Choosing Your Next Tenant
How to Separate the Good Tenants from the Bad
You placed a “For Rent” sign on your property and posted ads on various rental web sites. Now interested prospects have started calling to set up a viewing. Are you ready to start the process of choosing your next tenant?
In the past, landlords met with prospective tenants and just trusted their instincts to pick the right one. Those days have definitely ended and with good reason. There has recently been a rash of application fraud that includes falsifying credit reports, pay stubs, Social Security cards and more. In addition, litigious people are ready to take you to court if you are not in compliance with the Fair Housing Act.
These days, not everyone is who they present themselves to be. An expensive car and jewelry do not automatically mean that an applicant will pay their rent on time—or at all. With this in mind, it is vitally important for a landlord or property manager to educate and prepare themselves for the kind of interview that will eliminate the bad tenants and help them choose the best one for their rental.
How to prepare for the interview
An extremely important part of dealing with applicants and tenants is to avoid any discrimination based on race, color, national origin, religion, sex, familial status, or disability. Even a hint of bigotry could land you in court. To avoid this scenario, be sure to familiarize yourself with the Fair Housing Act before your first interview. It is also essential that you understand the American Disabilities Act (ADA) and the laws governing applicants and tenants with service or emotional support animals.
The next step is to ask all interested parties to complete the AAOA Application to Rent. It is crucial to thoroughly review tenant applications in advance of the interview, gaining insights into their backgrounds, rental history, employment details and references. Following these steps, you can streamline the tenant selection process and ensure full compliance with legal requirements.
To be certain that you do not forget anything crucial to making your decision, make a thorough list of questions before the first interview, such as their employment and rental history and whether they have a Social Security Number or a credit history.
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The interview questions
Don’t be afraid to ask the applicant questions about their financial situation or household details. Always remember that you will be giving them keys to a property worth hundreds of thousands of dollars. You have a right to know exactly who you are renting to.
The following are some suggested questions to help you get a more complete picture of the applicant.
- How long have you been living at your current address?
- Why are you looking for a new place to live?
- When do you want to move in?
- How many people are in your household? Adults? Children?
- Do you have any pets? What kind and how many? Are any of them service or emotional support animals?
- Are you a smoker?
- Do you do drugs?
- Have you ever been convicted of a crime?
- Have you ever been evicted?
- Where do you work and how long have you worked there?
- What is your monthly income? Are you able to pay the rent on time each month?
- What is your Social Security Number? Do you have a credit history?
- Are you able to provide references from employers and previous landlords?
Assessing the Potential Tenant
After interviewing the candidates, it is time to decide whether you want to move on with them by ordering a tenant background check and a rental credit check.
Carefully review your interview with the applicants and their answers to your questions as well as any paperwork you received from them. Do they seem to be appropriate candidates to continue to the next step or do you believe some of them will not be good tenants?
Be particularly careful about the following information that can be gathered from the application and your interview:
- Unanswered information on the application and/or reluctance to answer your questions
- Frequent job and housing changes
- History of eviction
- Criminal history
- Refusal to sign documents
Rate each applicant objectively and fairly. If you feel that someone is not suitable, document your decision in case disputes arise in the future. Keep any correspondence you conduct with them in a locked filing cabinet along with their application.
Once you have narrowed down your applicants, it is time to order an AAOA credit report and background screening for your most qualified candidates.
Conducting a background screening with credit report
You will find that an AAOA credit and background screening report will add a great deal to what you learned from the application and your interview. Often, the person who is the most impressive during their interview is hiding an undesirable past filled with collections, evictions and a criminal history.
Combine the following reports with the tenant’s application and interview and you will have the information necessary for you to make an educated decision about whether you want to rent to them or not.
- Credit Report + Score
- Identity Verification
- Address History
- National Eviction
- NSF Check Verifier
- LeaseGuarantee Analyzer
- National Criminal
- Sex Offender
- Terrorist + Federal
- Income Estimator
- Social Security Number Fraud
- Civil Judgments
- Tax Liens
- Landlord Verification
- Employment Verification
The American Apartment Owners Association (AAOA) assists landlords, property managers, real estate owners and brokers across the country with managing their properties. AAOA offers a variety of services to assist with new applicants including a tenant background check or tenant screening and state-specific landlord forms such as a rental application or rental agreement. The association also offers resources from educational webinars and landlord tenant law to approved providers for insurance and financing. Contact us today to learn more.
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