Your tenants are the engine that runs your business: it’s true! You might have the best property on Capitol Hill—but without the right tenants, you have an empty (and costly) investment.
That said, every landlord must know how to properly screen tenants. One of the biggest mistakes that early landlords make is not screening their tenants properly—and potentially opening themselves up to the risks of a “Professional Tenant.”
Your screening process is your first line of defense when it comes to protecting your rental property and yourself as the landlord. However, there are some tips and best practices you should apply to your screening process that help keep you in the clear when you’re trying to find your next ideal tenant. Here are our top suggestions on how to properly screen tenants for Capitol Hill houses for rent!
Note: This blog does not constitute legal advice. When in doubt, meet with a trusted attorney or your Renters Warehouse DC/NOVA Professional Landlord for assistance!
Begin With the Right Information
Starting with the right information can make a world of difference when it comes time to screen your prospective tenants! That said, the kind of information you collect will only make a difference if you do your due diligence after and follow up! With the risk of placing the wrong tenant, landlords need to become “Professional Sleuths” to protect their property.
When it comes to your application, it may be tempting to use a free template you find online: do NOT do this! Many of these “free” templates come with hidden costs down the road by harboring language that is damaging to landlords. Whether it’s drafting your application or your lease, working with professional property management or a savvy attorney can help you craft documents that are not only sound but safe.
Screening Your Applicants
When it comes to Capitol Hill houses for rent, a single property may have dozens of applicants! Therefore, screening your prospects also helps landlords narrow down their choices. Keep in mind that screening must be consistent for all applicants to comply with FHA discrimination laws—and can’t be based on your opinion.
What classes are protected by the FHA? It’s crucial for landlords not to base their selection on:
- Race
- Color
- National Origin
- Religion
- Sex
- Familial Status
- Disability.
An easy way for landlords to circumnavigate concerns about bias in their screening process is to work with a professional property manager in the DC/NOVA area. That said, there are some options that landlords can pursue when it comes to their screening criteria and finding the ideal tenant.
- Start by investigating the credit history of your potential tenant: does the applicant have a viable credit score? This varies by property. However, a 620+ FICO score is a good rule of thumb.
- What’s the employment history of your applicant? Do they have proof of income? It’s always worth doing a little digging into the employment history of your prospective renter to ensure they can meet the demands of your rent.
- You should investigate personal references or supposed landlord references carefully: verify that addresses given actually match the landlord attached to them and go hunting for answers.
- Always review applications for any gaps or missing information. The clue here may be the lack of information.
When Contacting the Applicant’s Employer
- Most companies with large human resources departments will generally only confirm that the applicant “is employed.”
- For privacy reasons, salary information is protected.
- The best way to verify income is to request the applicant to provide a paycheck stub.
When Contacting Previous Landlords
Contrary to popular belief, there is a lot of pertinent information that can be obtained from prior landlords. Be mindful of the applicant’s right to privacy while still asking relevant questions.
- Did the tenant pay the rent on time?
- Was the landlord given notice that the tenant was moving?
- Does the tenant have any pets? Were there any issues from pets?
- Were there any disruptions on the property due to the tenant? This may be key for identifying someone with a history of noise complaints, or something like domestic violence history with police involvement.
- Would you be willing to rent to this tenant in the future?
In some instances, there may be personal references instead of any rental history. When it comes to finding tenants for your Capitol Hill houses for rent, contacting at least two parties is crucial. If you’re dealing with a Professional Tenant, these kinds of references are often where things fall through.
Perform and Review the Credit Report
There is a cost associated with running a credit check, so it can be worthwhile to save this step for last when you’ve already narrowed your options down to a handful of prospects. An Equifax Identity Report will provide details about the applicant’s previous 7-10 years of credit history.
- Does the applicant have a history of late or missing payments?
- Are there any collections accounts?
- Bankruptcy?
- Current Debt?
Maxed out credit cards or several unpaid balances may be indicative of payments that may compete with the rent you’re asking for your Capitol Hill property.
Run the Background Check
There is a myriad of online background checks, but because this is usually a fee-based screening service, this check should be reserved for applicants who have cleared all previous qualifiers.
- Watch for any recent evictions, and investigate criminal and public records.
- Red flags may be prior lawsuits for property damage, unpaid rent, or unpaid child support.
- You are looking for someone who will keep financial commitments.
Be careful when reviewing an applicant’s criminal history: while a criminal record can be a red flag, landlords cannot deny a tenant based solely on their record. This is another scenario where working with a property manager or skilled attorney in Washington DC can protect you and shield your investment from potential bias.
Don’t Fear the Screening Process!
Remember: the screening process is designed to protect you and your properties by helping you connect with your ideal tenant. To do this effectively, it has to be thorough and free of bias that can land you in hot water with the FHA (and in some cases, the ADA or FCRA). Thankfully, you don’t have to try and navigate this potentially tricky process alone.
Renters Warehouse DC/NOVA has been helping landlords overcome the stress associated with the screening process! As your guide to financial freedom through Rent Estate™, we developed several hands-on tools that landlords can use to help take the bite out of renting their properties. The best part of all? It’s free!
You can get started by downloading your copy of our Tenant Screening Checklist!