, references (previous landlords, employer), emergency contact, Social Security number (for credit check), authorization to run background check.
Application fee: Charge $30-50 to cover screening costs. This also filters out non-serious applicants.
Step 4: Income Verification
Standard rule: Monthly gross income should be 2.5-3x monthly rent. For $1,500 rent, tenant needs $3,750-4,500 monthly income. Documentation to request: 2 recent pay stubs, W-2 from last year, call employer to verify employment and salary (with applicant's written permission), bank statements (2-3 months) for self-employed. Red flags: income barely meets minimum, job hopping (3+ jobs in 2 years), can't/won't provide verification, self-employed with no tax returns.
Step 5: Credit Check
What to look for: Credit score: 650+ is ideal, 620-650 acceptable with strong compensating factors. Payment history: late payments on credit cards/loans, collections or charge-offs, high credit utilization (over 30%), recent credit inquiries (sign of financial stress). Understand context: Medical debt is often unavoidable - less concerning. Student loans: normal and managed are OK. Old issues: 7+ year old problems matter less than recent ones.
Step 6: Criminal Background Check
What you can consider: Violent crimes, sex offenses (especially near schools), drug manufacturing or distribution, theft or property crimes, fraud. What requires careful review: Minor offenses from 7+ years ago, non-violent misdemeanors, charges that were dismissed, evidence of rehabilitation. Fair Housing compliance: You CANNOT have blanket bans on all criminal history - HUD requires individualized assessment. Consider: nature and severity of offense, time passed, evidence of rehabilitation, relevance to tenancy (violence, property damage vs. unrelated crimes).
Step 7: Eviction History
Check court records: Past evictions, unlawful detainer actions, judgments for unpaid rent, frequent moves (red flag - possible eviction avoidance). Major red flag: Eviction in last 3 years, especially for non-payment. Multiple evictions = hard pass.
Step 8: Previous Landlord References
Contact previous landlords (not current - they might lie to get rid of bad tenant): Did tenant pay rent on time? Any late payments? Property condition when they moved out? Would you rent to them again? Reason for leaving? Any complaints from neighbors? Ever receive eviction notice? Red flags: Landlord hesitant or refuses to give positive reference, can't remember tenant (suspicious), vague answers, tenant provides friend's number instead of landlord.
Step 9: Employment Verification
Call employer's HR department (with applicant's written authorization): Confirm employment and title, verify salary, confirm start date and employment status, ask if any knowledge of upcoming termination or layoff. For self-employed: Request 2 years tax returns, bank statements showing consistent income, business license or registration, CPA letter if available.
Step 10: Personal References
Least valuable (people only list friends who'll say nice things), but worth a quick call. Ask: How long have you known applicant? Can you vouch for their character? Have they ever borrowed money and not paid back? Would you be comfortable renting to them if you owned property?
Setting Your Minimum Qualifications
Establish clear, written standards applied equally to all applicants: Income: 3x monthly rent minimum, Credit score: 650+ preferred, 620+ acceptable, Rental history: No evictions in last 3 years, positive landlord references, Criminal history: Individualized assessment for relevant crimes, Employment: Stable employment for 12+ months, or sufficient savings if between jobs. Document these criteria and apply consistently - Fair Housing requires equal treatment.
Red Flags to Watch For
- Income red flags: Won't provide documentation, income barely meets minimum, multiple jobs to reach minimum income, relies on family money or "trust fund"
- Rental history red flags: Can't provide previous landlord contact, only lived with friends/family (no rental history), frequent moves (every 6-12 months), vague about reason for moving
- Behavior red flags: Pushy or aggressive during application, offers to pay extra to skip screening, shows up drunk/high to viewing, brings different story each time you talk, asks about skipping lease or going month-to-month immediately
- Application red flags: Incomplete application, inconsistent information, asks you to "rush" the process, wants to move in immediately (today/tomorrow)
Fair Housing Compliance
You CANNOT discriminate based on: Race, color, national origin, religion, sex (including sexual orientation and gender identity), familial status (children or pregnancy), disability. What this means: Same screening criteria for everyone, no different standards for protected classes, no "steering" applicants to certain units, no asking about family plans or pregnancy, must allow reasonable accommodations for disabilities. Document everything: If you deny someone, write down objective reasons (income too low, credit score below standard, eviction history). Never write "they seemed sketchy" or subjective observations.
Multiple Qualified Applicants
If you have 3 qualified applicants, how do you choose? Objective tiebreakers: Application timestamp (first qualified applicant wins), highest credit score, highest income relative to rent, longest job tenure, strongest landlord references. Document your decision: Write down why you chose Applicant A over Applicant B using objective criteria. This protects you from discrimination claims.
Conditional Approval
Sometimes an applicant almost qualifies but needs help: borderline credit score → require larger security deposit (if legal in your state), income slightly below threshold → require co-signer with verified income, limited rental history → require additional reference or higher deposit, recent bankruptcy → require proof of reestablished credit. Be consistent - if you offer conditional approval to one applicant, offer similar terms to others in the same situation.
The Co-Signer Option
When to require a co-signer: Recent graduate with good credit but limited income, stable job but income slightly below 3x threshold, strong character references but thin credit file. Co-signer requirements: Must also apply and pass screening, income should be 5x+ monthly rent (covering themselves and tenant), strong credit score (700+), legally obligated to pay rent if tenant doesn't, must sign lease or separate co-signer agreement.
Denying an Application
If you deny someone, you MUST: provide written notice of denial (required by law), list specific reasons (failed credit check, insufficient income, past eviction), include information about credit report if that was a factor, provide copy of credit report if requested (within 60 days), avoid vague or discriminatory language. Sample denial reasons (objective and legal): "Gross monthly income of $2,800 does not meet our requirement of 3x monthly rent ($1,600 × 3 = $4,800)", "Credit score of 580 does not meet our minimum requirement of 620", "Eviction for non-payment of rent within the past 3 years".
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Get Resources →The Bottom Line
Tenant screening is not optional - it's your strongest protection against financial loss. Spend $50 and 3 hours screening to avoid $10,000 problems. Use consistent, documented criteria for all applicants. Verify everything - trust but verify. When in doubt, say no and keep looking. A few extra days of vacancy is better than months of nightmare tenant problems. The best screening investment you'll ever make is taking your time to find a great tenant rather than settling for the first applicant because you're anxious about vacancy.