Choosing The Right Tenant

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by Dave Zundel, Co-founder, Realtor ®, Investor.

Choosing The Right Tenant

Most problems Landlords experience are the result of choosing the wrong property or the wrong tenant.  Once you own a rental (good, bad, or ugly), you need to choose the best tenant your home will attract.  We cover “Choosing the Right Property” in another article.  So what does it take to properly screen a tenant?

Before we get to the steps involved, let’s talk about the right mind set.  We have worked with hundreds of investors and heard every horror story.  Most bad endings start with a desperate beginning.  In a panic to get the mortgage covered you may ignore red flags and settle for just getting the home rented.  The path to a painful eviction after three months and the path to a happy tenant of five years both begin with that first phone call.

So how do you avoid mistakes?  Relax, be patient, and be objective.  If you can’t consistently choose the best tenants, using a professional property manager will save you a fortune in lost rents, legal fees, and repairs.

Attracting the Best

You can’t get the best tenant if they aren’t calling you!  Make sure your marketing strategy is putting your property in front of the right people, and getting their attention.  What works best in your area?  Are the best tenants still house hunting in the newspaper, or are they on the internet?  Which papers have the best readership?  Which websites really get searched the most for your type of property?  Do  your homework before you spend hundreds of dollars experimenting on ineffective advertising.

Taking the Calls

Remember, screening is a two way process… the tenant is looking for the right property, landlord, or manager too.  Tenants who can’t be approved by a savvy investor or property manager may settle for voice mail and slow call backs.  If you want the best shot at the right tenant, take the calls live and be ready to SELL them on why they should choose your home!  Just as a motivator, calculate how much rent you expect per day and never forget that every day you lose along the way is that much money out of your pocket.  “I will call them tomorrow” can’t be an option for a successful landlord.

Ask the Right Questions

The screening process begins with the way you answer the phone and the questions you ask. This is true for landlords, real estate agents or property managers.  Don’t make it up as you go!  Be prepared for the questions the prospective tenant will ask, and know what you are going to ask them.  You will only sign one lease, but should be taking dozens of calls.  If the person you are on the phone with isn’t going to qualify you want to spend as little time as possible finding out!

Tell them about initial rent and security deposit requirements.  Discuss other important facts regarding the rental that may help disqualify the prospect. Anyone who doesn’t want to answer your questions probably won’t qualify so protect your time.

The Application Process

If you don’t have a quality rental application, get one! The applicant should know they need to fill out the application completely and that you will be running a background check.  Before you approve a tenant you should check: public records for outstanding judgments; criminal background; current residency; employment; and of course, a thorough credit check.

Be consistent in the way you handle applicants!  Have a detailed process and follow it every time.  Make sure you understand the Fair Housing laws and the state specific Tenant and Landlord statutes that apply.  Being all over the board with your screening process could set you up for a discrimination lawsuit.  We are constantly asked by owners to do things that would be a direct violation of the law.  If you don’t know what you can ask, and what criteria you can use to disqualify a tenant, you may be headed for trouble.

The Approval Process

Have fun with this!  You are giving the applicant great news… you can have the home you want.  Congratulate them and build excitement for the move.  This is the time to go over any concessions, repairs, etc. that have come up.

Set the date and time for the lease signing and make sure they know exactly how much money and identification to bring with them.  Do you accept cash?  Personal checks?  Only certified funds or money orders?  If you don’t give clear instructions, the lease signing will not go as planned.

Never give out keys until the lease is signed and all funds are accepted!

The Lease Signing

The Lease will govern your relationship with your tenant for a long time so make sure it is a great lease! You can download a generic lease but it may include language that isn’t in line with your state laws.  Make sure you are using a lease that is time tested and will hold up in court.

As long as everybody does exactly what they agreed to, the lease doesn’t matter… when (not if) things go sideways, the Lease governs how you interact with the tenant.


If you are managing your own property, use the best possible contracts, educate yourself about the law, and be patient.  If you decide to use a professional management company, choose the best.  When it comes to tenant screening, rushing a deal or cutting corners will come back to haunt you almost every time.  The costs involved in doing it right are trivial compared to the added months of vacancy, legal expense, and repair bills associated with poor tenant screening.

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