Most experienced landlords will tell you it's better to have no tenant than a bad tenant. Screen each tenant with the same objective standards to ensure sensible business-based decisions – and to keep from violating Fair Housing Act (FHA)/Fair Credit Reporting Act (FCRA).
When screening commercial applicants, you'll focus on the company's history and information; when screening residential applicants, focus on the individual's info. To effectively screen tenants:
The best contacts and resources to help you get it done
Get the info and proof
Make sure applicants provide contact info for three prior landlords. Don't rely only on the current landlord's recommendation – check with previous one(s), too.
I recommend: Find rental applications at
LawDepot: Residential Application or
LawDepot: Commercial Applications.
Investigate applicant histories
Access credit reports with the applicant's name, address and social security number. For a commercial applicant, you'll need a business license/Federal Tax ID number to search. The more information you have, the more you can discover. Public records, accessible by anyone, include real estate, bankruptcies, tax liens and criminal histories.
I recommend: Visit
TransUnion,
Equifax, and
Experian.
Experian Small Business helps you assess possible commercial tenants. Use
Intelius to screen residential applicants. Check out
CitiCredit for a tenant screening costing $9.95 – with no membership/setup fees.
Call in the pros
Find a reputable tenant-screening company, and leave the in-depth assessments to them. Companies can screen by sexual offender registry, criminal records, SSN verification, and more.
I recommend: At
ATS, screen individuals or businesses. If you routinely screen tenants, consider joining
Landlord2Landlord (L2L), founded by a landlord in 1994 to eliminate problem tenants and unpaid rent. They offer screening, forms, and so much more.
Follow the law
Watch what you say/do when assessing prospective tenants.
I recommend: Every Landlord's Guide to Finding Great Tenants (plus 40 useful forms on CD) is a must-have for any landlord – the e-book is $14.99, or the paperback $16.99 plus shipping. Go to
L2L to learn what the FCRA means to you.
Conduct Patriot Act search
Under the USA Patriot Act, the Office of Foreign Assets Control (OFAC), a government watch-list/database of terrorists/criminals around the world, was created. This law requires landlords to conduct the OFAC Patriot Act search on individuals (by name) and businesses (by biz name).
I recommend: Go to
OFAC-IQ to search for people/companies with whom you should never conduct business.
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