Tenant screening is a crucial part of managing a rental property. But do you worry you’ll fall foul of the Fair Housing Act? These concerns could make landlords anxious about asking vital questions when finding a tenant.
Figures released by the White House show that the eviction rate in 2022 was 14%. This shows why it’s important to ask the right tenant screening questions to find people who will pay and stay.
Let’s take a look at three questions that are both lawful and essential for tenant screening.
1. Can I View Your Credit Report?
Viewing a potential tenant’s credit report is a vital piece of the puzzle. If a person has a poor credit history, it means that they are a higher-risk tenant. It shows that they have difficulties with money management and may not be able to pay their monthly rent reliably.
The report will include a headline credit score. This is useful, but as a landlord, you should dig a little deeper. You should also check for:
- Payment gaps
- Late payments
- Significant levels of debt
- Collection accounts and judgments (including repossessions and bankruptcy)
In California, landlords are entitled to access credit reports under Cal. Civ. Code ยง 1950.6. However, California law also allows individuals to freeze access to their credit reports. In these cases, the tenant will need to grant you access or unfreeze access to allow you to see the report.
2. Can I See Proof of Income?
Proof of employment, self-employed income, or retirement income is vital to ensure the tenant can afford the rent. A 3:1 ratio of income to rent is the industry standard, but this can vary depending on where your rental is located. A local property manager can advise you on the right level for your locality.
Some acceptable forms of proof of income include:
- Dated pay stubs from the last few months
- W2 tax form – shows income received over the last year
- Bank statements for self-employed applicants and retirees
3. What Is Your Rental History?
Before signing a rental agreement with a new tenant, you need to know their rental history. It’s good to obtain it in two ways – through the credit report/background checks and through the rental application.
On a rental application, the potential tenant should provide a full breakdown of their rental history. If they leave gaps or it doesn’t match the background checks, that could be a red flag.
In the worst-case scenario, they could be trying to hide evictions or criminal activity. Thorough background checks can help to set your mind at rest before you sign on the dotted line.
Crucial Tenant Screening Questions
These tenant screening questions will give you a much better chance of finding tenants who will pay and stay. But if the whole process of marketing your rental and tenant screening is overwhelming, talk to the team at Outland Real Estate.
Our property managers can take care of the whole process. They’ll help you find the right tenants and follow all applicable state and federal fair housing laws. Contact us today to learn more about how we can help.