Finding great tenants feels amazing, doesn’t it? But getting there means dodging common tenant screening mistakes. If you’re a landlord or property manager in the real estate sector, you know a bad tenant can turn into a nightmare, affecting your cash flow and peace of mind. That’s why sidestepping those tenant screening mistakes is so critical to your investment and your experience managing rental housing.
You put a lot of work into your properties. You want a paying tenant who will consistently pay rent on time and treat your property with respect. Poor screening tenant practices can lead to late rental payment, property damage, or even costly evictions and high tenant turnover.
It’s a headache you just don’t need. We’re here to help you spot these pitfalls before they become big problems that impact your ability for smooth rent collection. Let’s talk about how to screen smarter and find a great tenant who might stay longer.
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Common Tenant Screening Mistakes To Sidestep
So many landlords and property managers fall into these traps, especially when handling numerous rental application forms. It’s easy to do if you’re busy or new to property management. But understanding these blunders is the first step to refining your tenant screening process.
You can then create a solid screening approach that includes a thorough tenant background check. This protects your property, helps in selecting a responsible tenant, and preserves your sanity. A well-defined process for prospective tenants can make all the difference.
Mistake 1: Rushing the Process
Feeling pressure to fill a vacancy quickly to maintain consistent monthly rent income? We get it, as an empty unit means lost revenue and can disrupt your financial projections. But rushing the tenant screening process is a huge gamble, often driven by the desire to avoid any gaps in cash flow.
This haste frequently leads to overlooking red flags on a rental application or during the background screening. You might skip a crucial step like verifying an income source or not dig deep enough into an applicant’s rental payment history. This urgency can land you with a tenant who causes problems down the road, potentially leading to a difficult eviction history for your property.
Take your time with each prospective tenant. A few extra days of vacancy while conducting a thorough tenant background check is far better than months of tenant issues or trying to recover a security deposit for damages. Patience really pays off here, making sure every applicant undergoes your complete tenant background screening before any lease agreement is signed.
Mistake 2: Not Having Clear Rental Criteria
What makes an ideal tenant for your specific rental housing unit? If you can’t answer this clearly, you’re making a significant tenant screening mistake. Without defined rental criteria, how do you objectively compare applicants and their tenant background?
This can lead to inconsistent decisions, and worse, it can open you up to fair housing complaints or discrimination claims. Your criteria should be written down and consistently applied to every prospective tenant. They should be directly related to the applicant’s ability to pay rent and care for the property, such as income requirements (like three times the monthly rent), a minimum credit score, or a clean rental payment history.
Other criteria might include a verifiable income source, an acceptable eviction history, and adherence to your pet policy. Share these criteria, including any application fee information, with all prospective tenants upfront. This transparency helps filter out unsuitable applicants early, saves time, and makes your decisions defendable, showing you’re a professional property manager.
Mistake 3: Skipping or Skimping on the Credit Check
A credit report tells a detailed story about how a prospective tenant manages their financial obligations. Skipping this credit check, a vital part of the tenant screening process, is like flying blind. You might think someone seems financially stable based on their appearance or a brief conversation, but their credit report could reveal a history of missed payments or substantial debts.
Some landlords only glance at the credit score, but that’s not enough information for a sound decision. You need to look at the full credit report obtained through reliable screening services. Are there collections accounts, particularly from previous landlords or utility companies? What about bankruptcies, judgments, or a pattern of late payments on credit card accounts?
These details from the check report paint a fuller picture of their financial responsibility. Understanding their debt-to-income ratio from the information on their credit reports is also valuable. A thorough credit check helps gauge an applicant’s ability to consistently pay rent and is a key part of avoiding tenant screening mistakes that could lead to issues with rent collection.
Mistake 4: Ignoring Criminal Background Checks (Or Doing Them Wrong)
Tenant safety and property security are very important aspects of property management. A criminal background check, often part of comprehensive background checks, can reveal relevant criminal history. However, this step is often mishandled or skipped by landlords, sometimes due to concerns about complexity or cost.
Some landlords skip it altogether, while others don’t understand what to look for or how to use the information legally. It’s not just about seeing if a criminal background record exists; the nature, recency, and relevance of any offense to the safety of the rental housing and other tenants matter. A decades-old minor offense might not be as concerning as recent, serious, or repeat offenses found in court records.
You must also follow Fair Housing Act guidelines and any applicable state or local laws, as some areas restrict how you can use criminal history in housing decisions. The U.S. Department of Housing and Urban Development (HUD) provides guidance, cautioning against blanket bans based on any criminal record as potentially discriminatory. You need a policy for screening tenant applicants that considers individual circumstances and the relevance of any criminal background to tenancy.
Mistake 5: Forgetting to Verify Income and Employment
An applicant states on their rental application that they earn a certain amount. Do you just take their word for it? Verifying income and employment status is essential in the tenant screening process to confirm they can actually afford the monthly rent for your rental housing.
Unverified income is a big red flag and a common tenant screening mistake. Always ask for recent pay stubs or other proof of income source. Call their employer to confirm employment status, tenure, and stated income; this is a critical part of income verification.
Be wary of fake pay stubs; they’re more common than you might think. If an applicant is self-employed or has a non-traditional income source, ask for bank statements or tax returns to show consistent cash flow. Cross-referencing this information helps paint an accurate financial picture, making sure your tenant isn’t overstretched and reducing the risk of missed rental payment issues, which ultimately protects your investment and ensures a steady paying tenant.
Mistake 6: Not Checking References Thoroughly
References, especially from past landlords, can offer great insights into a prospective tenant’s behavior and rental payment history. However, many landlords just make a quick call or accept a written letter without much scrutiny. This isn’t enough to get a true sense of the tenant background.
You need to dig a little deeper when conducting this part of the tenant background check. Ask specific questions when you call: Did the tenant pay rent on time? Did they maintain the property reasonably? Were there any complaints from neighbors or issues with the lease agreement terms? Why did they leave, and did they give proper notice? Would the previous landlord rent to them again?
Be cautious of references from friends or family, as they are likely to be biased. Prioritize speaking directly with previous landlords who have no personal connection to the applicant. Also, try to verify that the person you’re speaking to actually is the previous property manager or landlord, as some applicants might provide a friend’s number. A little due diligence here, perhaps even asking for a copy of their old lease agreement as cross-reference, can save you from a bad tenant and future headaches.
Mistake 7: Failing to Interview Prospective Tenants
A rental application form provides you with facts and figures about a prospective tenant. However, an interview, whether in person or virtual, helps you get a feel for the person beyond the paperwork. It’s a chance to clarify any information on their application, ask follow-up questions about their tenant background, and assess their overall demeanor.
You can also gauge their seriousness about the rental housing and their professionalism. This doesn’t have to be a formal interrogation; a friendly conversation can be very revealing. Do they communicate clearly and respectfully? Do their answers align with the information provided on their rental application and during the initial tenant screening process?
This meeting complements your other screening steps, like the credit check and background check. It adds a human element to the data, helping you make a more well-rounded decision. Remember to keep your questions consistent for all applicants, related to their ability to meet tenancy requirements, and strictly avoid anything that could be perceived as discriminatory under fair housing laws.
Mistake 8: Violating Fair Housing Laws (This is a BIG one)
This is perhaps the most serious of all tenant screening mistakes, with potentially severe legal and financial repercussions. Discrimination, even if unintentional, can lead to costly lawsuits and damage your reputation as a property manager or landlord. The Fair Housing Act prohibits discrimination based on race, color, national origin, religion, sex (including gender identity and sexual orientation), familial status, and disability.
Many states and cities have additional protected classes, so it’s important to be aware of local regulations affecting your rental housing. You must treat all prospective tenants equally and apply your screening criteria consistently to everyone who submits a rental application. Avoid making any comments or asking questions related to protected characteristics, such as inquiring if they have children or intend to, or about their religion or national origin.
Your decisions for approving or denying a tenant must be based solely on their ability to meet the legitimate tenancy requirements outlined in your criteria. A tenant paying on time and respecting the property are valid concerns; their protected class status is not.
Here’s a quick look at federal protected classes:
| Protected Class | Explanation |
|---|---|
| Race | A person’s race. |
| Color | A person’s skin color. |
| National Origin | Country where a person or their ancestors were born. |
| Religion | A person’s religious beliefs or practices. |
| Sex | Gender, gender identity, sexual orientation. |
| Familial Status | Families with children under 18, pregnant women. |
| Disability | Physical or mental impairment that substantially limits one or more major life activities. |
Educate yourself thoroughly on these laws; HUD’s website offers detailed information on fair housing. Keep detailed records of your entire tenant screening process for each applicant, including their rental application, any screening report, and the reasons for your decision. This documentation can demonstrate your compliance if a question ever arises about your practices when dealing with prospective tenants or if an applicant is disputing errors they believe occurred in their screening.
Mistake 9: Inconsistent Screening Practices
Do you screen your first applicant for a vacant unit differently than your tenth? Or perhaps you find yourself being stricter with some prospective tenants than others, based on initial impressions? Inconsistent screening practices are a recipe for trouble and a serious tenant screening mistake.
It’s not fair to applicants and significantly increases your risk of discrimination claims under fair housing regulations. Establish a standard tenant screening process and apply it uniformly to every single rental application you receive for your rental housing. This means using the same rental criteria, asking the same core questions during interviews, and requiring the same documentation from everyone, such as proof of income source or identification like a social security card for identity verification (though handle the social security number with care).
This uniformity in your tenant background check approach is your best defense against accusations of bias. Consistency doesn’t mean you can’t make a judgment call based on the compiled information from the credit report and background check report, but the process of gathering that information must be identical for all. Document each step of your tenant background screening to prove your consistency and adherence to fair housing principles.
Mistake 10: Making Decisions Based on Gut Feelings
We all have gut feelings, and sometimes they seem right. However, relying on intuition alone when choosing tenants is a dangerous path in property management and can lead to significant tenant screening mistakes. Gut feelings can be influenced by unconscious biases, which might lead to discriminatory choices without you even realizing it, thereby violating fair housing laws.
Your decisions regarding prospective tenants should be based on objective, verifiable facts. These facts come from your defined rental criteria, verified information on the rental application, the credit report, the criminal background check, eviction history, and references from previous landlords. This data is often compiled into a comprehensive tenant background check report or screening report.
If an applicant meets your pre-set criteria related to their ability to pay rent and care for the property, they should be considered a viable candidate. If they don’t, you have a legitimate, non-discriminatory reason for denial, which should be documented (and an adverse action notice provided if based on consumer reporting information). Sticking to your established criteria makes your decision-making process for screening tenant applicants logical, defensible, and far more reliable than a subjective feeling, helping you find a great tenant rather than a bad tenant.
Mistake 11: Not Documenting Everything Carefully
The saying, “If it wasn’t written down, it didn’t happen,” is especially true in property management and the real estate business. Poor documentation, or a lack thereof, is a common and costly tenant screening mistake. You need a clear paper trail for every prospective tenant who submits a rental application, regardless of whether they are approved or denied.
This documentation includes their completed rental application (and any application fee collected), all components of the tenant background check (such as the credit report, criminal background check, and eviction records check), notes from interviews, reference checks, and records of all communications. Crucially, document your decision-making process, noting specifically why you approved or denied an applicant, linking these reasons directly back to your objective rental criteria. If you deny an applicant based on information from a consumer reporting agency, you must provide an adverse action notice, and keep a copy.
Good records are vital if you ever face a legal challenge, a fair housing complaint, or if a tenant is disputing errors in their screening report. They demonstrate that you had legitimate, non-discriminatory reasons for your decision and that you follow a consistent tenant screening process. Organize these records systematically, keep them secure (especially sensitive information like social security numbers), and accessible for the legally required period. Proper documentation protects you and shows you operate professionally and fairly, which is key to successful property management and maintaining good cash flow.
Mistake 12: Using Outdated or Unreliable Screening Services
The quality of your tenant screening reports matters immensely when selecting a tenant. Using cheap, outdated, or unreliable tenant screening companies or screening services can provide you with inaccurate or incomplete information from their background check reports. This significant tenant screening mistake could lead you to approve a risky, bad tenant who may have a poor rental payment history or damage your property, or it could cause you to unfairly deny a good, prospective tenant based on flawed data.
Choose reputable tenant screening companies that provide comprehensive background checks and check reports. These reports should include a thorough credit check, a national criminal background check (using reliable court records), and a search of eviction records. Confirm that their data sources for the tenant background check report are current, accurate, and that the screening companies comply with the Fair Credit Reporting Act (FCRA), which governs how consumer reporting agencies collect and use information. The Federal Trade Commission offers useful resources for landlords on FCRA compliance and handling consumer reporting information, including how to issue an adverse action notice.
Investing in quality screening services from professional background check companies is money well spent. It provides reliable information from tenant background checks, allowing you to make informed decisions based on solid payment history and other factors. This helps you avoid many other tenant screening mistakes, reduce tenant turnover, protect your monthly rent income, and find a paying tenant who is more likely to stay longer and respect the lease agreement. Some landlords even perform a landlord background check on themselves through these services to understand what information is being pulled.
Wrapping Up: How to avoid common tenant screening mistakes
Whew, that was a lot to cover regarding common tenant screening mistakes. But honestly, avoiding these pitfalls in your tenant screening process is so important for your success as a landlord or property manager. It’s about protecting your investment in rental housing, maintaining positive cash flow, and ensuring timely rent collection.
It’s also about creating a safe community for all your tenants and, ultimately, about your own peace of mind. A thorough, fair, and consistent screening process for every rental application—from verifying income source and checking eviction history to understanding credit reports—makes all the difference in securing a great tenant and avoiding a bad tenant.
Avoid common tenant screening errors and use professional screening services to improve your process. Smooth sailing in property management starts with great tenants. Renters who honor their lease agreements and pay promptly are a landlord’s dream. It also means less hassle with things like security deposits and high tenant turnover. Diligent screening tenant practices are fundamental to successful real estate investment.
Maximize your leasing team’s efficiency with RentSafe, the simplest and most powerful tenant screening platform available. After growing our own property management company to 1,500 units, we built RentSafe to get our vacancies filled faster and empower our leasing team to stay effortlessly organized. You can create an account in seconds (no credentialing required) and start screening tenants in minutes! RentSafe is always free for landlords and property managers, so you can try it with no risk! If you have any questions about our tenant screening software, you can reach out any time!
