TENANT SCREENING: Sifting For Quality
Published On: September 9, 2016 Posted by: Jeremy Peterson
Finding quality tenants is an important part of being a property manager. A landlord looks for tenants who can pay timely rent, be a good neighbor, and taking care of the property. Identifying tenants that show promise in doing these three things is one of the great challenges in the business.
To help identify these folks from the non-performers, we have created a questionnaire that helps us weed out undesirable tenants.
Here is a section of our rental application with an explanation of why we ask these questions:
Are you or anyone on this application a smoker/vaper?
Smoking damage is very expensive to repair. It embeds itself in porous surfaces like walls and carpet. Carpet replacement and stainblocking the walls is often required to undo smoke damage. In one apartment we inherited, a tenant had smoked inside the unit for 5 years. This one bedroom apartment cost us $7500 to repair. Rents are $450.
Another problem with smokers is that their health is typically poorer than their non-smoking counterparts. That health problem impacts their jobs and their incomes which can affect their ability to pay rent or be on time.
Vaping on the other hand is a major nuisance to everyone around. The health impacts of vaping are also significant but perhaps not as well known as smoking. Thus, we rent to non-smokers and non-vapers.
Do you have pets?
Pets have bladders. Bladders need to be emptied. If they are emptied on your carpets or walls, you have a very expensive repair on your hands. Urine cannot be shampooed out of carpets. It stays in the pad and festers. In worse cases, it is absorbed into subfloor material and effervesces until the floor is treated with bleach, pet enzyme, and then stain-blocked.
Have you ever been convicted or pleaded guilty to a misdemeanor involving drugs, violence, sexual misconduct, or honesty? Been convicted or pleaded guilty to a felony?
Tenants need to mind their business and be good neighbors. Sex crimes, drugs, and violence don’t meet that standard.
Been evicted or asked to move out? Broken a lease or rental agreement? Been Sued for nonpayment? Been Sued for damage to rental property?
If a tenant has ever left another landlord holding the bag on damages or unpaid rent, they are probably going to do the same to you as well. There are ways to work around this but that is a separate topic for another discussion.
Declared Bankruptcy? Had a recorded lien, garnishment, or judgment?
If a tenant has left other creditors unpaid, they might not pay you either. Again, this is a situation that can be worked around if other factors indicate they may be a good risk. But, the answer to this question helps us get a rough sense of financial responsibility.
Hopefully these questions help you get some insight into the screening process and the logic behind asking the questions. Of course, there are other economic factors to consider which we haven’t addressed here. Presently, our business is noticing that prospective tenant quality has declined significantly over the past year. This is largely due to higher qualified tenants becoming homeowners. The dearth of good applicants means that our vacant rentals are sitting on the market a little longer than usual and we spend a lot more time sifting. Nevertheless, as the economy turns downward sometime in the next year or so, we expect this trend to reverse and to see improvement in tenant quality.
