How to Screen a Potential Tenant

There’s no doubt that owning a rental property can be a lucrative endeavor. However, it also comes with a lot of work and decisions to make. One of the most crucial decisions for any rental property investor, whether it’s their first property or fifteenth, is who will occupy the home. Making the wrong decision could cost you money and time. In this article on how to screen a potential tenant, we’ll help you understand what goes into making the right choice.

What to look for in a potential tenant

The screening process is intended to assess risk. These factors are similar to the ones your lender used to approve you for a mortgage. Although you can set your parameters, you must establish minimum requirements to safeguard your financial health.

Criteria any potential tenant should meet

Here are some examples of factors to take into consideration when deciding whether or not to rent to a particular candidate:

• Minimum credit score—You can decide what that score should be. Many times, it will depend on how much you’ll be charging for the property. Not having a 750 credit score doesn’t necessarily mean your prospective tenant won’t pay their rent. But an extremely low score indicates they’ve had some issues paying bills.
• Proof of employment—Unless the person applying to rent the home is independently wealthy, they’ll need a job to pay the rent. While it’s easy to trust that a person works where they say they do, proof of employment is a must. 
• Ability to pay a deposit and first month’s rent—This probably seems obvious, but you’ll need to be sure they can pay before they sign a lease. Ask for a recent bank statement or wait until a check clears before handing over the keys. 
• Clear background checks—Too often overlooked, particularly by first-time landlords. Many rental property owners follow their instincts based on a potential tenant’s impression of them. And yes, background checks can be expensive, but understanding a prospective tenant’s background can help ensure a safe and stable rental arrangement. A minor misdemeanor from someone’s past shouldn’t immediately disqualify them. However, renting to someone with a history of crime or domestic issues should be carefully considered.

It’s perfectly acceptable to be flexible with specific criteria, as long as your decisions remain consistent and comply with all federal, state, and local fair housing laws. If an applicant has a low credit score but meets other requirements, you might consider requesting a co-signer to help mitigate risk while offering them an opportunity to rent.

Red flags

These red flags can prompt follow-up conversations with the potential tenant.

• Unstable employment history—Even if a person has proof of current employment, it doesn’t mean it’ll stay that way. While employment stability is preferred, it’s important to assess non-traditional employment (freelancers, contractors) based on income consistency. In the same way an employer would question a candidate with gaps in their resume, or too many jobs in a short time, you should too.
• Evictions—Prior evictions can signal rental instability, so it’s essential to investigate the circumstances. An eviction doesn’t always tell the whole story—job loss, medical issues, or other hardships can sometimes lead to past housing problems. Ask follow-up questions to understand what happened and whether the issue has been resolved. If everything else checks out, and the tenant is transparent about their past, it may be worth considering their application.
• Bankruptcy—There are several reasons a person may file for bankruptcy. The cause and timeframe should be factors of consideration. Either way, someone with a bankruptcy in their past should be looked at very carefully before being allowed to rent your property. A recent bankruptcy isn’t always a dealbreaker if the tenant has steady income and meets your other criteria.
• Criminal history—Recent history of violent or property-related offenses may indicate risk. Still, it’s important to evaluate each situation on a case-by-case basis, considering the severity and recency of the offense. However, if you feel sufficient time has passed, a person with a criminal history could be considered. Just be sure to proceed with caution.

These red flags may warrant a conversation with the potential tenant to understand their circumstances better. You might be able to forgive an unreported error on their credit report, a stolen identity, or, as common as the adverse effects of COVID-19. 

The prospective tenant may have had a difficult life, but is now on track. You must decide if you are willing to take a chance on them.

Legalities and responsibilities

As a landlord, you have legal and ethical responsibilities during the vetting process. Let’s discuss a few of those:

State and local laws

Familiarize yourself with state and local landlord-tenant laws, including anti-discrimination regulations and renter protections. In several states, landlords cannot refuse to rent to victims of domestic violence.

Additionally, security deposits may be limited by law. Some states require that a landlord charge no more than 1.5 times the monthly rent. 

Fair Housing Act

The Fair Housing Act prohibits discrimination based on race, color, religion, sex, national origin, familial status, or disability. It’s illegal to refuse to rent, misrepresent availability, or offer tenants unequal terms based on these protected characteristics. You also can’t lie about the property’s availability, change rental terms or conditions, offer less-appealing amenities, or delay maintenance repairs to evict tenants based on these characteristics.

Steps to screening a potential tenant

These steps will act as a guide for you in choosing the right tenant for your situation.

Establish minimum criteria

First, you’ll need to determine your minimum criteria for potential tenants based on what we discussed above. You should also determine what you’ll require regarding credit score, finances, employment, and background checks before you start taking applications.  

Lifestyle should also be considered. Will you rent to smokers, or allow pets? If so, will you require your tenants to smoke outside, and what types and sizes of pets will you allow? If you’re unsure, look at similar rental properties in your area. See what other rental property owners around you are allowing to help you decide.

Create a detailed listing

A detailed listing can help a renter decide if the property is suitable for them and if they would be a good candidate. It also sets expectations before you meet the tenants.

By including this information in the rental listing, you can filter out tenants who do not fit your criteria or are unwilling to comply with your policies. 

Include the following details:

• Monthly rent
• Deposit amount
• Any application fee
• Specify that a background check will be required
• Reference requirements
• Smoking and pet policies

Quality listings are a great way to attract qualified applicants that meet your specific requirements.

Collect applications, review, and get consent

Ask for applications from people who are interested in renting your property. This will allow you to learn more about potential tenants and run background and credit checks. You should include the following information in your application:

• Name, contact information, date of birth, license number, and Social Security number of the applicant
• Addresses of the applicant in the past
• Names of any other occupants (roommates, children, etc.)
• Information about income and employment
• Contact information for personal referees
• Additional screening questions regarding pets, past evictions, moving reasons, etc.

Select the tenants that you would like to screen from the applications. You must first get the consent of prospective tenants to pull their credit report or run background checks. You must get their consent in writing and keep a record.

Perform a credit check and criminal background check

Credit check

You should look beyond your credit score when running a credit report, and make sure to verify the following information:

• The applicant provided you with the correct name, date, and past addresses.
• They don’t have any past or current financial problems, including missed or late payments, bankruptcy, or excessive debt.

There are three options depending on the information in your credit report. You can either go ahead with the tenant, consider leasing to them with higher deposits and co-signers, or deny them. You might ask the tenant to clarify any discrepancies that you notice.

Background check

A criminal background check can help you identify if the potential tenant may be a risk to your property or neighborhood. This background check can help protect your property and community by identifying any serious past offenses. It will uncover any felonies or misdemeanors and eviction records.

Again, it is up to you to determine if there are situations in which you can still proceed with a tenant with a criminal record. You should consider each case individually. It is a good idea to ask the tenant for details and consider the crime’s severity and the time frame.

Identify your new tenant and sign the lease

Once you have a list of potential tenants and run background checks on them, you can make an informed decision. If your first choice is unavailable, you may choose to have a second or third choice. Once you have decided on the tenant, it is important to notify them immediately and arrange a time for them to sign the lease.

 You should always consult a local lawyer to create and review a lease agreement with you.

Key takeaways

Screening tenants isn’t just a checklist—it’s a critical process that affects your rental income, property condition, and long-term success. One wrong decision can lead to months of missed payments, costly repairs, or legal complications. That’s why smart landlords across Raleigh, Wilmington, Cary, Durham, and throughout the Triangle trust the experts to get it right.

At Turnkey Property Management, we take the guesswork out of tenant screening. From verifying employment and running background checks to drafting legally sound leases, we handle every step with precision, so you don’t have to. Whether you own one property or manage a growing portfolio, our team helps you protect your investment and regain your time.

Ready to find the right tenant—faster and with less stress? Schedule your free consultation with Turnkey today and take the stress out of tenant screening.key today.