Employment / Income
The most important piece is to verify employment. Many companies make it difficult to do this. They cannot directly say no (I suspect it is required by law), but they will give you a website to subscribe to, ask you to send them a fax, or give you an 800 number to call. You will likely have to pay for the verification. In the end, the hassle and the cost deter many landlords from doing employment verification.
If you want to do it yourself, the best method is to just ask the applicant to provide recent pay stubs or tax returns. Sometimes a bank statement also works, as long as you can see a employer direct deposit. If after seeing their documents you are still not sure, then try to contact their employer. Also, look out for fraud. It is very easy to download a bank statement / paystub template online these days. It can easily fool you.
If you are worried about the hassle and fraud risk, a good way is to outsource employment/income verification to companies that specialize in the niche. Tenantify is a perfect example of providing a verification layer to rental transactions.
The use of a credit report is another excellent method to see if someone is responsible with their personal finance. However, you need to be mindful of the fact that traditionally people with perfect credit can qualify for a loan and may not be a long term renter. Or more likely you might not find that person with good credit score who wants to rent your home. There is also a large group of people that went through a foreclosure or short-sale and their credit scores are bad but do not have any other debts. It is best to look through the full credit report instead of the pure score.
There are many nationwide searches on criminal history, but you have to be careful when you are screening applicants with common names like Smith or Jones. Best approach is to try to limit the search to just a state or county. Also, be mindful that a person with no criminal past is not a sufficient indicator of good tenant, so always use it as a supplemental check.
An eviction is the most important thing you as a landlord should look for in screening a tenant. If someone is being evicted, they are usually out looking for a place to rent. They likely will say, I have to be out by the weekend or I have 2 weeks to move. That’s a red flag, so be very careful.
A current landlord reference, in my opinion, is the least reliable method. The landlord typically has an incentive to get rid of problematic tenants, so he/she will only say good words to speed up the process. If you can get to a previous landlord, not the current landlord, then those references will be much more reliable.
One More Trick
One last tip that a landlord can use is to drop in on the applicant unannounced (or announced) to see the condition they keep their current residence. If they trashed the property where they currently live, they will surely trash yours. You probably need a good excuse to do so. For example, you want to stop by to collect the application form as quick as possible, etc.
How Tenantify can help?
Tenantify empowers landlords to make informed decisions by verifying tenant’s employment and income. Tenantify is different from a traditional tenant screening service, as we focus on tenant’s current financial situation and assess tenant’s ability to make monthly rent payment. It should not replace the traditional credit check, but we believe that employment / income verification is superior because it reveals tenant’s current (rather than past) ability to pay.