What to Look for in a Tenant: How To Save Yourself Trouble

When you’re watching TV detective shows, it looks kind of fun, scrutinizing clues and trying to solve a mystery. Well, that’s exactly what it feels like when you’re figuring out what to look for in a tenant.

You look at rental applications. You cross-check references. And yes, you even cosplay Sherlock Holmes with their credit reports.

In spite of all the investigation, you may still end up with renters who fail to pay rent promptly or have a tendency to create maintenance issues.

So how do we crack the code of finding good tenants? In this blog, I’ll help unveil some key factors that will show you what to look for in a tenant. 

We’ll delve into screening processes such as background checks and income verification, understanding legal aspects including fair housing laws, and the red flags landlords need to be aware of.

Table Of Contents:

Tenant Screening Process

Every property manager knows the importance of a thorough tenant screening process. It’s not just about filling vacancies—it’s about finding reliable, responsible individuals who will respect your rental property and pay rent on time.

The Importance of Comprehensive Background Checks

Background checks are crucial in this process. They can reveal potential red flags such as a criminal record or previous evictions. For instance, did you know that nearly one in five rental applicants screened had at least one hit on their criminal record? 

SmartMove background checks, for example, encompass nearly 300 million criminal records from state and national databases.

A comprehensive check should include verification of employment history and income—a good tenant should be able to afford the rent comfortably each month without fail. Checking references from previous landlords is also an important step; they can give insight into whether the prospective tenant was respectful towards their property or if there were any late payments or maintenance issues.

Credit scores are another essential aspect to consider during screening—good credit generally suggests financial responsibility which may translate into timely payment of rents and fewer headaches down the line for landlords.

Fair Housing Considerations During Screening

The fair housing act mandates equal treatment for all renters irrespective of race, religion, sex etc., which is why it’s critical to make sure that your selection criteria doesn’t inadvertently discriminate against protected classes under these laws. 

While it might seem like a lot to keep track off when evaluating tenants – remember getting this right upfront saves significant heartburn later.

Qualities of a Good Tenant

When searching for the ideal tenant, landlords should consider several key factors. Many landlords consider an applicant’s criminal record to be a deal breaker. 

The Role of a Positive Rental History

A positive rental history can be a strong indicator of reliable and responsible behavior. Tenants who have shown respect for previous properties and adhered to lease terms are likely to continue this pattern. Moreover, good tenants usually maintain clean living spaces and handle normal wear with care.

In addition, they also exhibit good communication skills by reporting maintenance issues promptly and respectfully negotiating any disagreements about property management matters. Reference checks with previous landlords provide valuable insight into these aspects.

Significance of Timely Rent Payments

Timeliness in rent payments is another crucial factor when determining the quality of prospective renters. Consistent on-time payments indicate financial responsibility as well as respect for the landlord-tenant relationship.

Potential tenants who have demonstrated their ability to manage finances wisely will often possess good credit scores – an important consideration during the screening process. However, remember not all bad credit scores result from irresponsible behaviors; some may arise due to unforeseen circumstances like medical emergencies or job loss.

Do You Need A Property Manager?

If you’re juggling too many balls in your rental business, it might be time to think about hiring a property manager. They bring their expertise in tenant screening and are adept at handling maintenance issues.

A seasoned property manager knows the ins and outs of lease terms. They’ll ensure your tenants understand all the rules – from pet policies to quiet hours. It’s not just about getting folks to pay rent on time but creating an environment where everyone respects each other’s peace.

Moreover, they can take over some tricky tasks like rent collection. Chasing late payments is no one’s favorite job, right? But that won’t bother them. 

With their experience dealing with such situations, they can handle these awkward encounters professionally while keeping good relations with tenants intact.

Beyond financial matters though, property managers also excel in tenant communication – answering questions promptly and fixing any problems before they escalate into serious disputes or legal troubles.

The Legal Side of Things

Navigating through housing laws could feel like walking through a minefield for most landlords – but not for our trusted ‘property managers’. From Fair Housing regulations to state-specific landlord-tenant laws, they have everything covered.

This means less stress worrying if you’ve crossed any lines unknowingly because let’s face it; ignorance of law excuses no one.

The Marketing Masterstroke

Your properties need exposure to attract quality renters quickly – this is where the marketing skills of property managers shine bright. Not only do they know how best to present your rentals (think high-quality photos & engaging descriptions), but by using ManageCasa’s rental listing syndication service, they can also help your listings reach a wider audience.

Hiring a reliable property manager could be the ideal solution if you’re aiming to maximize your rental income while avoiding having to personally manage the properties.

Considerations for Commercial Tenants

Finding the right commercial tenant can be a complex process. It’s not just about filling vacant spaces; it’s about finding businesses that align with your property and can sustain their lease terms.

Evaluating a Prospective Commercial Tenant’s Business History

One crucial aspect to consider is the prospective tenant’s business history. This gives you insight into their financial stability, which is essential in ensuring they meet rental income potential and comply with lease terms consistently.

A well-established business often indicates a more stable tenant. Examine their duration of operation and see if they have experienced any considerable rise or fall over that period. SmartMove background checks, for instance, could provide valuable insights into the company’s past dealings.

The type of industry also matters – compatibility between your property and their line of work ensures fewer zoning compliance issues down the road.

Beyond these aspects, consider if there is synergy between existing tenants (the ‘tenant mix’) as having complementary businesses on-site can drive mutual success through customer cross-overs.

Maintenance Responsibilities

In addition to rent payments, commercial leases usually require tenants to shoulder some maintenance responsibilities for their premises. Hence why understanding what upkeep tasks are manageable within their budget becomes important too.

Please note: All information provided here aims to assist landlords gain better insight when evaluating prospective commercial tenants’ suitability. Always ensure thorough screening processes take place before making an informed decision.

Understanding Credit Scores and Reports

A credit score, as many of you know, is a three-digit number that represents your financial responsibility. But it’s not just any old number—it’s like the ultimate report card of adulthood. It lets landlords gain insight into whether you’re good for your word—financially speaking.

This crucial figure is calculated based on the information in your credit report. This includes how often you pay bills on time (are late payments a trend?), if you’ve ever been evicted (talk about an F grade.), or if negative credit events linger in your past.

Your potential landlord will likely check this using a tenant screening service. So remember when Mom said she had eyes at the back of her head? Well, landlords have their ways too.

The ABCs of Creditworthiness: Assessing Tenant’s Financial Responsibility

What scores are considered to be “bad” credit? A bad credit score can be anywhere from 300 to 579 according to most models—an F grade for sure. Anything above 670 usually indicates “good” financial health.

In addition to looking at scores, property managers also examine income-to-debt ratio because it gives them more context beyond just a three-digit number. Think of it as being graded both on homework and class participation—the whole picture matters.

Importance of Income Verification

Verifying a tenant’s income is an essential part of the real estate process. That’s where income verification comes in handy.

This process involves checking an applicant’s financial stability and employment status. The aim? To confirm that they can comfortably afford your rental property without straining their budget.

A stable monthly income shows that tenants have a consistent cash flow, giving landlords peace of mind about regular rent payments. But how do you determine what constitutes ‘stable’?

Determining Stable Monthly Income

A general rule many landlords use is the 30% guideline: if a tenant’s gross monthly income equals at least three times the rent, it’s usually considered sufficient for affordability assessment purposes.

Beyond this basic requirement, look out for additional financial resources like investments or side gigs which might bolster an applicant’s ability to cover rental costs consistently.

Why It Matters?

The main reason why landlords should carry out thorough checks lies in reducing risks associated with late payments or evictions – both time-consuming and costly scenarios best avoided.

Landlordology, states that having proof of an applicant’s stable source(s) allows you as a landlord to feel confident about their capacity to meet lease terms while maintaining other life expenses.

Remember though, fair housing laws mean all potential renters must be treated equally during screening processes – even those whose primary earnings come from sources like disability benefits rather than traditional employment.

Finally, bear in mind this step forms part of wider considerations such as credit scores and reference checks when selecting your next occupant.

Red Flags to Watch Out For

Tenant screening is like a treasure hunt, but sometimes you stumble upon red flags instead of gold. Spotting these warning signs early can save landlords from potential headaches and financial losses.

The Cost of Overlooking Red Flags

Neglecting the red flags during tenant screening can lead to heavy costs. Eviction-related outlays for landlords could span from $3,500 to a whopping ten grand on average. Moreover, each month of tenant turnover could cost around $1,750.

Late payments are one such red flag. They indicate that a prospective tenant might struggle with timely rent payments in the future as well. Also look out for tenants who’ve been evicted before – it’s not something that happens without good reason.

A bad credit score also rings alarm bells; it signifies poor financial management skills or an unstable employment history which could mean trouble when it comes time to pay rent. SmartMove background checks, which encompass nearly 300 million criminal records from state and national databases show almost one in five rental applicants have some sort of hit on their record – another major concern.

An incomplete rental history or negative references from previous landlords should raise eyebrows too – if they had issues before then chances are you will too. Poor communication skills may hint at future problems while discussing maintenance issues or lease terms.

If there’s property damage beyond normal wear and tear at their current place – think again. Finally an unwillingness to sign a lease agreement should make any landlord feel confident about moving onto the next applicant because this shows disrespect towards your rules right off the bat.

Remember folks: informed decisions help protect your rental business. 

What Are The Benefits Of Careful Tenant Selection?

Finding the right tenant for your rental property is more than just a task. It’s an investment in peace of mind, stability, and consistent rental income. Let’s explore the advantages of having a dependable tenant.

The Advantage of Stability

A good tenant pays rent on time, respects the lease terms, and minimizes maintenance issues. This reduces stress for you as a landlord while maintaining harmony within your rental business.

In fact, landlords gain significant insight from their tenants’ previous dealings with other landlords or property managers. So it’s always beneficial to check references diligently during the screening process.

Reliable Rental Income

Tenants who consistently pay rent timely contribute significantly towards stable monthly income for landlords – this can’t be overstated.

To make sure they afford the rent comfortably, checking the applicant’s financial status including credit scores is vital before making any informed decision about potential tenancy agreements.

Maintaining Property Value

A responsible tenant treats your property well, reducing normal wear and tear which helps preserve its value over time. SmartMove background checks can help identify such reliable renters.

Saving Time and Resources

Hiring property management services like ManageCasa could free up considerable amounts of valuable personal time that would otherwise have been spent dealing with late payments or additional financial headaches caused by problematic tenants.


FAQs in Relation to What to Look for in a Tenant

What qualities do you look for in an ideal tenant?

An ideal tenant is punctual with rent, maintains the property well, and communicates effectively. A solid rental history and stable income also play a part.

What is the best type of tenant?

The best tenants are those who respect their lease terms, keep open lines of communication with landlords, and have steady employment. They’re also folks who treat rentals like their own homes.

How do you filter tenants?

Tenant filtering involves comprehensive background checks including credit score assessment, reference verification from previous landlords, criminal record check-up and proof of income stability.

What qualities do you value most in a landlord?

In a landlord: responsiveness to maintenance requests; transparency about rules; flexibility when needed; clear communication – these all make life easier as a renter.


Unlocking the secret of what to look for in a tenant is like cracking an intricate code. And you’ve just walked through each step, methodically and meticulously.

We dove into comprehensive background checks – crucial tools that unveil potential red flags from criminal records to eviction histories.

You gained insight on identifying good tenants by checking rental history and ensuring they pay rent on time. Remember, reliability is key.

Engaging property managers? Yes! They handle everything from maintenance issues to lease terms while helping maximize your rental income.

Fair housing laws got demystified too; equal opportunity matters in every landlord-tenant relationship. And yes, credit scores matter as much as verifying prospective renters’ income – it’s all about financial responsibility after all.

And those pesky red flags? Keep an eye out for late payments or unstable employment history among other things because nobody wants a tenant evicted situation.

Terence Young
Terence Young

Founder of eFunder

Recommended Reads You Won't Want to Miss!

Stepping into the world of commercial real estate can be a game-changer for any business owner. A business mortgage is your ticket to owning that ideal storefront, warehouse, or office space. Think of it as an investment in your company’s future—a chance to build equity and even bring in some...

Ever felt like you’re drowning in the vast sea of commercial real estate? An experienced commercial mortgage broker can throw you a life vest and bring you safely to shore, finding the best deal and loan option to suit your budget and lifestyle amid the confusing myriad of choices. A...

Let’s cut to the chase: flipping houses is hot, but without a stack of cash on hand, you’ll need a solid plan. That’s where fix and flip loans come into play. They’re the secret sauce for investors hungry to transform tired residential properties into real estate gold mines. Discover how...

Ready to Get Started?

Our Consultations are FREE. Meet eFunder’s Team and Schedule an Appointment

IT Support by SADOSSecure, Fast Hosting for WordPress