Tenant Screening Process: How to Find the Best Tenants

8 minutes

Tenant Screening Process

Are you a landlord or property manager looking to find the perfect tenants for your rental property? The key to a successful and stress-free renting experience begins with a thorough tenant screening process.

Finding the best tenants is the key to maintaining a harmonious landlord-tenant relationship and ensuring your property is well-maintained.

This blog post will guide you through the step-by-step process of tenant screening, equipping you with the knowledge and tools to identify reliable and responsible tenants. Let’s dive in!

Why is tenant screening so important?

Tenant screening is like doing your homework before choosing the right tenant. Just like you would check the references and qualifications of a job applicant, you want to know more about the people who want to live in your house.

With a good tenant screening process, you can find out crucial information about prospects. You can check their financial history, past behaviours, and rental history to be sure that you have a reliable tenant for your property.

But it’s not just about your property—it’s also about safety. Tenant screening helps you identify if someone has a criminal record or has been involved in illegal activities. This way, you can create a secure living environment for your tenants and minimise any risks.

In addition to these reasons, tenant screening also helps you follow the law. There are fair housing laws that protect people from discrimination based on race, religion, gender, or other factors. By using a screening process, you can show that you are choosing tenants based on objective criteria, ensuring that you treat everyone fairly and equally.

How to find the right tenant for your rental property

A picture of a man holding a key in front of a house. Tenant screening

When it comes to finding the right tenant for your property, it’s important to distinguish between good and bad renters. This is where tenant screening comes in.

As a landlord, you may encounter numerous applicants for your rental property. However, you shouldn’t rush and make hasty decisions based on the first caller or the highest rent offer. Take your time and filter through each applicant to be sure that you are getting the best.

To properly screen a prospective client, follow these steps:

Important steps in tenant screening

  1. Establish your tenant criteria
  2. Collecting information from applicants
  3. Conduct background and credit checks
  4. Conduct tenant interview
  5. Make a decision

1. Establish your tenant criteria:

Before you rent your property, you should establish what exactly you want in your ideal tenant. What are your negotiables and non-negotiables?

You need to set clear guidelines and standards that prospective tenants must meet to be considered for tenancy. By establishing tenant criteria, you are sure to attract responsible and reliable tenants who are likely to pay rent on time, take care of the property, and comply with the terms of the lease agreement.

Here are some important steps to follow when establishing tenant criteria:

  •  Think about factors such as income level, employment status, credit history, rental history, and lifestyle preferences. This will help you create a profile of the ideal tenant for your property.
  • Determine the minimum income level or income-to-rent ratio that prospective tenants should meet. This helps ensure that tenants have the financial means to afford the rent and other expenses associated with the property.
  • Consider establishing criteria related to a potential tenant’s rental history. This may include a minimum number of years of renting experience, a positive rental reference from previous landlords, and no prior evictions.
  • You can include a pet clause, but it’s optional. Under the UK Housing Act 1988, landlords can refuse to rent to pet owners or require them to get rid of pets. However, a new model tenancy agreement introduced in 2021 make it easier for renters with pets. The Renters Reform Bill also aims to allow tenants to request pets, which landlords must consider with a valid reason to refuse.
  • Put it in writing: Once you have established your tenant criteria, document them in your rental application and lease agreement.

A tenant screening gif talking about Know Your Dosh Services

2. Collecting information from applicants

A standardised application form ensures that you gather consistent information from all applicants. It also makes it easier to compare and evaluate data objectively.

A standard application form should contain the following:

  • Personal information: Full name, date of birth, current address, phone number, and email address.
  • Employment and income details: Current employer’s name and address, job title, length of employment, and monthly income.
  • Rental history: Previous rental addresses, landlord or property manager’s contact information, duration of the tenancy, the reason for leaving, and rental payment history.
  • References: Contact information for personal references who can vouch for the applicant’s character and reliability.
  • Financial information: Bank account details, and credit history.
  • Pets and additional occupants: Any pets or additional occupants who will be living with the applicant.
  • Authorization and consent: Clause granting permission to conduct background checks, credit checks, and contact references.
  • Signatures: Space for both the applicant’s and landlord’s signatures to acknowledge the accuracy of the provided information.

3. Conduct background and credit checks

Woman surfing the internet

Before entering into a tenancy, there are several background checks that you can carry out on your prospective tenants.

Some of these checks are required by law, while others will help determine if the applicant will be a good tenant.

What background checks can landlords carry out on tenants?

Credit checks:

Many landlords conduct credit checks on potential tenants to assess their ability to consistently pay rent based on their credit history. You can request a credit check from a consumer credit reference agency, but you must obtain written consent from the tenant first. While there is usually a fee associated with credit checks, this is a worthwhile investment as it is a smaller cost compared to potential unpaid rent.

Reference and guarantor checks:

Landlords often verify references from previous landlords and/or the applicant’s employer. Checking landlord references helps determine the applicant’s past rental behaviour, while employer reference checks confirm their employment and income stability. In certain cases, landlords may request a guarantor who can cover the rent if the tenant cannot. Guarantors are typically relatives or close friends, preferably homeowners.

Right to rent checks:

As a landlord, you have a legal obligation to ensure that prospective tenants are legally permitted to rent a residential property in the UK. This involves conducting Right to Rent checks, and you can find detailed information about the process on the government website.

Criminal record checks:

As a Landlord, you are not legally required to carry out criminal record checks on prospective tenants. But, some insurance providers may require notification if anyone living at the property has an unspent criminal conviction. Failure to disclose a tenant’s unspent conviction could invalidate your insurance.

To ease the process, you can opt for third-party services that carry out comprehensive reference checks at a fee. Several landlord insurance policies require reference checks as a mandatory step to fulfil policy requirements and a third-party service saves you a lot of money.

4. Conduct tenant interviews:

One of the final steps to finding a tenant for your rental is conducting interviews. It allows you to gather additional information, assess the applicant’s suitability, and establish a personal connection. An interview is also an opportunity to assess the applicant’s communication skills and their ability to articulate their needs and expectations as a tenant. It allows you to gauge their compatibility with your property and the potential to establish a positive landlord-tenant relationship.

You can either schedule an in-person or virtual interview to assess the applicant’s suitability as a tenant.

Some example questions you can ask are:

  • Can you tell me a little bit about yourself?
  • What brings you to this area?
  • Why are you looking to move?

Rental history:

  • Can you provide details of your previous rental experiences?
  • How long did you live at your previous residence?
  • Can you provide the contact information of your previous landlord or property manager for reference?

Employment and income:

  • Where are you currently employed?
  • How long have you been working there?
  • Can you provide proof of income or employment verification?

Lifestyle and preferences:

  • Do you have any pets? If so, what type and how many?
  • How do you typically spend your weekends or leisure time?
  • Are you a smoker or a non-smoker?

Move-in and lease terms:

  • When are you looking to move in?
  • Do you have any questions or concerns about the lease agreement?

5. Make a decision

After you have gathered all the necessary information, conducted interviews, and performed background checks, it’s time to evaluate the applicants and make an informed decision.

To ensure the best choice, it is advisable to prioritize individuals with lower debt and higher income, a favourable rental history, a clean criminal background, a stable job situation, and higher credit scores.

Furthermore, depending on the specific criteria you wish to establish, it is worth considering applicants who do not own pets or smoke, possess fewer vehicles, and exhibit superior communication skills.

Once the most promising applications have been identified, most landlords choose the individual who submitted their application first. This widely practised approach avoids legal complications, as some applicants may claim discriminatory treatment if they were qualified but ultimately rejected due to their application being submitted later.

Once you have made a decision, promptly communicate it to the applicants. Notify the chosen tenant(s) and provide them with the necessary instructions for moving forward, such as signing the lease agreement, submitting security deposits, and arranging move-in details. Notify any applicants who were not selected in a respectful and considerate manner.

How do you reject a tenant applicant?

Woman writing an email

We recommend declining applicants in writing, preferably through email. If the unit has been rented to another applicant, you can use the following response:

“Dear Sally,

Thank you for taking the time to apply to my property at 7 Windsor Drive

After careful evaluation, we regret to inform you that another applicant has rented the unit. I wish you all the best in your search.

Regards,

Please note that you should only state that the unit is rented if it has been rented.

To ensure transparency, we recommend accepting a tenant first, confirming their commitment to the lease signing, and then rejecting all other applicants.

While you are not legally obligated to provide a reason for the rejection, it is considered professional to inform the tenant of the reason if they inquire. Failing to provide an answer may carry legal risks, as the tenant may pursue legal action to seek clarification.

If you are rejecting a tenant based on their credit score, debt, missed payments, or any credit report information, you should notify them of this reason.

Is tenant screening legal in the UK?

Yes, tenant screening is legal in the UK. Landlords have the right to conduct tenant screening as part of their due diligence in selecting suitable tenants for their rental properties.

However, It’s against the law to only check people you think are not British citizens. You must not discriminate against anyone because of where they’re from.

Do you need help managing your rental property?

“Know Your Dosh” provides a simple and easy way for landlords to manage their property portfolio. You can effortlessly manage and track your tenants, tenancies, expenses, and rent all in one place!

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Disclaimer: 

We think you should understand this blog’s strengths and limitations. We’re a financial management platform and aim to provide the best personal finance and lifestyle guidance but can’t guarantee it to be perfect, so please use the information at your discretion.

 “Know Your Dosh” can and shall not be held responsible for any outcomes derived from following general guidelines provided as informative blogs.

  • This info does not constitute financial advice, always research and consult a professional financial advisor before taking any action to ensure it is right for your specific circumstances. 
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