Here's the process that we use here at New Heights Property Management to screen tenants.
An applicant comes to us - First thing we do is run a credit check. We want to make sure that they don't have any delinquencies to other landlords. We want to make sure that they have a decent credit score. We want to make sure that they've been paying their utility bills and other things like that. Those are very important to us cuz that tells us what their payment history has been. We also want to look at their income and make sure that they make at least three times the amount of income every month as what we're expecting them to pay in rent. If they don't have that 3 to 1 ratio of income then we ask them to provide us with documentation that they might have cash reserves in a savings account or other account that they could draw from in the event that they needed to make rent payments. If they don't have either of those things then they're probably not going to be a tenant that we would qualify and approve.
The last thing that we look at is we look at criminal history. And we have to be careful when we look at criminal history for prospective tenants because we have to follow HUD’s guidance on these matters. Basically what the Department of Housing and Urban Development tells us is that we can only deny an applicant if their criminal history has something to do with housing or would be something that could impact them being a tenant. So for example if somebody has a felony conviction for passing bad checks maybe we wouldn't want to rely on them to give us a good check every month as a tenant. Or if they have a felony conviction for arson we could be concerned that they might burn our house down and therefore we might not want to invite them to be a tenant in our property.
So those are the things that we use when we screen tenant. What we have found is that by screening tenants in this way, we put the best possible folks into our rental properties, which gives us the best possible outcome in the long term. Is it 100% foolproof? No, because nothing ever is. But we certainly feel that we have a very high success rate with the applicants that come in to us. We have a very low eviction rate or rate where we have to put people out of houses because they haven't been paying and that's because we're confident in the way that we screen tenant and we try to put the ask people in our rental properties.