One of the most important tasks you need to master as a landlord is screening tenants. As a landlord, you want to sign a lease agreement with someone who’ll pay their rent on time, take good care of your property, and not be a nuisance to your neighbours. Understanding how to screen tenants will help maximize your chances of finding such a tenant while avoiding ones who’ll cause you nothing but grief.
It’s much easier to screen out a tenant who isn’t a good fit than to evict someone once they’ve moved into your property. That’s why it’s prudent to invest the time to vet a tenant thoroughly before handing them the keys to your rental.
In this article, you’ll learn the most critical factors to assess when screening potential tenants. We’ve also created a handy checklist you can refer to each time you review a new applicant.
The importance of pre-screening tenants
Before diving headfirst into the official screening process, it’s worth gathering some basic details about the tenant to determine if they meet your fundamental requirements. That way, you can automatically rule out specific applicants and proceed to vet those with potential.
You can pre-screen candidates by speaking with them over the phone, through email, or text messaging. During the conversation, you can inform them what your screening process entails and explain what information they’ll need to provide on the rental application form. Naturally, some applicants may decline to move forward at this stage based on your qualification criteria and expectations.
Pre-screening candidates who’ve expressed interest in your rental also allows you to ask questions that can help you assess their suitability as tenants. Some examples are:
- When do you plan to move in?
- Why are you moving?
- Can you provide previous landlord and employment references?
- Do I have your permission to conduct a credit check?
- Are you comfortable with providing a security deposit for $X?
- Do you plan on living with roommates?
Check out the resources below for more tenant pre-screening questions and tips:
How to screen tenants in six steps
To learn how to screen tenants effectively, follow the six-step process below.
Disclaimer: SingleKey only provides information for landlords and property owners. We do not interpret it. The onus is on landlords and property owners to exercise the proper due diligence when reviewing available information and making an informed decision.
Step 1: Conduct a thorough background and criminal record check
Scrutinizing a tenant’s personal history will help avoid those likely to default on rent payments, engage in reckless behaviour, initiate conflict, and cause damage to your property. You can find a plethora of information online about a tenant by accessing various social media sites and public databases, including court documents. If you have prior written consent from your potential tenant, you may also want to obtain a police records check, especially if you have reasonable cause to be worried about the safety of other residents in shared spaces.
Pro tip: Many landlords overlook this step, but it’s essential. This critical process will dictate the course of the tenancy for years to come.
Step 2: Run a detailed credit check
Analyzing a renter’s credit score and credit report will allow you to determine how likely they are to pay rent on time. In Canada, credit scores range from 300 to 900—the higher the score, the better. Using a credit report, you can review an applicant’s credit history, which includes details about their payment habits, the type of debt they carry, the size of their monthly debt payments, and details on bankruptcies.
Pro tip: To ensure the information you receive is accurate, relevant, and up to date, always obtain a credit report personally from a trusted third party like SingleKey rather than the tenant. With today’s technology, a dishonest tenant can easily alter or forge a credit report.
Reading a credit report can be daunting, but we make the process a breeze with our comprehensive, easy-to-read Tenant Report. Click here to download a sample of SingleKey’s credit report to see what it has to offer.
Step 3: Verify income and employment
It’s vital to confirm that the tenant earns a steady income and has a stable job. Otherwise, they may struggle to make timely rent payments. Verify their income and employment by requesting a recent pay stub, and if needed, several months of bank statements. You can also assess their ability to handle rent payments by calculating their rent-to-income ratio. While there are no exact rules for an acceptable figure, a widely used rule of thumb is 30%.
Pro tip: Avoid contacting the employer using the contact details provided in the rental application. Instead, verify an employer’s contact details by searching online and using that information when reaching out.
Step 4: Review their rental history
Look into the tenant’s previous rental addresses to gain insight into their past tenancies. For example, do they switch rentals within a year or usually remain at one location for a prolonged period? A tendency to swap properties frequently and in haste is a potential red flag, as it could indicate the tenant may have been evicted at some point or violated their lease agreement. Be sure to verify that the period of past tenancies matches what’s on the rental application, as well as the identity of previous landlords.
Pro tip: Check with your local landlord association to see if a property owner has previously reported a tenant for a transgression. Accessing public court records can also help you discover any disputes filed by a landlord against the tenant.
Step 5: Confirm the references provided
References carry weight only if you can confirm they’re genuine, so you must contact each one the applicant provides. Reach out to their place of work and speak to someone who can verify their employment and impart details about a tenant’s behaviour and reliability. Exercise the same due diligence by contacting landlord references. By inquiring with a previous landlord, you can learn whether the applicant was a dependable, trustworthy, and respectful tenant.
Pro tip: Whenever possible, contact multiple landlords to assess a tenant’s character objectively. In some cases, the landlord may have broken the lease agreement with the tenant for an unlawful reason, damaging their reputation in the process.
Step 6: Interview the tenant
The final step is to invite the prospective tenant for an interview. Use the meeting as an opportunity to get answers to any lingering questions and address any remaining issues. You can keep the discussion informal and friendly, but pay careful attention to how the tenant responds to your questions, including their body language. Go with your gut feeling: if something doesn’t feel right, it could be a sign of a red flag you previously overlooked.
Pro tip: Become familiar with local tenant screening laws prohibiting landlords from asking tenants certain questions. Asking unnecessarily intrusive and discriminatory questions may result in legal trouble for you.
Download the tenant screening checklist
And that’s the entire tenant screening process! For a quick reference guide, be sure to download our tenant screening checklist, which covers each of these steps.
Common tenant screening myths
If you’ve only recently become a landlord, you may find the tenant screening process a bit overwhelming. And it doesn’t help that numerous myths about the process abound. Let’s debunk some of the most common tenant screening myths together:
Myth #1: You should always reject a tenant with a bad credit score.
Never refuse a tenant purely based on a poor credit score. Always take a holistic approach when vetting them so that you can see the bigger picture. For example, the tenant may have recently emerged from bankruptcy and has since recovered financially with a stable job—but you won’t know these details until you ask them.
Myth #2: You’re legally entitled to run a credit and criminal record check on a tenant.
As a landlord, you only have the opportunity to run these checks, not the right. You must obtain the tenant’s written permission to pull their credit report. Regarding criminal records, you can only request one if it’s necessary to protect your interests and only with the tenant’s written permission.
Myth #3: You can disqualify a tenant if they fail to provide their Social Insurance Number (SIN).
You cannot turn down a tenant because they decline to provide you with a SIN on the rental application. Demanding a SIN constitutes a breach of privacy, so specify that providing it is optional.
Myth #4: A tenant who can pay rent on time is all that matters.
While financial stability is a definite asset in a tenant, there are other criteria you need to consider before offering them a lease agreement. The ideal tenant should keep your property tidied, do their part regarding seasonal maintenance, and respect their neighbours’ privacy.
Myth #5: Verifying one reference is enough.
It’s never wise to rely on the words of one employer or landlord when assessing a tenant’s personality, habits, and behavioural traits. Always contact multiple sources to get around potential bias from a reference, whether positive or negative.
Our final thoughts
Screening a tenant is not the most exciting part of being a landlord, but it’s the most vital. Choosing the right tenant will reward you with steady rent payments, a well-cared-for property, and a positive landlord-tenant relationship.
Tenant screening can be daunting, but only if you lack a well-defined process with precise goals. First, pre-screen applicants by asking basic questions about their rental needs and preferences. Then, narrow your pool to those who have potential and follow our tenant screening checklist.
Ensure you obtain sensitive documents, like credit reports, from a trusted and reliable third party like SingleKey to eliminate the risk of receiving a fraudulent copy. Our Tenant Report includes a comprehensive credit report, public document scan, criminal record check, and social media review, all in one easy-to-read document. Once you sign up, you can download your report in just five minutes.