Austin Property Management Blog

Factors to Consider When Screening Tenants

System - Wednesday, September 19, 2018

The number one choice that you as a landlord will make for your rental property is who you decide to let rent your place and become your tenant. No other decision you make for your property will affect it’s outcome as much as who you decide to rent to. Placing the right tenant in your property will help turn your property into a residual income machine, but placing the wrong tenants can tie your property up and cost your thousands of dollars. Avoiding scenarios such as unpaid rent, eviction fees, turn-over costs, and expensive property repairs should be key points for you when deciding on tenants, and can persuade you to hire a property manager.

When it comes to leasing your property and screening tenants some factors outweigh others. Below are important factors that should be considered first when screening potential tenants.

Rental History

People usually consider income or credit to be a more important factor in screening your tenants, but don’t discount a tenant and their rental past. A strong rental history shows that a tenant can be trusted by rental owners and shows that they can build a good rapport with paying rent on time. They might have the income your looking for and a credit score that meets your criteria, but if their rental history is full of evictions, late payments, behavioral issues, etc then you are better off finding a tenant you’d feel more confident with.  

Income and Employment

Unless otherwise stated, no income for your tenant means no rent money headed your way at the beginning of the month. Typically, landlords should look for tenant’s who make at least 3x the monthly rent for the home. However, verifying they have a strong employment history is also a key factor in screening your tenants. Maybe their income is high but they have a track record of short job durations and they’ve only been working at their current job for the last two months. While this potential tenant meets the criteria, you’re better suited to trust a tenant with a strong employment background that demonstrates the ability to stay somewhere for long periods of time. They are less likely to default on their lease due to non-payment or some other issue.

Credit Score

When looking over potential tenant’s credit history, understand that people can have low credit scores for a variety of reasons. Let’s say, for example, that the tenant’s you are screening have a low credit score due to a foreclosure on their past home. These tenants might have an excellent income and employment history and only made the mistake of purchasing a home out of their price range in the past. You wouldn’t necessarily hold this against these tenants as it doesn’t necessarily show as a massive red flag for a landlord. Instead, keep an eye out for large amounts of credit card debt or an extensive history of late payments – those are the red flags to look out for!

Criminal History

Just like the credit score scenario given above, criminal histories are not all the same and can have varying scenarios. Investigating further into any the nature of the crimes can help you better understand the tenant you are working with. For example, non-violent run-ins with the law may not have any relevance for your tenant to pay their rent on time. As the owner, its well within your right to not rent to a tenant with a criminal background, but if everything else checks out in their background you may consider giving this applicant a chance. Of course, automatic rejection should be given to those you don’t feel comfortable living in your property.

If you’re unsure on the process or feel you don’t have the resources to perform a property screen of a tenant, consider working with a property management company, if only just for the leasing of your property. Property managers have tools and systems in place to ensure your property finds quality tenants and you continue to earn rent every single month!


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