Episode 11: Screening Tenants: Facts Over Gut Feelings
The number one MOST IMPORTANT thing you can do as a landlord: SCREEN your tenants! Set you and them up for success! Make sure your tenancy screening requirements are posted or published, including the requirements for the specific unit you are looking to rent. Look for the red flags including expired IDs and fake pay stubs, seek out the deal breakers. Make sure the unit works for them, and that you can get them fully qualified. Most of the landlords that I see in unfortunate situations did NOT screen their tenants. Remember, potential tenants are on their best behavior BEFORE you rent to them - do not go on gut feelings! As a Landlord, you must trust facts.
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Full Episode Transcription
Welcome to My Life as a Landlord, where we untangle all things housing and educate the curious. If
you're looking for some entertainment with some honest, awkward conversations, you've come to the
right show. I'm your host, Dr. Jennifer Salisbury. This is my life as a landlord. Welcome to it. 1s Well,
hello there. Welcome to another episode of My Life as a landlord. This is your host, Dr. Jen, and today I
will be educating you as a landlord on how to screen your tenants, your potential tenants, how to go and
find the facts over your gut feelings. Feelings in business don't count. Sorry to tell you that this is one
thing as a landlord that you cannot skip. You cannot skip screening. You must qualify each and every
potential tenant the same way, making sure that you're going on fact and source documents, not on gut
feeling, not how they looked, not how they acted. Of course, when you meet them, you might think,
oh, they're they're very nice and they've got a clean car and they look really good and that's great. Show
me the documents, show me your application. Let's look at everything as we go. Now, of course, it also
goes the same way. If they show up and their hair is a mess and their car is full of garbage or they're late.
How you do anything is how you do everything. So you need to be careful on that. But you cannot go on
gut feelings. As a landlord, it's number one priority. You must screen your tenants properly. So let's get
right into it. 1s Number one, you've got to at least publish the requirements somewhere on how you
screen your tenants. Now you can screen your tenants in general on income levels, credit score levels
being limits. You've got to have some kind of requirement. And then usually per unit, there's a
requirement as well. Like, for example, some units I have, the fire chief does not allow us to have
barbecues on the decks because the decks are wooden. So that's something specific that if they have a
barbecue, guess what? You can't have it there. So some of the other requirements, how do you actually
publish them? Your tenant screening requirements need to be somewhere that people can find. You can
put them in the ad. If you're going to post an ad, you can put them in the ad. I have a website, and on my
website it says straight up how I screen tenants. I typically look for at least two times the income,
sometimes three times the income based on the rent, based on the area. You want to make sure you are
secure. Remember, a landlord is nothing more than a lender to the tenant. The tenant is paying you rent
in exchange for maintaining the asset that you're letting them use. So income and then credit score the
credit score. Credit report is very important if the tenant is not able to provide you credit report or credit
score. Tenant verification. CA is the one I use in Canada. Tenantverification.com is in the US. And there
are so many others in the US. But the difference is in Canada, when I check someone's credit. First of
all, you have to have permission, which I get permission when the tenant fills out the application. I have
permission to pull their credit, but I pay for it. This is in Canada. In the US. You can send the potential
tenant a link from the program. They get emailed and then they pay for it. And either one, the tenant can
get a copy of the report and the score, and so can you. But they pay for it in the States, so it's usually
somewhere $30 or $40. And you want to make sure that you're seeing what's on their credit. Also, for a
unit, you want to make sure that the being limit, meaning how many beings are in the units. Now,
sometimes your local residential tenancy code will tell you that multiple is sometimes it is. For every
bedroom, you can have two people. So if you've got a two bedroom unit, can be four people. If you've
got a three bedroom unit, can be six people. However, or six beings. Now, remember, a being is adult,
child and or pet. For my stuff in British Columbia, for my there's no requirement for the being limits.
And so what I've done is I have two or one bedroom units. And so the being limit I've done is very
similar. I take the bedrooms and then I add two. So if I've got a two bedroom unit, I add to the being limit
is four. For a one bedroom, it's three. A little bit different because I have smaller units. Non smoking
tenants versus smoking tenants. I don't offer any smoking units. That's not something that we offer.
Everybody has to. If they have smoking as a habit, they smoke outside, but the smoke can waft in. I can
tell you the worst damage we've ever had done in a unit is from smoking. They either smoke in it or they
smoke near it. It does horrific damage. The walls have to be scrubbed, then repainted. The light fixtures
all either have to be changed or scrubbed. 1s It's an amazing amount of work, and it just does so much
damage. And it can be. Prevented. And this is why it's so frustrating. So as a tenant screening
requirement, many times I am now going to non smoking tenants. I'm not even considering smoking
tenants because of the amount of damage that smoking has caused in our units. Pets is another thing that
you can publish. One of the things that we offer, we don't offer any aquarium based animals, whether
there's water in it or not. So we don't offer any lizards or iguanas or ferrets or fish. No aquarium based
pets. And then if we're offering dogs, then the dogs have to be at least one years old. They have to be on
flea medication, and they have to be fixed. We don't want dog brawls. And then, of course, we've got to
have people be responsible to pick up dog poo. If dog poo gets out of control, then if I have to pay
somebody to pick it up, then we'll change that expense with proper notice. But the pets you have to
publish what the pet policy is. And one of the other things I have other requirements that I use in my
tenancy screening. 1s But it's vehicle limits and the details. All of the vehicles at our properties have to
be insured and operating. They have to be vehicles, meaning a car or a noncommercial truck. We don't
take pickup trucks or ambulances or boat trailers or RVs, any of that. I don't have the space at my units.
And so all of this is published ahead of time. In theory, potential tenants would know these screening
requirements in advance. Either on the website, you can post it on your front door, you can post it
wherever you're advertising. So that's the first thing. As a landlord, you must screen your tenants. So the
first thing, you got to tell your potential tenants what you're screening. The screening criteria, you got to
tell them what they've got to meet in order to qualify. But the second thing is, in your unit advertisement,
you need to make sure that there is a way that they can apply. People say, how do I apply? How do I do
this? How do I do that? In your advertisement, you need them to do something. Pick up an application
here, email it here, go to this website and apply here. You got to tell them how to do something. Now,
before we show a unit, we receive. Even a partial application. I call it a prescreening application. It's
enough to give us their basic information. They might give us an ID. Maybe. But even if there's no ID.
At least I have their name, number, phone number, maybe their income level, and just take a look. And
what I'm looking for is their deal breakers. If this is a unit that is for non smoking tenants and their
smoker s, they don't qualify for that unit. It's that simple. Or if it's a non cat building, which I have, if
they have a cat, they are not qualified. Now, I might reach out to them, depending on how many
applicants we have, and say, look, this is a non cat building. Are you able to rehouse your cat
somewhere? Potentially. I've only done that once, and predictably, the cat showed back up at the unit. So
that doesn't work. But you're looking for some basic info in the application. Ultimately, you're looking
for the red flags. When you receive an application before the showing, this is how I do it is before the
showing. I look for the red flags I have received over the years fake pay stubs, lying about anything and
everything. Expired ID. telling me that their boyfriend has rented another apartment down the street,
which I know is a bold faced lie. You're looking for the deal breakers. You're looking for the red flags
because how they do anything is how they do everything. But let's say you've got an applicant that
looks, that meets all the criteria that you've published. They've given you a bit of a prescreen. They may
not have given you everything you need. Like there's no pay stub, there's no ID, there's none any of that.
No credit score. That's fine. At least you can prescreen them. And then we would schedule a showing,
show the units and make sure that the unit works for them. It's not just you screening them, it's them all.
So realizing, oh, hey, this is close to the gardens, and I like that, or I don't like that, or I'm right on the
edge of the driveway and there's a lot of traffic, and I'm a day sleeper. Well, maybe they don't like that. I
don't know. So the question then is, does the unit work for them? That's the whole idea of the
advertisement of the units is getting an application, screening that application based on your published
requirements, and then if they are interested, then we need to move forward. So the first thing you do
when you move forward is you got to go back. First thing I do is I send them an email or a phone call.
Most of the time it's an email, and I say, I'm so glad this unit looks like it's going to work for you. To
fully qualify you, I need and then I make a list of the items that are missing from their original
application. Mainly I'm missing your ID. I'm missing some kind of a pay stub or income verification. I'm
missing a reference for, let's say, your last landlord. I'm missing that phone number. And if you have a
credit report and or score within the last 30 days, I'm missing that too. When you can send those to me,
we can move forward. And I send that to them and the onus is on them to get back to me with the items
that I need. If they don't ever respond. That's it. I've already moved on to the next applicant. Because,
remember, as a landlord, this is your business. You're not hanging on one person waiting to do
something, but in the meantime, you're asking them to provide stuff. But there's ways that you can also
help qualify them that don't cost any money at all. So the main one is you can do a court check from
wherever area that they are in. If they're in the local area, you just check the courts, the court records,
public court records of where you're in. And most of the time, you can do this online. Sometimes you
have to pay for it. In Canada, depending on which province you're in, you can do a free online search for
both criminal records and civil records. Sometimes you can see them, and if there is an additional record
that you can pull, you have to pay for it. I think it's $6, but every once in a while, I will pull it and I will
pay the $6. But if there's anything glaring like they've got an assault charge, especially a recent assault
charge, that's something that you need to look at. This is a hot topic that comes up on Facebook that if
you've got someone who is a felon, certain places, certain provinces, certain states, says that you can or
cannot discriminate based on criminal records. So this is a very hot topic. It is a very current topic. But
the criminal aspect, most of the time, your criminal check will come up as a traffic violation or nothing. It
will come up very nothing, very low, very mild. 2s I mentioned the credit check in the US. They pay in
Canada, the landlord pays. And then you want to check their references. You want to pick up the phone
and you call people. In. One of the next podcasts for the landlord, I will talk to you about how do you
actually check references. What do you say? Is there a checklist? There is definitely a checklist to keep it
short and sweet for what you need to find out and for the other person on the other end of the line doesn't
have to interface with you for 15 minutes. Get up, get on the phone with them and find out what you need
to find out, and then we're done. One of the main things for references, either as a landlord, sometimes
I'll get a professional reference. They can't be related if it's their mom or their brother, if they have the
same last name, or if you find out through your screening that they're related. I'm sorry, that is a non
starter for me. I need another reference. Do you have another reference that I can have you vouch for or
vouch for your character that isn't related? And it says right on my website, in my tenant screening
requirements, I want non related references. 2s Okay, some people will say, okay, well, here's my best
friend's and sometimes that happens. But keep in mind if you're painting a picture of the entire story of
this potential tenant and they've got a fake ID, which would automatically be a deal breaker for me. But if
they've got a fake ID or their ID is expired if they are having a hard time providing you a pay stub or a
current pay stub. If their credit is they've got an eleven month old dog. You can start to see, if you paint
the entire picture, that this potential tenant is not a very good fit based on other applicants who might
have glowing references. They've got great income verification, they've got a credit for you, credit score
for you. You can start to see as you're comparing apples to apples on qualified tenants. Who is most
qualified? Who is going to fit the unit the best based on the application. So I'm hoping that if you're
screening your tenants and you email them back saying, look, in order to move forward, I need your ID,
your pay stub, your job offer that's bringing you to town, for example. Anything else? 1s I need this to
move forward. 1s At some point, you're going to get a potential tenant who's going to provide all those
things for you, that you're going to be able to find an applicant that is going to work for the unit. It's
going to meet all your criteria that you've published. It's going to be a good fit. And it's that point where
you need to or your manager, whoever you're doing now, remember, I'm self managing, so I'm doing this.
You want to then pick up the phone. To move forward, you're going to schedule an interview. So the first
part in tenant screening is making sure that you've published the screening requirements. The second part
is making sure that you're reviewing the applications and checking the references. You need to know
what information is. And then the third item is, are they fully qualified? If yes, then how do you move
forward? And how do you move forward when they're fully qualified means they don't have any red
flags. They have no deal breakers. And then when you interview them, you confirm their application
details. Literally, I'll walk down and go or I'll walk through the application and say, I understand you're
currently living here. I talked to your landlord. You're shifting because their family is moving in. And I
let them do a lot of talking, but I'm verifying, right, you have a dog. Tell me about your doggie. What's
the doggie's name? Of course they're in love with their doggie. So you want to be in love with their
doggie too, which is kind of fun. And you confirm their application details, but ultimately you will say,
we need to move forward. How we move forward is we've decided that this is a good fit. We want to rent
to. 1s I'm anticipating the lease start date would be this day. Does that work for you? If they say no, we
want to start in two months. Okay, well, that doesn't work for me. I don't want to let the unit sit for that
long. I hope that makes sense. But what you can do is you can explain the security deposit, the pet
damage, deposit any of the deposits. Sometimes some states and some provinces allow you to do a first
and or last month's rent, talk your way through how you would actually do this, and then talk about your
lease details. When does your lease start? How do you want to sign your lease? Do you want me to have
it printed at Staples or Office Max nearby? Do you want to sign it in person with a manager? Are you
okay with signing it electronically, like on DocuSign or PDF filler, something like that. An online
program that would allow you to sign it electronically. And then to move in, we need lease sign deposits
paid, rent paid before we give you the keys. So that's the kind of way that you would do that. So does the
unit work for them? So you've got to have your requirements published, be prepared for the application
and how to screen that application carefully. You need to go through every single thing looking for the
deal breakers and the red flags. And then how do you actually move forward with saying, we want to rent
to you? This is going to be a good fit. And then I usually send them an email and I say, welcome to the
family. Here's what we need to do. This is how much your deposits are. We'll start your lease this day. I'll
send it to you as soon as I send this email. I'll send it to you in DocuSign. And then to move in, we need
the first month's rent, deposit, lease, all that. How do you actually do it? That is the whole process for
me and most of the folks who are looking at our units. It's about 10% that actually get through to
qualification, and the units work for them. So sometimes it can be less, sometimes it can be more. But
ultimately, you want to screen out the riff raft. You want to get through the deal breakers as fast as
possible. You want to eliminate those the people that have red flags or, you know, fake items, you don't
want to deal with them at all. And even though they might look nice and appear nice, if they've got a red
flag, as far as I'm concerned, they're out of the running. So here's your call to action. Those are your three
items for tenant screening, but your call to action as a landlord, I challenge you. I want you to map out 1s
on a piece of paper or phone from the time a tenant gives you notice to depart, which hopefully they're
giving you proper notice from notice to depart all the way to the next tenant. The whole process from
notice to depart, move out, inspection the entire way. Advertisement screening, deal breakers, screening
criteria, all the way on one sheet of paper. If you can't do that on one sheet of paper, you've got some
holes. And not only are you confused, your potential tenants are going to be confused. As a landlord, you
must know your process as well as you possibly can. There you go. Number one thing you've got to do as
a landlord is screen your tenants. Most important thing. Next episode, what you can expect from your
landlord for maintenance. As a tenant, what kind of maintenance action can you expect from your
landlord? That's your lesson for today. Thanks for joining me. We'll see you next time. Thank you for
joining us this week. To view the complete show notes and all the links mentioned in today's episode,
visit our website@www.mylifeysolandlord.com. If you're looking for educational resources for getting
into real estate investing, becoming a landlord, or even a better tenant, then I have a page on my website
to get you started looking for a solution to the pickle that you're in. I have suggestions for that, too. You
can throw your situation on my Facebook group, My Life is a Landlord, and let our community help you
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Jennifer Salisbury, in this episode of My Life as a Landlord. I'll see you next time.