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  • Writer's pictureDaniel sisto

How to Avoid Huge Red Flags With Tenant Selection

Tenant Selection

Screening and finding quality tenants can be a grinding, grueling process as real estate owners. There are more details to everything than simply saying “congratulations” to them and handing over the keys.

Speaking of keys, there is plenty to remember when going through a process with tenants. You do not want to have headaches and red flags pop up all over the place after you’ve sealed a deal. As you can probably tell, accepting everyone is a horrible idea and can cause massive business problems. This article will serve as your guide to tenant selection and following it can save you from costly and painful mistakes.

Finding and approving qualified tenants does take time, work, and focus. Yet it’s absolutely doable and doing so can save you from a litany of problems. With that said, here are some tips and suggestions for you to consider:

Choose a Tenant With Good Credit

Get a credit report on them. Look at it and the breakdown of each part of that report. This is important because some tenants have a shady background, including multiple evictions or an inability to pay their bills on time. Just by checking this out, then possibly discussing it with a potential tenant, will give you a better view of how to approach the entire situation when it comes to their credit. You just want to make sure this part of their application reflects both a sense of honesty and openness. Also, consider their credit history, applicants with a longer credit history have more data of when they pay their bills and understand the importance of their credit score and paying bills on time. It really separates the wheat from the chaff in the tenant selection process.

Verify their monthly income (Residential Properties)

It is absolutely crucial to verify the potential tenant's monthly income to have them sign on. Ask for pay stubs for the past 6 months at least and see if their income is at least 3 times the renting rate. This should be a mandatory step for choosing a tenant for apartments as it can really help separate all the bad tenants who can’t afford the monthly rent. having tenants that pay consistently month to month is ideal.

Perform a Criminal Background Check

This seems obvious to most people, but a lot of places forget this step and can save you from enormous amounts of trouble in the future. Additionally, it is public record and this information can be obtained easily. Also, see if the tenant is falsifying their information. It all their information does not match up, just move on. It will help you sleep at night and keep your business interests safe.

Look at the tenant’s rental history

You really want to check it out because they might have a sketchy history of bouncing around from place to place. To be clear, there are reasons for this (such as jobs, transfers, military service, etc.) and you could easily find them out. But if they are bouncing around for other reasons that are not clear, then it should be a red flag for you. Bring it up during a discussion with tenants if they feel, to you, like there’s something a little off. Maintaining and selecting tenants with longterm plans to stay in your city is ideal whether that be residential or commercial.

Consider their consistency on an application form

Take a look at the different addresses and jobs they’ve had for your sanity. If someone is moving around all the time and doesn’t “feel right” to you because of the numerous homes and jobs they’ve had, then it’s a red flag for you. Again, though, you have an option of simply bringing it up to the potential tenant and asking for clarification. There are situations which do happen because, well, it’s life.

Visit prospective tenants at their current residence

Think about this for a minute. It might be really tough to do because they may not live in the same city you do. If they live in the same town you do, though, then consider this option. Let’s say you need the final papers signed to get them lined up as new tenants. You show up and knock on their front door. What if you do this and you walk inside to find a house which looks like a trainwreck? This will give you a golden opportunity to see exactly how they will treat your property. It might give you a reason to pause before getting all of that paperwork done. This tip can help you tremendously in getting rid of bad potential tenants and save you from the stress of getting your property repaired from costly damages. Go with your intuition about a tenant

While this sounds a bit “woo-woo” for some of you, it is something which I know has helped in our dealings with potential tenants. You can have all of the data and facts pointing toward a positive outcome with an individual or couple. Everything lines up really good. But something within you doesn’t feel right about it all. It might be a meeting or phone call you had with the tenant, and something you heard simply doesn’t suit you. Ask people about their life, their families, their hometowns, and just things which would be considered important to make your decisions a whole lot better. You can also check these potential tenants on Google and their social media. If bad articles pop up, or huge red flags come up about the tenant, just move on. It’s not worth it and there are too many people out there searching for an office or residential place to choose from.

Take all of these suggestions into account because heaven knows, you want to avoid headaches and heartaches from tenants every single day. Doing this will make your life and business much easier and enjoyable. Author’s Bio

Daniels Greer Properties LLC was formed in 1998 by William Daniels and Amanda Greer Duenner. The Company specializes in tenant representation, site location, commercial properties, development for medical/office buildings, as well as marketing and project leasing of medical offices, and office space for lease. For more information, please visit our website at

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