How do you match tenant screening criteria to your property type and goals?

1 Know your market

Before you set your screening criteria, you need to understand the supply and demand of your market, as well as the preferences and expectations of your target tenants. For example, if you have a luxury apartment in a high-demand area, you can be more selective and strict with your criteria, such as requiring a higher income, credit score, and security deposit. On the other hand, if you have a low-cost or rural property in a low-demand area, you may need to be more flexible and lenient with your criteria, such as accepting lower income, credit score, or security deposit, or offering incentives or discounts.

2 Define your goals

Next, you need to define your goals as a property owner or manager, and how they align with your screening criteria. For example, if your goal is to maximize your occupancy rate and cash flow, you may want to lower your criteria and accept more applicants, as long as they meet the minimum legal and financial requirements. However, if your goal is to minimize your risk and maintenance costs, you may want to raise your criteria and reject more applicants, as long as you comply with the fair housing laws and avoid discrimination.

3 Choose your criteria

Once you have a clear idea of your market and goals, you can choose your screening criteria based on the type and quality of your property, as well as the type and behavior of your ideal tenants. Income, credit score, rental history, and background check are all common criteria used by property managers. For income, it's generally recommended to require that the tenants' gross income is at least three times the rent amount, though this ratio can be adjusted depending on the market and goals. Checking credit score is important to evaluate financial responsibility and trustworthiness. When evaluating rental history, contact current and previous landlords to get information about payment history, lease compliance, maintenance issues, complaints, and eviction records; you may also request proof of rent payments. Lastly, a criminal background check should be conducted to reveal character and safety; however, you should be careful not to violate tenants' rights or discriminate against them based on their criminal history.

4 Apply your criteria consistently

Finally, you need to apply your screening criteria consistently and fairly to all applicants, regardless of their race, color, religion, sex, national origin, disability, familial status, or any other protected class. You also need to document your screening process and criteria, and communicate them clearly and transparently to the applicants. You can use a written screening policy or checklist, and provide a copy to the applicants. You also need to follow the federal, state, and local laws and regulations regarding tenant screening, such as the Fair Credit Reporting Act (FCRA), the Fair Housing Act (FHA), and the Equal Credit Opportunity Act (ECOA).

By matching your tenant screening criteria to your property type and goals, you can increase your chances of finding the best tenants for your units, and reduce your risks and costs as a property manager.

5 Here’s what else to consider

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