Indianapolis Property Management
and Investor Services

Indianapolis Property Management Blog

4 Tenant Screening Tips You Should Know

System - Tuesday, June 21, 2022
Property Management Blog

About 50 percent of the single-family rentals in the US were initially purchased as primary residences. When the home transitioned to a rental, the owner may have been left unprepared to manage a rental property. If that's your situation, there's a lot to learn.

The right tenant can make the difference between earning income from your rental property and losing your shirt. Here are some tenant screening tips to help you find the right tenants.

1. Streamline Your Process

Tenant screening includes checking an applicant's credit score, but it doesn't stop there. A complete process to screen new tenants consists of rental history, a criminal record check, and an eviction check. When you create an organized system, the process will be a lot easier. 

Prepare a list of contacts and websites you'll need to do the various checks. Create a checklist and use a spreadsheet to keep track of your results. As the data comes in, update it so you can see how the tenant is ranking.

2. Use a Screening Service

Tenant screening services can perform each background check and track them in a report. Look for a company with defined qualifying criteria for tenant selection. You'll be able to review their standards and decide if they will satisfy your needs. 

They can accept each tenant application on your behalf and prepare a summary of the information collected. They have the right tools to make the process much faster, and you will gain peace of mind.

Their management team can work with you to establish occupancy limits for your property and communicate those limits to prospective renters. Professional property managers will follow Federal Fair Housing laws and the applicable local fair housing ordinances and guidelines.

3. Ask For Proof of Income

A credit score or credit check can give you some great information about a tenant's history with credit. It doesn't tell you if they earn enough income to pay their rent.

Ask for proof of income in the form of a recent paystub. Follow up with a phone call to their employer to verify employment. Use a rent-to-income standard to decide if they can pay. A common rule of thumb is the applicant needs to earn 3 x their monthly rent.

4. Understand Credit Reports

A credit report includes several main sections to help you understand your tenant's reliability. Learn how to interpret the information. Pay special attention to the address and recent employment information and compare it to the information provided by the applicant. 

  1. Applicant ID includes name, current address, and recent employment 
  2. Collections agencies and public court information
  3. The credit score 
  4. Recent (2 years) searches from other companies 

A credit score shows credit behavior and will be between 350 and 850. A good tenant will have a higher number on their credit score. 

Use Our Tenant Screening Services Today

We offer full-service property management, including tenant screening services, to help you get the right people for your property.

Contact HomeRiver Group for one-stop shopping for all your rental property needs in the Chicago Illinois area. We will help you maximize your rental's potential.