Tenant screening is an extremely useful tool for landlords. This process ensures that renters will behave and treat your properties in the way you expect. In other words, screening allows you to avoid bad tenants and find good ones, and in doing so, landlords can reduce turnover and minimize or eliminate evictions.

Reducing evictions is extremely important- evicting a tenant can cost anywhere from $3,500 to $10,000 and takes up valuable time. However, when scanning through potential candidates, it may be difficult to discern who is a quality tenant and who is not. Designing a tenant scoring system is one way to quickly, easily and objectively evaluate each applicant.

Tenant scoring systems allow landlords to assign points to good traits or criteria in a potential tenant. For each positive criteria an applicant has, they get a point on a pre-determined checklist. The best applicant for you is the one who has the most points at the end of the process. When stuck between numerous seemingly competent candidates, tenant scoring systems provide a method of quickly seeing which one may be better suited to occupy that vacancy.

To create your own tenant scoring system, you should:

  1. Decide on the requirements an applicant must meet to qualify for a unit,
  2. Create a comprehensive scoring sheet,
  3. And potentially have an attorney review your scoring system.

Using these steps, you will be placing quality tenants into your properties in no time.

1. Decide on the Requirements an Applicant Must Meet to Qualify for a Unit

To create your tenant scoring system, you must first sit down and map out the minimum requirements your tenants must meet to qualify for housing. Ask yourself: what are my non-negotiables? What traits should every tenant have to ensure they remain a “good” tenant? Some things to consider when choosing the right tenant could be:

  • Do they have sufficient income?
  • Do they have proven, consistent employment?
  • Are there any red flags in their credit history?

You should also consider their criminal and rental history. However, when looking over a tenant’s criminal background, be sure to never automatically rule someone out over a prior arrest. This is illegal. Also, keep in mind the severity of the crime and when it took place. One petty crime from years ago does not mean that your tenant will cause problems in the future.

2. Create a Comprehensive Scoring Sheet

Once you have chosen what minimum requirements your tenants must meet, organize these criteria into a checklist. Compare your applicant’s screening reports and information with your scoring sheet, then check-off each requirement they meet. For each box you check, the applicant receives a point.

Keep this scoring sheet for your records: in the event that a tenant claims discrimination, you have proof of a decision-making method that maintained objectivity and fairness.

3. Bonus: Have an Attorney Look Over your Tenant Scoring System

It is important to make sure that you are covered in case of a fair housing lawsuit. To double check that you are adhering to these laws, you may opt to have an attorney who is familiar with the regulations in your state look over your scoring system. In doing so, you can be sure that you are not violating any federal or state fair housing laws.

Things to Keep in Mind

When applying your tenant scoring system, you must ensure that you give each applicant the same opportunity to housing. In doing so, you are adhering to the federal Fair Housing Act and avoiding costly mistakes. According to this law, it is illegal to refuse housing due to a tenant’s:

  • Race
  • Color
  • Religion
  • National Origin
  • Sex
  • Disability
  • Familial Status

You can legally decline applicants who have proven that they consistently make late rent payments, have insufficient income, or do not have good credit. However, never assume a renter doesn’t have enough income to qualify before conducting a tenant screening report: make sure you tell each potential tenant about each vacancy you have.

Conclusion

Screening potential tenants is extremely important and requires you to put in some serious time and thought. However, putting in the work up front ensures that you do not waste time in the future. Using a tenant scoring system makes evaluating potential tenants quick, but it also saves you from the potential time wasted in lengthy and expensive legal battles.