Hignell Property Management Blog

7 Questions to Ask During the Renter Screening Process

Written by Hignell Property Management Team | April 22, 2020

When a vacancy arises in a rental property, professional property managers (or property owners who have chosen to go it alone) are tasked with the responsibility of replacing the lost resident –quickly, if they are to minimize the disruption to the investment property’s monthly cash flow.

However, while maximizing a property’s income, and thus profit, is typically the primary objective of owning an investment property, the rental screening process used to vet potential renters/residents must be consistent for each applicant (to avoid even a modicum of discriminatory behavior) and, must remain compliant with federal Fair Housing laws.

To ensure compliance (and the avoidance of what can result in some hefty penalties and fines), property owners/managers are advised to develop and follow a well-defined resident-screening process that should include, at a bare minimum:

  • A complete signed rental application that provides the applicant’s personal data, including employment and rental history information.
  • An authorization to run a comprehensive credit report.
  • An authorization to run a criminal history background check and any relevant documents related to the specific rental property.
The renter screening process should include a number of inquiries and questions designed to help the interviewer evaluate the likelihood of a potential renter:
  • Making monthly rental payments on time.
  • Not damaging the rental unit.
  • Abiding by the terms of the rental unit’s lease agreement.

Following are the essential rental screening process questions to ask.

What is the reason for your current move?

Ideally, a property manager or owner wants to fill the rental unit's vacancy with a resident that is moving for legitimate reasons, including a new job offer or the need for a larger home.

How long did you live in your previous rental?

As most seasoned property managers and investment property owners know, the ideal resident will have a history of moving infrequently and will be amenable to signing a yearlong lease if that is in the property owner's best interest.

When can you move into the unit?

A resident who wishes to move in yesterday, so to speak, may seem ideal; however, most lease agreements typically require 30 days' notice, and most responsible adults begin their rental search in advance of their expected move.

A potential resident looking to move immediately may indicate that this applicant’s review process be ultra-cautious; perhaps this applicant is currently being evicted. However, there are legitimate, albeit unusual scenarios where a quick move is warranted – like a job transfer, a pay cut, or sadly, a situation related to a disagreement with a roommate.

What is your annual/monthly income? 

Each property manager or owner will determine the amount of income required to qualify for a particular rental unit. While a wide variety of schools of thought exist, a general rule of thumb is that the proposed rental payment should fall between 30 and 40% of the total household income.

Here's an example – if the rental fee of a vacant unit is $1,000 per month and the applicants’ yearly income is $40,000, would they qualify to rent the unit, given the above rule of thumb guideline? The calculations are as follows –

  1. First calculate monthly income - $40,000/12 = $3,333.33.
  2. Calculate ratio of rent to monthly income - $1,000/$3,333 = .3 or 30%. The applicant meets the income requirements for this unit.

Note, however, that it's also important to consider the applicant’s amount of debt (independent of their monthly rental obligation). This is because an applicant with excessive debt – in terms of car or student loans, credit cards, etc.. may appear to be qualified in terms of rental payments but be unqualified based on their existing monthly obligations. An applicant’s debt load is disclosed on a credit report.

Will the property manager of your previous location and/or employer be willing to provide a reference?

References are an essential part of any rental screening process, and potential residents who balk or make an excuse as to why references are not available should be considered suspect. References speak not only to one's employment status and income but to their character and dependability, among other important aspects.

Do you have the funds required to meet the first month's rent and the security deposit?

A security deposit acts as protection for the property manager/owner, and it is critical that potential residents meet this requirement, without exception, in case they become a problem-resident or cause damage to the unit.

Do you have or want pets?

Be certain to include the property's pet policies in writing, have the applicant sign, and, therefore, acknowledge that they have understood the notice and are willing to comply with the pet policy.

In addition to the above questions, be a conscious listener, hear what is said and what is not said during the interview. Before the interview concludes, ask the applicant if they have any questions. You will be fascinated by the tremendous amount of information that can be acquired by allowing others to simply ask questions that reference their concerns and interests.

Screening potential renters can take up a lot of your time. Consider hiring a property management company to do the work for you so that you can have peace of mind knowing the details are handled and residents are satisfied and well cared for.