Screening tenants in Eureka and throughout Humboldt County is an important part of your leasing process. Once you’ve
marketed your property effectively, you’ll have a lot of prospective renters wanting to see the home and fill out an application.
You only get one opportunity to choose the right resident.
We’re sharing some of the best tips and the strongest criteria you’ll want to use when screening tenants for your investment property, and the type of information you’ll need to collect on the rental application.
Remember that fair housing laws are stricter in California than they are on the federal level. You absolutely must pay attention to your process and make sure it’s consistent, objective, and fair.
Start with a Strong Rental Application
The rental application is almost as important as your
lease agreement when it comes to documentation. You’ll use the application to screen your tenants, and there are two important purposes to the application:
- The application will allow you to collect pertinent information about the applicant’s background, rental history, and financial status.
- The rental application will grant you permission to conduct a full background screening, check credit, and talk to landlord references.
Every resident who is 18 years of age or older will need to complete an application and be subject to a full screening. You’ll want to use an application that’s been approved by a
Eureka property manager, an attorney who specializes in landlord and tenant law, or a local association or organization within the industry, such as the California Apartment Association (CAA).
A good application will ask for identifying information, including a current address, a phone number, email address, and a social security number. Ask for a copy of a government-issued I.D. A driver’s license or a passport will work.
Your application should collect information about employment. Get the name and address of a current employer, dates of employment, and the salary that’s earned.
Ask for contact information for current and former landlords. You’re looking for five to 10 years of rental history.
On the application, ask if the prospective tenant has ever been evicted, convicted of a felony, or asked to leave a
rental home. Ask if there is a foreclosure or a bankruptcy in their history.
The application should
ask if there are pets or dependents moving into the home with the tenant. If there’s a vehicle that will be parked at the property, ask for the make, model, and license plate.
Application fees in California are limited every year, so make sure you understand how much you can charge before you collect the application fee from your prospective tenants.
Screening Tenants in Humboldt County: Establish Rental Criteria
Now that you’ve collected applications, how do you screen your tenants?
You start with standard rental criteria, which should be provided to prospective renters before they complete and submit an application. Your criteria will protect you from making fair housing mistakes and allow all potential applicants to self-evaluate whether they have a good chance of being approved for your property.
The criteria you establish must be used every time you screen a tenant. It should reflect what you are looking for in terms of:
- Credit
- Income
- Eviction and criminal history
- Rental history
Maybe you’re looking for a minimum credit score or income threshold. Include that in your criteria. If you won’t consider a tenant with any evictions in the last 10 years, make sure your criteria reflects that. Make your rental criteria available to all applicants, and be sure you’re following it every time you screen a tenant.
Screening Tenants for Income, Credit, and Rental History
You’re screening tenants because you want to make sure you’re renting to reliable, responsible people who can be counted to pay rent on time and take good care of your investment property. This is not a decision you should make on instinct. Don’t trust your gut. Instead, trust the data and make sure you’re using the standards you’ve put into place.
Here are some tips on how to make sure you’re screening for the most qualified tenants:
- Use industry best practices when evaluating income. Most
property managers and landlords will look for residents who earn at least three times the monthly rent. You can request documentation that verifies income amounts, such as pay stubs, employment contracts, tax forms, or bank statements.
Credit that reflects responsible bill paying habits and debt management. You might find a credit report with high credit card balances, but if the accounts are in good standing and payments are made every month, you’re probably working with a reliable tenant. Red flags would include money owed to former landlords or utility accounts that are in collections or shut off. Your tenant’s priority should always be housing-related bills.
Look for past evictions. Some landlords will not rent to tenants with any eviction history at all. Others, are looking for no evictions for the last 10 or 15 years. If you have an applicant who has been evicted two or three times in the last five years, this might not be the right tenant for you.
Criminal histories. It’s becoming increasingly difficult to use criminal histories in the screening process. Most important is that you don’t find records of violent crimes or convicted felons.
Satisfactory rental history. Call landlord references. You can talk to the existing landlord, and we also recommend that you talk to one or two past landlords. Ask if rent was paid on time, if the tenant took good care of the property, if they followed the terms of the lease agreement, and if they were easy to work with. Always ask a former landlord if they’d be willing to rent to your tenant again.
