Your primary focus is to validate the information the tenant gives you and attempt to identify any disparity. If you come across such issues, it’s usually a sign you should pass on that tenant. Below, I have provided you with a 10 step screening process that should yield significant results if applied correctly.
Step 1: Pre-Screen Over the Phone
Don’t invite a tenant out if he or she doesn’t meet your standards; it is a waste of everyone’s time. Instead, use the first call when the tenant calls to book a visit as part of your first screening opportunity. Items to cover include:
- What’s your ideal move-in date? If they wish to move in too fast, it could be a red flag. Ask why here for the time given, as the tenant may have a valid reason. Conversely, this may be a sign that the tenant is being evicted.
- What’s your budget? Can the prospective tenant afford the advertised rent and mentally note if they can afford it if it needs to go up?
- Have you looked at other rentals and what attracts you to this location? Is this a temporary move or more long term? Do you have previous landlord references? You’ll be looking for those references later.
- What do you do for a living? You will be stalking the tenant online afterwards and calling references accordingly however it is a good question to ask should this information be out of date. This is a good way to validate if they’re being honest. While this could be a red flag, they could also be on the level.
- No one likes being interrogated on the phone so sparse these questions throughout the phone call with the tenant. Also, ask if they have a bit of time to talk about the property before going through what you need to; this will help manage their expectations regarding this process taking a bit of time and just a nicer preposition process.
Step 2: Send the Tenant an Application Form
Ask for an email address to send further detail to during the phone conversation and this will help when looking at your tenant’s online profile to ensure you are looking at the correct profile for someone with a common name and work profile.
Here is the information you’ll want to collect on the tenant:
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Personal information to identify them: full legal name, current address, phone and email address, and date of birth.
- Residential history: landlord’s contact information and previous home addresses for the last 5 years, for example.
- Employment history: current position or accepted position, name of the position, supervisor contact information, and income.
- Financials: does the person have debt and if the tenant consents to you checking their credit to verify their financial integrity.
- Emergency contact information: next of kin is useful in case they crossed the rainbow bridge.
- Make sure your application form includes a section where you can receive express consent to run the checks needed, especially for credit history.
- Some tenants prefer to wait until the visit to fill out the application form. That’s understandable as it’s filled with personal information; don’t consider that a red flag.
- A tenant that arrives with a completed application form is a good sign as they’re motivated to get the rental. This is usually the case for renters seeking rare units in tough rental markets, including commercial premises.
Step 3: Look at the Tenant’s Online Footprint
Before the visit, spend a few minutes looking for the tenant online and on social media platforms, and see if the answers you receive marry up to what they say on site.
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Google: They may have been mentioned in news articles.
- LinkedIn: Keep in mind that if you’re logged into your account, they’ll see you looking at their profile unless you select the hide profile feature. This is where you can validate their employer and sometimes see who their supervisor is.
- Facebook: All you’re looking for is for signs that they’ll be noisy tenants. You shouldn’t screen a tenant if he or she has hobbies you find strange. Their life is not your life.
- Instagram: A platform mostly popular with millennials and younger generations, but unlikely to give you many practical details.
If you’re not technically savvy, you can use a free service like pipl.com. However, if you are, you can take advantage of web scraping for personal information by only using email addresses or phone numbers.
Step 4: Talk to the Tenant During the Property Visit
So far so good, everything checks out and you invite the tenant for a viewing. You can use this opportunity now to slip in a few more screening questions.
Try using open-ended questions as this will stop single sentence replies and allow further additional questions to be asked. These types of questions can get the tenant talking instead of you.
For example, you can ask questions that start like “tell me about your job..”, instead of “where do you work”.
Here are a few more topics to cover during the showing:
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Who else will be living with the potential tenant?
- The types of pets the tenant is bringing, perhaps they have brought them to the viewing, assess them. Is your property pet proof for it. Do they have friends that will bring their pets around during a social session?
- Discuss the smoking policy of the building. Passively smell the person and check their eyes and face. If there is no scent, are the eyes red and their skin, teeth, nails yellowed. Are there smoking stains on the teeth, is their skin ‘leathered’? Are they carrying items in their pockets that look like cigarettes? If you walk them to their car, check out the state of the interior. Are there cigarette butts or signs of tobacco, etc?
- Discuss the noise policy or any other by-law that may affect the tenant’s enjoyment of the rental, including leaf burning, etc.
- The visit is also a good time to clarify any ambiguity between what the tenant told you over the phone and what you found online and what they have put on the application form.
You can also screen tenants by analysing the behaviour during the visit. Here are a few points:
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Was the tenant on time?
- The cleanliness of their car?
- Does the tenant present themselves well?
- Does the tenant close closet doors after looking into them?
- Did the tenant turn off the lights leaving the room if they saw you turning them on entering but ‘forgot to’ when leaving first?
- Did the tenant comment on how clean the unit is? This is a good way of assessing manners and how good your cleaning contractors are at the same time.
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Remember, your tenant’s focus is on visiting the apartment and not necessarily answering your questions. Up to now, you have kept things informal as possible. If you get partial answers, circle back later and cover the question when the visit ends, or the situation arises.
Step 5: Ask for the Tenant’s Photo IDs During the Property Showing
Prior to the visit, remind the tenant to bring a valid photo ID; ideally two pieces. Then, during the visit, ask to see the ID. This is a crucial step in preventing fraudulent applications.
Keep in mind that not all tenants have driver’s licenses. The following can be used for validating someone’s identity:
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Health cards.
- Permanent resident or refugee cards.
- Certificate of status cards.
- Nexus cards.
- Passports.
If you’re dealing with new immigrants to Canada, they may not have federally or provincially issued ID but will have something.
Step 6: Verify Employer Information
When it’s time to call references, verify the contact information yourself. What you found online does not count and can be fraudulent.
For white-collar jobs, you can open LinkedIn, find the supervisor and call them directly through the contact information found there.
For blue-collar jobs, it can get a bit more complicated as not all industries lend themselves well to LinkedIn. In those cases, you can Google or find the business in the Yellow Pages. Call the receptionist and ask to speak to the tenant’s supervisor; ensure you mention that it’s for a rental reference check.
Your intention is to see if the tenant is an employee of the people they said. Stick with the bare minimum questions here, you’re disrupting people at work and being pushy with a supervisor could cause problems with the tenant.
Step 7: Contact the Previous Property Manager for References
Just as you checked the employer references, find the contact information of the previous property manager yourself and see if everything still holds water. If the tenant lived in a large property, the number provided should be easily searchable. If not, you can contact your real estate agent or real estate lawyer. They can run checks in the land registry of the tenant’s current and previous addresses, or you could do this yourself as it should be easily requestable.
Step 8: Check Your Local Landlord Association
Most provincial or city-specific landlord associations have tenant screening services, and will probably save you some money as they are geared up to do this. They can check to see if the tenant was ever reported by the previous property manager as a liability.
Step 9: Conduct Legal Credit Checks
Never use a credit report provided by a tenant; always get your own data. This part of the process requires the tenant’s permission, luckily thanks to your application form, you should have this now. You cannot perform a credit check on someone without their consent.
Running credit checks online is easy, and you can use the following or similar sites:
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Equifax’s online website.
- Certn.co: a new service that uses artificial intelligence (AI) to screen tenants based on hundreds of datasets.
- TenantVerification.ca: a professional tenant screening service.
Here is what you are looking for in a credit report:
Total debts will affect how much income the individual will lose repaying debts. Remember, tenants will pay debts, buy food, pay utilities and pay rent with what’s left, and don’t forget transportation.
Debts that went to collection; a sign that the tenant has troubles meeting financial obligations. A tenant doesn’t need to have a credit score of 775 to be considered reliable. Not all great tenants have pristine credit and it is not a red card. Using credit score as a screening criterion may make you pass up on potentially great tenants, so be mindful.
Frankly, you should avoid using the credit score solely for screening purposes. Look at all the data you collected so far and come to a conclusion based on context. The screening process should identify if the tenant is a reliable employee, a good tenant, and some sort of reasonable financial discipline to pay you those sweet bills.
Step 10: The Tenant’s Rent Affordability
With a pay stub validated through the employer reference check and the credit report, you can deduce whether the tenant can afford the unit or not.
Run the tenant affordability screening check.; this involves multiplying rent by 3 and if your tenant doesn’t meet that monthly threshold, paying rent on time may be difficult.
Where a couple is renting the unit together, calculate affordability based on one salary. If one gets fired, can they still afford to live in your property? Where a couple wouldn’t be able to afford rent on one salary, use your judgement.
If they’re renting in an expensive marketplace that no single person could afford, give some leniency. Additionally, if you found out that they’ve been working at a company for 5 years or longer; it’s unlikely they’ll lose their jobs
