Landlords: How do you screen your tenants?
I get this question from newbies as well as experienced investors! The answer is don’t jump on the first tenants that answer your ad. It is better to wait for a tenant that meets your selection criteria than be sorry later.
Those criteria should be set ahead of time so you won’t be accused of profiling people. For example, tenants have to be in their current employment for at least one year. Or they need to make at least for times the monthly rent.
Then of course, you want to check rental history (call the prior landlords and ask whether they did not break the lease and paid the rent on time): any prior eviction should be a sign for you to run. Criminal history is another criteria, and you can have as strict a policy as you want on this: after all it is your property. However, you need to define that policy; and stick to it!
You will also want to check the credit report and look for payment history, collections and the reason behind them. Some landlords look for a minimum credit score, while other go by the type of events that have undermined the score.
At any rate, you cannot base your decision on any one criteria but make sure you complete all the checks mentionned above. Call the employer to make sure the prospectiive tenant is still employed. I read a story about a landlord that looked at a credit report that was decent, however, it did not have that much credit history or active credit lines on it. Had he not pulled a criminal background check he would have never known that the reason there was little credit history was because the prospective tenant had spent the past 2 years in jail for aggravated assault. So do your homework. Better safe than sorry!