There may have been a time where tenant screening was as easy as pulling a credit report and running a criminal background check. It’s no longer so simple. In fact, screening tenants in San Diego and throughout California has become complex. The potential for costly errors is high.
Stricter fair housing laws and additional tenant protections in California have led to more scrutiny when it comes to evaluating residents for your rental property. It’s important to remain compliant with all legal requirements, and you also want to make sure you’re taking a good look at everything that may qualify or disqualify an applicant from renting your property.
When you screen a San Diego tenant, you’re looking for a long-term resident who can pay rent on time every month and follow the terms of the lease agreement. You don’t want to run into a situation where you’re begging for late rent or thinking about eviction.
Here are some of our best tips for effectively screening tenants in San Diego.
Establish Consistent Rental Criteria
Document your entire screening process. Put your rental criteria in writing, and prepare to share it with any potential applicants who visit your home and express an interest in applying. This tells everyone what you’re looking for, and what will be required in order to be approved for the property. Written rental criteria is your best defense against any claims of discrimination or fair housing violations.
Check Credit and Criminal Backgrounds
Conduct a nationwide criminal background check, and pull up eviction records as well. Those don’t always show up on a credit report.
When you’re evaluating credit, remember that the type of debt an applicant has is often more important than the amount of debt. People fall behind on student loans and medical payments. That doesn’t mean they’re risky tenants. Look at how financially responsible the applicants are overall. If there are debts owed to former landlords, management companies, or apartment buildings, you’ll want to think twice. Utility bills should not be in collections.
It makes sense to establish a minimal credit score for approval, but make sure you’re looking at the entire credit profile.
Verify a Potential Tenant’s Employment and Income
You are looking for tenants who can afford rent. Moving in a tenant who doesn’t earn enough money to meet their obligations will only result in disaster. Don’t set them up for failure. The standard best practice in San Diego property management is to look for income that’s at least 3 ½ times the monthly rent. Ask for verification in the form of pay stubs, tax forms, or bank statements.
Remember that source of income cannot be considered when you’re screening tenants in California. You have to consider any source of income, and that includes housing vouchers. If a tenant applies to rent your property and the income that’s provided is what they take in from the Section 8 program, you have to consider it.
Explore an Applicant’s Rental History
Talk to current and former landlords because they tell you a lot about what it was like to rent to the tenant you’re considering. Send them an email or make a phone call. It won’t take more than a few minutes, and it will give you some very valuable information.
A previous landlord can tell you how a tenant paid, took care of the property, and communicated. Always ask for contact information, and do a little research to make sure you’re actually talking to former landlords or property managers. Tenants with a terrible rental history may try to give you contact information for friends or family members.
These are just some of the best practices we recommend when you’re screening potential tenants for your property. If you need help with any leasing or management, please contact us at San Diego Residential Property Management.