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  • Writer's pictureThe Onyx Group

5 Tips for Screening New Tenants

Investing in a rental property for passive income is a great step toward financial freedom. Owning a property that earns you money can open doors to pursuing other interests and provide a steady monthly income for you and your family. However, the term passive income is misleading; property ownership and management still require quite a bit of work to be profitable. Beyond choosing the right property to invest in, having solid processes in place to choose reliable and responsible tenants is key to making the most of this venture. Whether you are a seasoned landlord with multiple properties or just starting out with your first rental home, these five tips for screening new tenants can help you avoid a costly mistake.

Verify Income When Screening New Tenants

Rental property ownership is a business. Your tenants are under contract to exchange money for domicile. It is your job as a landlord to ensure your property is up to par for their safety and comfort, including being up to date on all inspections and necessary repairs. However, you are also responsible for ensuring the tenants you choose to rent or lease to are capable of meeting their side of the deal. Failing to properly screen potential residents can put you in a difficult position.

One of the primary factors in choosing a responsible, trustworthy tenant is income verification. While an applicant may be able to provide the deposit, this isn’t necessarily proof of their ability to keep up with monthly rent payments. If a tenant is unable to do so, the cost falls to you, putting you in a difficult financial situation: either cover costs yourself and hope the tenant can catch up, or pay the fees and costs associated with filing for eviction and advertising the vacancy.

To avoid this, be sure to be thorough and attentive during the income verification process. Modern technology makes it easy to fabricate paystubs, bank statements, and other common forms of income documents. Discourage these fraudulent acts by:

  • Requesting two or more of the most recent pay stubs

  • Gathering employer contact info and verifying employment and salary info directly

  • Using an income verification service

Review Renter’s History For New Tenants

Just as a loan applicant’s credit history provides valuable information for potential lenders, a tenant’s renter’s history can uncover some vital information that may not be immediately available otherwise. Beyond just providing information about past residences, a renter’s history report shows:

  • Past evictions

  • Frequency of relocation

  • Payment delinquency

  • Contact information for previous landlords

Be sure to contact prior landlords for your potential tenants if possible-- but be mindful. If a tenant is truly horrible, the current landlord may be desperate enough to be rid of them that they give you misleading information. Try contacting a few landlords (if applicable) to get a fuller picture of what kind of tenant this applicant may be.

Another detail to pay attention to in the rental history report is how often this applicant relocates. While it is not necessarily an automatic disqualifier, a history of leaving a lease early or only staying in a home for a few months could be a sign of trouble.

Be Sure to Perform A New Tenant Background Check

A background check goes further than a renter’s history report in that it provides a fuller picture of who you may be renting to. While it is entirely possible for a good tenant to have a less than stellar past, having that information available gives you the opportunity to make a fully informed decision.

If you’ve never requested a background check for a tenant before, they include:

  • Arrest and incarceration records

  • Convictions

  • Court records (including eviction proceedings)

  • Active warrants

  • Sex offender information

As a rental property owner, it is your responsibility to keep everyone’s safety in mind. We certainly believe that everyone deserves a second chance, but be mindful, especially if this person has a history of violence and/or repeat offenses.

Get EVERYTHING in Writing When Leasing to New Tenants

There are advantages to modern technology when it comes to property management and screening prospective tenants. Namely, it is now easier than ever to modify contracts, collect signatures, and get everything in writing. This is important as your records are valuable as evidence should you have to pursue an eviction. Be aware of what kind of records are actually valid in court, however: while texts are fine for everyday communication with your tenants, they may not be submissible to court as a form of due notice.

What kind of things should you get in writing? Anything that changes the terms of your rental agreement. This includes:

  • Adding or removing a tenant from a lease

  • Changes to the rent due date

  • Changes to the rent amount

  • Adjustments to the pet policy

  • Updates to tenant responsibilities

  • Updates due to changes in state or county policy

Not sure if your lease is legally sound? The Onyx Group will gladly assist in reviewing and updating your rental agreement documents to protect your best interest. We are dedicated to helping you protect the business you’ve worked so hard for.

Learn more about our services here.

Meet Prospective Tenants Virtually or In-Person (When You Can)

In this digital age, it’s easy to get too reliant on the convenience of online services. Finding, screening, and approving new tenants entirely over the internet is easy, but it comes with some major risks, especially fraud. Instead, take the time to meet potential residents either in-person (safely and responsibly) or via Zoom, Skype, or phone call. This gives you at least some idea of their personality and what you can expect of future interactions. While this certainly isn’t foolproof, go with your gut: if you have a negative feeling about an applicant, it’s likely for a reason.

When meeting with your applicants, be very clear about your expectations for tenants, any rules in place for the property, and take some time to address any questions or concerns they may have. This along with your leasing agreement will help to ensure there are no surprises or miscommunication.

Have questions about how to manage problematic tenants and your options?

Contact the Onyx Group today!


All information and tips provided in this blog are meant for informational purposes only and do not constitute legal advice or an attorney-client relationship.

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