6 Red Flags You Can’t Miss During Tenant Screening

Tenant screening is critical to property management, acting as the gatekeeper between you and potentially costly and disruptive tenants. A reliable screening process helps ensure you select tenants who pay rent on time, treat the property respectfully, and stay long-term. However, it’s essential to recognize warning signs that might indicate potential problems. Here are six red flags you should be cautious of during the tenant screening.

Incomplete or Inaccurate Applications

An incomplete application is a common and often overlooked red flag. When prospective tenants leave sections of the application blank or provide vague information, it could indicate a lack of responsibility or intentionally withholding information. Omitting information such as employment history, previous addresses, or personal references can indicate a problematic rental history.

To avoid potential issues, applicants must complete the application completely. Additionally, they should compare their information with other sources, such as credit reports or reference checks, to verify accuracy. An applicant’s unwillingness to complete the application or discrepancies between sources should raise concerns about their reliability.

A History of Frequent Moves

A tenant who moves frequently may indicate instability. While some professions or life circumstances, such as military service or temporary contracts, can result in frequent relocations, a history of moving every few months can suggest something else. This might indicate that the tenant has been evicted multiple times, is frequently breaking leases, or has ongoing conflicts with landlords.

In tenant screening, look for tenants with stable rental histories, especially those who have lived in their previous residences for at least one year. Check their reasons for leaving each property as well. If you’re unlucky, frequent movers may cost you additional turnover expenses, potential vacancy periods, and further property damage.

Poor Credit History

Credit history is a direct reflection of a tenant’s financial responsibility. Tenants with poor credit scores may need help making payments on time or prioritizing rent in their budget. Credit reports can reveal patterns of late payments, large amounts of debt, or even recent bankruptcy filings.

While a low credit score alone may not be disqualifying, digging deeper to understand the context is essential. If the tenant can provide a valid explanation, such as unexpected medical bills or a one-time financial setback, they may still be a viable tenant. However, an ongoing pattern of unpaid bills or excessive debt could signal potential financial irresponsibility, leading to late or missed rent payments.

Inconsistent or Insufficient Income

Rent should be 30-35 % of a tenant’s gross monthly income, as spending beyond that can indicate potential financial strain. A tenant with insufficient income may need help meeting their rent obligations and covering their living expenses, increasing the risk of late or missed payments.

Income inconsistency is another factor to examine. Seasonal workers or those who rely on unpredictable income sources may need help paying rent during slower periods. When reviewing applications, ask for proof of consistent income—such as recent pay stubs, tax returns, or bank statements—and verify employment to understand their financial stability better.

A Record of Evictions or Criminal Activity

Evictions are a significant red flag. A history of evictions generally signals severe issues, such as consistent non-payment, lease violations, or severe conflicts with landlords. Any eviction history should be taken seriously, as these tenants often bring challenges that can lead to financial loss and disruptions to the property.

Likewise, depending on the severity and recency of offenses, a criminal record can be a red flag. While you cannot discriminate based on arrests alone, convictions should be carefully considered, especially for serious offenses such as property damage, theft, or violent crimes. Criminal records must be reviewed carefully to comply with Fair Housing laws, which protect against discrimination. An applicant’s criminal history can be evaluated based on the nature of the crime, its relevance to the safety of the property, and how long ago it occurred.

Negative References from Previous Landlords

Landlord references are a valuable source of information about a tenant’s rental history and behavior. Contact prior landlords listed on the application and inquire about the tenant’s payment history, adherence to lease terms, property maintenance, and whether they would rent to the tenant again.

Beware of applicants who provide references from friends or family instead of genuine landlords, as these individuals may need to provide more accurate information. Confirm the contact information to ensure you speak to actual landlords rather than friends posing as landlords. Negative feedback should be given significant weight in your decision-making process, especially around issues like late payments, property damage, or failure to comply with lease terms.

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A solid tenant screening process not only protects your investment but also provides a stable rental experience, relieving you from potential future issues. By carefully reviewing applications, verifying income, checking credit and criminal history, and consulting with previous landlords, you can confidently create the foundation for a positive rental relationship.

Thorough screening minimizes the likelihood of ending up with high-risk tenants, giving you a sense of control over your property. Take your time with the process; invest the time to scrutinize each applicant. This diligence ultimately pays off by reducing the risks and ensuring a successful tenancy that benefits both you and the tenant.

The Rent Portland Homes / 4 Rent Local Team will save you the time and hassle of tenant screening yourself. Learn more about the services that we can offer you by calling us at (503) 646-9664 or click here to connect with us online.