Tenant Screening in 2024

Krista Reuther:

Hello, hello. We are all here today to talk about tenant screening in 2024. There are a thousand reasons that you’d want to get into tenant screening, but you really want to make sure that you’re doing it in a scientific way, something that is a repeatable process and that aligns with the Fair Housing Act. If it feels like I’ve just spoken some Greek to you, don’t worry, we’re going to go through everything. But the key takeaway that you should get from today’s session, I want to make sure that you understand how creating and documenting a consistent process will save you time, stress, and litigation. Also, you should always, always, always let the Fair Housing Act be your guide. And finally, a tenant screening report is just one tool in your tool belt to find your next favorite tenant.

I want you to use all of them. So we’re going to go over the gambit today. Starting off here, let’s talk about tenant screening basics. Now, if you’ve been in the game for a while, it might feel very obvious why you’d want to screen tenants.

However, based on the fact that so many people said they were relying on their gut feelings, let’s talk a little bit more about why it pays to have a good process in place. First off, when you are screening tenants, you are essentially doing what you can to protect your investment. You want someone who’s going to move in, who can pay rent and who respects your property. While a screening report and screening as a whole won’t reveal everything there is to know about a prospective tenant, past behavior is a great indicator of future behavior. So if there is somebody who just really loves juggling chainsaws and insists that they do that in every single rental that they live in, you might not catch that by gut feeling alone. However, if you leverage some tools like a screening report, but also interviewing previous landlords, you can start to pick up on this person’s story and get a more comprehensive picture of who they are before you have them move in and have a contract where they are there for some set amount of time. Additionally, reducing tenants is going to reduce your costs, especially if you have a long-term rental. I still think it’s good practice for mid-term rentals as well. Short-term rentals, it’s a little bit of a different game given, of course, the span of time that they’re there, but when you have a long-term rental, the national average cost of turnover is going to be three months rent plus any lost rent due to vacancy.

That can really add up, especially if you’re in an expensive market. You don’t want a vacant unit. So to mitigate that, you can get great people in the door who you are confident will stay for a while, at least throughout your first contract and hopefully even longer, but it all starts with screening your tenants. Also, when you screen tenants, you create a more peaceful living environment. And this is true whether you have single-family rentals or multifamily properties, you want to know who’s moving in and how they’re going to fit into the neighborhood. But I do want to be very clear here. When I say fit into the neighborhood, that is not a euphemism, that is not some shady way of saying, oh, make sure you keep these bad actors out and bad actors associated with any type of protected class.

No, there’s no room for racism, any kind of ism in the tenant screening process. And if you don’t believe me, let’s jump into a quick little poll. Question for you.

Are you exempt from the Fair Housing Act? Let us know in this quick poll. I just want to, I’ll go over the criteria here in a second, but I’m always surprised by the answers to this kind of question. So do you think you’re exempt from the Fair Housing Act?

Give you about 15 more seconds to pop in. Now, if you’ve been to one of my webinars before, you know that I love talking about the Fair Housing Act. I think it’s a really important piece of legislation and something that we should all abide by. We’ll get into what this means here in just a moment. All right.

You guys are smart cookies. We have a more expected spread today. Sometimes when I ask this question, it’s closer to 50-50, which is very rarely the case in reality. But today, we have 97% of you saying, no, I am not exempt from the Fair Housing Act, and 3% of you saying yes.

So let’s get into it. What is an exemption? What would qualify you to be exempt from the Fair Housing Act?

Well, HUD is very clear about this. Basically, these are the qualifications, but there are still extenuating circumstances. So even if you fall into one of these buckets, I would highly, highly recommend that you talk to a local attorney or your local HUD office before you do anything else or assume that you are exempt. With that said, if you are in an owner-occupied building with no more than four units, meaning that you live in one unit and you have three other units filled with other people or perhaps vacant, you could be exempt. If you have a single family home that was sold and rented by you without the use of an agent, you could be exempt from the Fair Housing Act. And lastly, if you own housing that is operated by a religious organization or a private club which limits its occupancy to its members, you may be exempt from the Fair Housing Act. But again, just make sure that you are doing your due diligence and asking questions of your local HUD office before you assume that you are in the clear and don’t have to abide by the Fair Housing Act. Also, just because you’re exempt from the Fair Housing Act doesn’t mean that you can go wild when it comes to marketing your rental.

What do I mean by that? Well, specifically, you want to make sure that you are aligned with the Fair Housing Act. If you’re like, Krista, stop saying Fair Housing Act.

I don’t know what that means. Boiled down in just a few sentences, the Fair Housing Act prohibits any kind of discrimination or otherwise, I guess discrimination is the best word for any, okay, any kind of discrimination based on the seven protected classes. I have them listed here. Several states have additional protected classes. For example, Colorado protects age and I believe veteran status as well, but don’t quote me on that. So when you are advertising a vacant rental, you are required to not make any mention of preferences or limitations based on these classes and based on any locally protected classes in your area. So even if, let’s say I have a duplex, I live in one half of it and I’m looking for someone to live in the other half, maybe I’m only comfortable renting to women, I would not be able to list that in the actual advertisement, right? I would not say no men in my listing.

That would violate the Fair Housing Act and even though I am exempt from the Fair Housing Act, that will be upset with you and come after you for making those kind of comments or listing that kind of thing in any realm. So this extends to websites, this extends to newspaper ads, directories, etc. So if the advertisement itself violates the Act, even if the property being advertised may be exempt from the provisions of the Act, you could find a civil rights lawsuit at your doorstep. If you want to learn more about the Fair Housing Act, there are a few things you could do.

We have a course you can take to avoid up to a $16,000 fee for your first Fair Housing Act violation. We’ve also written about this topic quite a bit. Like I said, it’s one of my favorites to get into because I think it’s so important. So let us know if you want more information, we’re always happy to chat about it. With this in mind, let’s talk about your marketing. This marketing is where you’re going to start when it comes to tenant spending.

What do I mean by this? Well, first and foremost, of course, make sure that you’re following the Fair Housing Act. But more than that, you want your listing to help renters understand if it’s going to be a good fit for them, right? Like they want to read through your description and be able to either say, yes, this is going to be the spot for me or, hey, I wouldn’t qualify for this one.

Let me keep looking. For example, you want to make sure that you’re including key qualifiers in your listing. If you don’t allow pets or if you limit pets to specific animals, make sure that you have that information in the listing.

Same with your smoking policy. Highly, highly recommend putting those details in there. You could just have bullet points. But that way, if I’m going through and I’m looking for a rental, I can self qualify before I even reach out to the landlord. It could also be great to include what your screening process looks like.

So I have an example here, you could just have a sentence that says, hey, I require every applicant to complete a background credit history and eviction history report. Sometimes people will just opt out because they know what you’re going to be looking for. They know that bad things are going to pop up or things that they don’t want in the mix. And so they’ll go and find a different rental. And of course, when you’re looking at marketing, a nice transitory step is making sure that you’re leveraging a pre-screening tool.

A pre-screening tool is basically a set of questions that once again allow an applicant to self qualify for your rental. And we have a couple of different ways that you can do that. I’ll get into that a little bit later. But for now, we’re going to move on to defining your tenant criteria.

I’m going to take a quick look at the chat and the Q &A to see if there’s anything that needs to be included. Let’s see. Mike asks, who the heck would admit that you’re not renting to someone because of what is listed?

Mike, you would be surprised. I once had somebody tell me, very confidently with their full chest, that they made it known that they would not rent to a specific political party. And that is a no-go. You should not do that in your listing. So I know some of this might seem like, well, Doug, Chris, why would anyone do that? People do it.

I was just going to talk about it. Cheryl, the Section 8 Applied, Section 8 Housing has its own rules when it comes to the Fair Housing Act. Specifically, I mean, you want to make sure that you’re following it to a T. But if you are in that program, I’d highly recommend, one, checking out our webinar on Section 8 Housing, but two, making sure that you get in contact with your local office to ensure that you have everything you need and you’re doing things the right way so that you don’t run into any kind of issues or get deleted from the program. Mari asked, this also includes tenants that have an ESA. So you cannot write in your listing that you don’t allow ESAs. You can say that you don’t allow pets. Pets are different than ESAs. If you’d like, we have a webinar on ESAs and ADA compliance that we just did last month. We’d love for you to check that out.

It has a lot of great information. But no, you should not say, I don’t allow ESAs or I don’t allow services. Bray, what if you’re an owner agent? I assume you’re talking about the fair, or excuse me, the, yeah, the Fair Housing Act exemptions. If you are an agent, you are, and you facilitated the purchase or the sale of that rental, well, specifically the purchase, I guess in this case, my understanding is that you are not exempt from the Fair Housing Act. If you were not acting as the agent, if you brought somebody else in to do it, then you might be exempt if it’s a single family home and there was no agent involved. But that it does get a little bit murky, so I would recommend talking to a lawyer for sure.

Oh, Kimberly, thank you for your nice words in the chat. All right, looks like we’ve hit a lot of these wallifiers here. If it’s an owner occupied house hack, doesn’t Murphy’s Law apply? I’m going to be honest with you, Nick, I need to look into what Murphy’s Law is.

But if it’s a house hack where you have fewer than four units total, so four or fewer, then you have more say over who your roommates are, you just wouldn’t be allowed to put it in your listing and say, oh, I’m not allowing any Catholics to move in here. I just picked a group. Okay, one more question for now, and then I’m going to keep moving along here.

Actually, I lied, two quick ones. Matt, make sure you check out our ESA webinar. It’s going to answer your questions and tell you how to validate ESAs. So that is really important.

Cheryl says, I’m not in the program, but is it okay to say no section eight? Interesting question. It depends on where you live. Some places that is considered income discrimination, so you can’t do that.

Again, I would double check and make sure that you are in like following your laws to a T because it’s going to depend on your locality. All right. Okay, I see some great questions here. Jonathan and Ethan, if you have the chance, can you drop the link to the Section Eight webinar and the ESA webinar when you have the opportunity? We’ll get that over to you.

But you guys got a pinky promise that you don’t leave this webinar to go check out my last webinar. This could still hurt my feelings. Just kidding.

I’m a professional. I don’t have feelings. Let’s keep moving on though. These are great questions. I want to make sure we get everything. So when it comes to defining your tenant criteria, I want you to be very strategic about it.

But why? Well, because if you’re very strategic and you write it down, you make sure that it is a repeatable process, then you will be protecting yourself from potential litigation down the road or from HUD complaints. Really, it starts with a HUD complaint and then it can go into litigation depending on what happens with the investigation. Okay. So your tenant screening process needs to align with fair housing laws.

It needs to be repeatable. It shouldn’t differ by renter. And there are also situations where you cannot make blanket judgments. We’re going to go into that here shortly. Let’s talk again about the prescreener I mentioned earlier. So this is an example of what you might see in one of our prescreeners. It gives you great information regarding the applicant’s contact information, their employment situation, their income, when they want to move in, who’s moving in with them, or at least how many people, their pet information, smoking status. And it also gives them a chance to ask about the unit. Right? Why do we do this? Well, largely because it helps to reduce the burden on landlords as they’re trying to find a great tenant to live in their rental.

Right? We automatically send this to each lead. And so that means you don’t have to do that heavy lifting. We’ll do it for you. And then you can tell at a glance that this is going to be someone who aligns with your criteria or if they are falling short in some category. When it comes to setting your criteria, there are quite a few things that you want to consider. But the thing that comes to mind for most landlords is, of course, the financial criteria. So here I have just some general rules of thumb. But again, this is something that is very personalized to the landlord. So you can adjust it as you see fit. You just need to make sure that you are consistent.

Right? So we have a little chart here of credit scores. Typically, people accept applicants who have at least a 560 credit score all the way up through 850. Perfect score.

Right? However, something to bear in mind. If you choose to reject an applicant based on their credit score, you have to let them know via adverse action letter. That it’s legally required. Right? What is an adverse action letter? Great question. It basically reminds the applicant that they have the right to look over their credit report and to take action if there’s any incorrect information or if they see something that shouldn’t be on there. Now, they would deal with that through the credit union. If you screen with TurboTanet, we use TransUnion. So that’d be a conversation between them and TransUnion, not between you and the applicant. Okay? Something else to consider, of course, is their income.

Right? So typically, what most landlords like to see is a rent to income ratio of around 30% or less of gross income. That means that they would have plenty of money to pay your rent and still take care of their other expenses. So that is why it’s a typical rule of thumb. If you’re not sure how to calculate that, we have a free calculator for you. I’d love for you to use it. Again, we will be sending out this deck after the presentation within two business days.

So you can just click here, use that calculator and figure out where your applicants are falling and if they’re going to qualify based on this criteria. Also, when you are looking at their financials, ideally they will have either no collection history or old collections. Old collections could be anything.

Typically, collections stay on your account for seven years. And if you think about who you were seven years ago, I know that when I think about me seven years ago, that was a very different Krista. So it’s entirely possible that somebody had made a mistake in their past or did something and they have rectified the situation they’ve learned from it, but it’s still on their history.

Something to consider when you are looking over their application. Right? How old is the collection? If it’s older, it might be less risk to move them through the pipeline.

If it’s newer, if they just went to collections last month, that might be a red flag and cause you to pause. Also, fun fact, you can get a template of an adverse action letter through our Facebook group. So it’s not going to be live yet, but if you go ahead and go over there and join, I whipped up a template for you that you can use.

It details everything that they need to know and has some spots where you can fill in the details. So join our Facebook group, BetterLinlarts, to get in on that. It’ll be live within two days of this presentation as well. All right. Let’s keep it moving.

We’ve talked all about financial criteria. I’m assuming that some of you might be scratching your head and saying, well, Krista, there are some situations that might be a little bit murky. What do I do with those? Great questions.

I’ve populated a few of them here. So what if you have an applicant who has a low credit score, lower than what you would usually accept, but their other financials are good? Well, you could choose to charge them a higher security deposit.

Right? Now, this is going to depend. I always want you to look at your local laws before you make this kind of decision because some states have specific laws regarding how much of a security deposit you can charge. However, just bear in mind that if you’re willing to do this for one applicant, you should be willing to do it for all of them. That’s really the mode of reality we’re in.

Right? Like, you want to make sure that this is a consistent process and that you’re not showing favoritism or otherwise preference for one group over another, especially as it relates to protected classes. So what if they have no credit history at all? Well, you’d be surprised that does pop up, especially because it takes six months of history to create a person’s first credit score. So oftentimes, younger renters and college students don’t have a credit score to analyze. So with that, you could consider making sure that they have a cosigner or guarantor and a higher deposit. Again, I want you to do your due diligence and make sure that you’re allowed to charge a higher deposit before you put that into writing.

But bringing someone else in who can help make sure that the rent gets paid could be a great solution to getting in a great applicant who would otherwise not qualify. If you’re not sure what a guarantor or a cosigner is, let me break it down for you. A cosigner on a rental property is someone who signs a lease with the applicant and assumes equal liability for paying rent, while a guarantor is only liable to make payments when the primary applicant can’t or won’t pay.

So similar in that they are both supporting the rent and making sure that you get paid, but a little bit different in terms of when they are liable for that payment. The next most important thing that most folks want to talk about is, of course, evictions in eviction history. I can understand why, right? Evictions are, whoo, they are spicy.

They are painful on all sides, and it should be handled really carefully. If you see a previous eviction come up on somebody’s straining report, I think the next loop should be to talk to their lay lord references. Okay? Now, whatever I bring up talking to lay lord references, and we’re going to get into the kinds of questions you can ask later on in this presentation, but when we talk about that, people ask, well, isn’t it possible that they’re just lying to get them out the door? Like, what if they just want this renter off their hands and so they’re willing to say anything? Unfortunately, there’s always a chance that someone’s being untruthful, that another landlord is kind of throwing you under the bus in that way.

This is why I want you to take this as just one tool in your toolbox. You’ll hear me say that a lot today, but this is just one method that you can use to get a whole comprehensive picture of someone, and you should evaluate how that other landlord is talking to you and treating you and the way that they describe the situation in order to suss out how valuable their reference is. Ideally, you’d be able to contact like one to two folks and be able to get a more complete picture from that for both of those conversations, but I still think it’s worthwhile, especially in an eviction situation. Also, you are allowed to ask the applicant, right?

You can say, hey, I see that there’s this eviction from 2015 here. Can you tell me a little bit about what happened and see what they say? You know, maybe it’s that they were young and they made some mistakes.

Maybe it’s that they lost their job and fell in hard times. You won’t know until you asked, so it warrants a conversation. If you have someone come through who has a good income and good credit, but in eviction history, I would say follow the same steps above, but also remember that you are looking for someone who fits your screening criteria as a whole as closely as possible. So if there are other applicants who fit better, it’s okay to move forward with them.

All right. Tied right into evictions and something I’ve seen pop up in the chat a little bit. Criminal backgrounds. So this is a sticky situation, especially because there are several states for which TransUnion and other credit reporting agencies will not provide criminal history. So just bear that in mind. It’s something that you want to be aware of, especially to make sure that you’re not asking for something that would be either impossible to get or illegal to try and procure.

Right? So with that in mind, HUD advises landlords to look at every case very closely to see if there are any arrests. There’s a difference of being charged with a crime versus actually convicted of the crime, and you want to make sure you understand the lay of the land before you make any decisions about this advocate. So again, as you’re looking at each case, hopefully, you know, ideally there’s not more than one. If there is, I want you to look at every single one.

I want you to see if there is a conviction and how old that conviction is. People do make mistakes, right? If I came to you and you saw that I had committed petty theft when I was 15 and it’s on my record, there are, that’s different than if you look at my record and you see that I committed grand larceny last month. Very different situations, right?

You’ve got to leave space for people to grow and change while trying to protect your rental. So again, look at the conviction, how old it is, any kind of evidence of rehabilitation that can look like a lot of things. Maybe the person completed a program, maybe they completed some community service, what have you. There are different ways that you can see that someone’s been rehabilitated. And also you want to make sure that you look at the applicant’s history since that point in time. Okay. Something very important to note, registered sex offender status might not show up on a criminal background check, but the registry is a public database.

So make sure that you check your local laws for specific statutes, but that is something really important, especially, you know, if you have kids in your units, do your due diligence and check on that very pointedly. Okay. When I send out this, this deck, you will be able to click on this link and start exploring, but I just wanted to put that out there. All right. So we’ve talked a lot about different criteria you can set.

You may be wondering, well, Krista, like there are a lot of tools, you’ve mentioned this toolbox. What about checking out what people are doing online? Can I scope out their social media presence? The short answer is you can. Public social media accounts are totally fair.

You can look at those. However, remember that you have to treat every applicant the same, right? So that means if you are looking at my Instagram, you need to make sure that you’re looking at everyone’s Instagram who applies to your rental. If you only look at my Instagram, but then you look at Jonathan’s Twitter, that’s, it’s going to create a mismatch, and that’s not treating everybody the same, right?

So when you are looking at these socials, if you find evidence of something that would either violate the criteria that you have set, or otherwise makes it seem like it’s not a good fit, make sure that you’re documenting those tidbits, those posts that stand out, right? It could be a screenshot, it could be whatever, but just make sure that you’re documenting the whole process. That really comes in handy if there is a HUD complaint of any kind. You can point to it and say, okay, this is, this is the reason this is what it was, right? Don’t feel like you have to go to the tenant and say, well, I saw that you liked a post that said landlords are mean, and so I’m not renting to you. You don’t need to do that.

This is, this documentation is really just in case you need it. It’s not something that you should be throwing in anyone’s face. A caveat to the idea of looking at people’s social media, if you can’t look beyond differing political beliefs or lifestyle choices, I would not recommend using social media as a screening tool. At the end of the day, you are looking for someone who could be respectful and pay the rent on time.

It doesn’t matter what political party they belong to, or what they do with their weekends. You really just want to keep it to the facts and follow a repeatable process so that you don’t get into any kind of murky situations. All right.

Take another pause here before we jump into reading screening reports. Let’s take a quick look at the chat. Madonna, I would recommend she asked, do you ask for social media names or just search them? I would be careful because if they have a very common name, you might find a lot of different people under that name.

If you can’t determine if that’s exactly them, wouldn’t be a great use of your time to try and pin something that this poster who might be the same person said onto the applicant. It could be very tricky. All right.

Let’s see. This question doesn’t go along with what you’re saying right now, but how long do you market a property before deciding on tenants? To be fair, it seemed like I had decided them on a first come first serve basis and accept the first one that was good enough even if someone better came along. Yeah.

That’s a great question, Deb. That’s exactly what you want to do. It’s really first come first serve. The first person who comes in and meets your criteria should be the one that you rent to.

Even if somebody with a higher income or something comes along later in the process, you need to honor whoever got you the completed application meeting your criteria first. All right. It’s an interesting thing. It’s in the chat. No questions. Let me just check here. Okay.

A lot of good questions. Best method to determine income ratio when there are two adults as roommates. So I would say, and you know, I’m really interested other landlords chiming in the chat how you would handle the best way to determine income ratio when you have two adult roommates. Yeah.

I would say you want to make sure that each of them has at least 30% for their half of the rent, assuming that they’re splitting it in half. Right? Let me phrase that a little bit better. You want to make sure that each of them can cover their half and that their half of the rent is at least or it is 30% of their income or lower. That would be ideal.

Now, unfortunately, given wages versus rent increases, what I’m finding from original research is that more and more tenants are spending more than 30% of their gross income on rent. But that’s the way that I would do it personally. Sound off in the chat if you have a different answer though. Okay. And we have Jonathan typing up an answer.

How wonderful. Kim, you have a great question about screening a traveler from somewhere else from Indonesia at this point. We do have an article about screening people without social security numbers.

So there are other methods that you could pull in to get a better understanding of who they are. Jonathan is typing right now, but when he gets a chance, I’m going to ask that he pulls the how to screen a tenant without a social security number article and put it in the chat for you. Hillary, how can you tell, wait, how can you tell how old a collection is on the screening report?

So typically it’ll list when that collection account went live and we’ll get into what’s on the screening report right now. Okay. Can you refuse to rent to roommates? I prefer to rent to related people, family, or at least engaged.

Vivian, that’s a good question. My gut says no. If only because, well, I guess I’m not exactly sure, but I would lean toward no because I think you start getting into like familial status at that point. You know, back in the day, I rented a place with my long-term boyfriend at the time and it would be discriminatory to not allow us to rent just because we weren’t engaged versus a family.

So I would say most likely not, but again, check your local laws, talk to your local HUD office. They are very accessible and that would be great. Okay. Brad, last question for now. I would say, okay, let me read you the question first.

Is there any reason we can’t say something like we are taking applications for the next two weeks? Nope. That is A, okay, you are allowed to do that. And again, it’s just whoever comes in first within that two week period and meets your criteria should be the red tier you go with. All right. Still some great questions.

We will get to as many as possible, but I’m going to keep trucking along here. Let’s talk about how to read a screening report. So first off, there are various components when it comes to tenant screening reports.

When you get one through TurboTenet, this is what you can expect. We will show you a criminal background check and eviction history report where we can. Like I said, there are some states that do not allow this to be pulled. We’ll also do a credit check. We’ll have some income verification and of course, you can pull in some interviews.

Now, the interview component is not automatic, but I’m going to give you everything that you need to know in order to understand that. Similarly with income verification, I’ll tell you about a tool that you can opt into. And of course, some ways to know if somebody is giving you something that has been faked.

So we will get into the whole shebang. When it comes to a tenant credit check, this is what is going to show you your applicant’s financial history and current financial health. So it’s going to include things like their credit bureau score. Again, we use TransUnion, their social security number verification, employment history, fraud indicators, address history, payment history, collection accounts, and civil records. So we have a little example here. You can tell, let’s get to the point where it shows the date.

It’ll show any kind of information we can pull about the criminal history and collections account, including when it happened. So keep an eye on that. Excuse me. Let me take a quick drink of water so I don’t run dry.

If you are super new to screening tenants, there are quite a few terms that I want to make sure that you know. So let’s run through them. Okay. First and foremost, derogatory items. These are going to be any kind of negative reports like late payments and delinquencies that pop up. So you want to pay attention to these for sure. You should really be paying attention to the entire thing, but I want you to make sure that you understand if there are derogatory items. When we say trade line regarding a tenant credit check or a tenant screening report, it’s just another way to say account.

Okay. So trade line is account. A revolving type of charge that’s going to be an account with minimum monthly payments. An installment is an account with a fixed number of payments.

So one way to think about that is, well, like a mortgage, right? Like, these folks are not going to fall into that category. They’re trying to rent. So most likely, they won’t have a mortgage. But if they have something where they have a fixed number of payments, that’s going to be considered an installment account. If there is something with minimum monthly payments, like a credit card with a balance on it, that’ll be a revolving account. Inquiries are requests from lenders to examine a borrower’s credit file. So for example, when you run this tenant screening report, that is going to be an inquiry on the applicant’s credit.

Okay. A snapshot is just an overview of the applicant, which includes their credit score, employment verification, accounts and collections and public records. It’s really just a quick picture of who this person is and how they’re living through life financially. Let’s take a quick look at an example here.

Okay. So this is what you might expect to see from TurboTenant if you are screening someone of us. So we make it really easy. We have this scoreboard here at the very top.

This is your snapshot. So you can tell, okay, this person has one criminal history record. They have one account and collections.

There’s one eviction on their record. And then you can get into the details here. Also, if their social security number does not align with what the trans union pulled, you’ll get a little notification to let you know to double check. Sometimes people fat finger things and they might have typed it wrong. Sometimes they could be trying to obscure that number for whatever reason. We flag it so you can go ahead and check that out. Then you can get more into the credit report understanding their debt balance, their total monthly payments, et cetera. Here we have their trade lines or accounts, any kind of line of credit that we get into collections, public records, addresses they have on file, employment, and then any other inquiries. So you can see things like a car loan if they inquired about that, any other apartments they’re trying to get, et cetera. You’ll likely see it here.

Next, let me take a half step back. I do believe that when you’re inquiring for a rental, it’s a soft credit check, so that won’t pop up. But hard credit checks like things for loans are going to be on this list.

All right. So as I mentioned, when you’re looking over these tenant screening reports, there are a couple things that you should keep in mind. First of all, at least here at Termo Tenor, the credit score is going to be color coded.

So grain is high, red is low. Something to bear in mind, we make it easy from a glance. Also, the number of employers reported may not be up to date because employers are not always reporting on these things, right? It’s just something that is not the most pressing part of an employer’s job, making sure that people know who’s working there. So bear that in mind, make sure that you verify current employment and check lay of Lord references.

How do you do that? Well, let’s start with employment. So when you are looking to verify employment, there are a myriad of different things you could do.

So first, you could request previous paystubs, group of payment, or otherwise gather documents that vet your prospective tenants’ ability to pay. If their documents give you pause, I want you to dig deeper. What does that look like? Well, let’s say that they give you something and it just looks really strange.

It looks a little fake. I’m going to give you some tips about what those signs of fake paystubs or fake documentation could be, and then I want you to ask questions. If you have someone who is self-employed or a freelancer, they can provide something else like a ledger, a 1099 miscellaneous statement, excuse me, bank statements to show deposit history. Inherently, there are a million different ways that you can verify someone’s income and also their employment, but their income is going to be the most crucial factor here.

Good news for you who have attended live. I will be sending out a downloadable with some of those different kinds of documents that you can request to verify someone’s income. So again, keep your eye on your email. Also, if you are curious about someone’s income and if you want to really make sure that you understand what they have going on in their wallet, premium TurboTenet landlords enjoy income insights. This is where we look at the reported income that they’ve put down on their application and compare it to existing records. You get a little notification just like you see here where the income is either close to or higher than what they reported or lower than what they reported.

We have an image of that a little bit later on. That’s a great option if you want to just really make sure you understand who’s moving in. All right, I promised you some tools to suss out fake paystubs.

Let’s get into it. So really what it comes down to when you’re looking at fake paystubs is trying to understand if this is an actual verifiable document from their employer or whoever. So there are some key tells about this and it’s really important that you take it seriously because unfortunately the scam is getting even easier to conduct. It only takes about a minute to do, costs maybe $5 to make it, and they can do it online. So with that in mind, when you receive a pay stub or any kind of documentation, first thing I want you to look for is if the numbers are perfectly rounded. I don’t know about you guys, but the last time that I received a perfectly rounded paycheck was never. That doesn’t happen. Like inevitably there are going to be some dollars and cents.

It’s not going to come out to an even $2,000 every month or if it does, I would definitely ask questions. Pay. So we have an example of that here. If the net pay is an even perfectly rounded number, that should give you pause. Also, if the document doesn’t look that professionally made, that might be the most obvious red flag.

Like if things are just not properly aligned on the page, or if information is inconsistent across the document, you should absolutely be pausing. And then I will tell you what to do with that in just a second. Another thing, make sure that zeros and o’s are not being used interchangeably. We have an example here. You can tell that one of these is not like the other, and a real agency, a real employer, whoever is producing this document would not make that mistake. It’s really improbable that that would happen.

However, if you’re like, well, I don’t know, it could be, but maybe it’s not. What I’d recommend you do in this circumstance is reach out to the tenant or to the applicant and ask for more information. Specifically, I might say, hey, Jonathan, I appreciate you getting me your pay stub. I would like to make sure that I have all the required information to verify your income. Can you please also submit to me a bank statement within the next week? So what I did there was I acknowledged that he gave me something. I also asked for further documentation, and I gave a specific timeline. If during that week somebody else comes in, they have all of their documents in a row, everything looks good, they meet your criteria, you can go with the other person. It’s a first come, first serve basis, and you want to get someone in who meets your criteria sooner rather than later. So bear that in mind. But if you do suspect that someone has given you something fake, I really want you to make sure that you’re asking for more information and you’re feeling good.

If you don’t feel like you have the confidence to do it, don’t worry, we’re going to hit this again in just a second, but I figured I’d throw it out here so you can start ruminating on it. Before we hit it again, let’s talk about fake other fake documentations, right? Like fake document twos. Document twos? W twos.

So again, I want you to ask yourself the same questions. If you get a W2 that doesn’t look professional, it looks a little strange, it just gives you pause and any reason, verify that the company actually exists, right? So if we go back to this example, if I can, let’s see, there is an LLC name up here. I could go into Google and I could Google Smith and Hernandez, Denver, let’s say, because that’s where I am, and look them up to see if they are a legitimate company. If they don’t have a webpage, if their webpage looks very suspicious, meaning it doesn’t have any real information or they’re not trying to sell any services, that would give me a significant pause. That’d be a spot where I would be asking more questions and requiring more documentation.

Their website should display contact information, it should explain what that company does, and if you find an office phone number, you can call and verify employment. That is well within your right. Granted, it’s probably just going to be a very quick, like, hey, did Jonathan ever work here? And then they’ll say yes or no, probably not going to get more details than that, but an HR department should be able to do that for you. Before we move on, this is an example of what you might see if your applicant reported an inconsistent income with what Transnium is pulling out.

Again, this is available through income insights, which is available to premium, TurboTenant landlords, so be sure to check that out. In the meantime, let’s take a brief poll break. Have you ever received a fake pay stub or a fake income verification document? Here it is. Oh, the answers are popping in. It is moving quite a bit.

I’ll give you about 15 more seconds to get in here. Now, I’ve done quite a bit of research on fake pay stubs, anything that gets faked in the application process. And unfortunately, we are seeing a rise in faked documentation, particularly since COVID. It’s really increased to the point where a lot of property managers don’t feel like they are catching as many of these fakes as they used to.

So that’s why it pays to really understand what’s going on and to have your red flag meters at the ready so you can tell what is popping up for you. Share these results. It looks like 58% of you said no, you have never received a fake pay stub or fake income verification document.

But 18% of you said yes, and then we have another 25% who were not sure. So again, this is a real problem. I don’t want to scare you, but I do want you to be aware because it is something that we see getting worse across the industry, right?

Like just industry wide people are reporting that this is getting hairier and hairier. So I want you to have everything you need to make sure that you can fight back. With that in mind, let’s rehash what you should do if you receive a fake pay stub or a fake document of any kind, right? So first and foremost, I want you to make sure that you communicate with that applicant.

Let them know that you’re having a hard time verifying the proof of income with the documents that they’ve submitted. And I want you to do this very matter of fact. Do not come at them with an accusatory manner. Do not yell at them. Do not tell them that they are being scum of the earth.

Don’t do that. I want you to just go to them and say, hey, Krista, I’m having a hard time verifying your income with the documents you’ve submitted. Can you please provide me X, Y, and Z by this date in order to be considered for the rental? This extra process might be a hassle for renters who are honest, but if they really want to rent your place, they’re really, they’re going to comply with your request, right? On the other hand, if they are not honest, if they are bad actors, they will likely realize the jig is up at this point and move on to the next susceptible landlord. If you’re worried that you have a fake pay stub that you already accepted and the applicant has become your tenant, you still have some options available to you. So before you address the issue with your tenant, I would highly, highly, highly recommend seeking legal counsel in gathering all your documentation to prove your case. This situation is likely to lead to an eviction, so it’s best to be prepared and to make sure that you are really laying out your different options before you jump down that rabbit hole, because again, it’s very expensive and very, it’s a huge hassle on all sides. So just know that you have recourse, but you want to be very strategic about it. Okay, got some final steps here. Getting close on time, I’m going to pick out a couple questions and then the Q &A is going to come right after this. So please do not fret.

All right. Just wanted to see if you noticed my question about criminal reporting. I have to comply with Cook County’s law, which requires us to run the criminal report after credit and eviction reports. Yes, so TransUnion complies with the laws across the nation. They make updates regarding what people can pull from which states.

So yes, TurboTenant is compliant with the laws for Cook County in regards to what you are pulling for tenant screening and everywhere else that we can. Right? We have a great legal team. They keep up to date with the different legal updates, different requirement changing, etc., so that our product can always be up to date for you guys. Okay. One more question for now.

Actually, I’ll do two. What if the prospective renter only sends you copies of checks? I am not sure. If I’m guessing this comes into income verification, if it’s a copy of a check that they’re getting for a service, like I’m thinking maybe they’re a nanny or something, and that’s how they get paid, I might require additional documentation. So maybe a bank statement. Now bank statements are a bit invasive because again, it’s showing everything that’s going on in their bank account, but that is something you can do if you want to make sure you understand the full scope of their income and different financials.

Right? In that case, if there’s someone like a nanny or their freelancer, you could ask for their 1099. That is where they report income to the IRS, and that could give you a good understanding of what they made last year. So a couple of different options for you there. Last question for now, and then I promise you, I am going to get to as many of these as I can, but what if the company on the website is temporarily closed?

That’s a great question, Gloria. If I had an applicant whose website, or whose company’s website was down, I would ask more questions. I would see, can I find that company on the Better Business Bureau? Are there reviews on Google?

Does this seem to be legit, or is this kind of a farce, and they’re just saying that it’s down, but there are no records of them ever really existing? Those are the kind of things that I would dig into. All right. Okay.

So let’s keep it moving, and then I will come back and try and address all of these questions as quickly as possible. Woo-hoo! We’re doing it, gang.

Let’s get into these final steps. So when it comes to narrowing down your applicants, I’m going to recommend that you meet them in person if you can. I know some of us are about landlords, and that it might not be possible for you to pop over and meet someone face to face, but it is nice to be able to get that human touch and to really understand how well you communicate both while you’re actually scheduling and when you’re talking to them in person, right? That can give you a good idea of who’s going to be a good fit if you have all of the other criteria in mind.

This is where your gut can come into play, but again, it’s just one tool in your toolbox, and I really want you to hone in on the scientific approach first and use this as a supplementary bit, all right? At the end of the day, make sure that you are sticking by your screening criteria. So assess any red flags that arise. Make sure that you’re contacting their previous landlords. I don’t think that’s utilized enough, and I think it can really give you some interesting insights into who the person is, especially from a fellow landlord. Also, if your applicant has a pet and you accept pets, I would recommend screening them as well. I’ve linked out to a blog where you can learn more about that, but it’s well within your right to get to know who that little furry renter is going to be and make sure that they’re a good fit for the place as well.

So bear that in mind. When it comes to interviewing previous landlords, you can really, again, do what you’d like, but I would urge you to remember that this is something, this is a lever that you can pull. So first and foremost, I want you to evaluate how you interact with that previous landlord outside of their answers regarding the tenant. If they’re kind of snippy with you, if they are unwilling to take responsibility for things, factor that into the answers they give you, then ask them questions like, how long did the tenant read from you?

What condition was the unit in post move out? Did this tenant have any issues with their neighbors? And perhaps the most important question in my opinion is, would you rent to them again? Now, if this landlord is like, yeah, I hated renting to Krista, she was so annoying, but then they turn around and say, I did rent to her for five years though. That would be one of those answers that gives me pause and would let me know, okay, I’m going to take what this previous landlord is saying with a grain of salt. Maybe there’s another previous landlord I could touch base with and ask about this tenant, but just have your mindfulness up when you’re having these conversations, because there are always two sides to every story. But you can really understand who’s playing what role when you kind of give yourself the full scope of what’s going on by asking these questions and evaluating both the answer and the person answering. All right. So you’ve done your due diligence, you’ve evaluated people based on your scientific criteria, you’ve interviewed a past landlord, and now you’re getting ready to actually have them come and view the listing.

Good news. We can help you make it really easy to schedule your showing with our newest feature, which is our showing scheduling feature. So inherently, you just input your information as you see in this gift, and then you can set your availability. So you can say, hey, I’m only available on Wednesday the 20th through the 31st.

That’s it. And I’ll be available from 11 a.m. to 3 p.m., etc., etc. You can then invite people to book within that window, and that way you can lessen your note shows, you can impress prospective tenants with this easy to use tool. And you do not have to have a virtual assistant trying to tie up loose ends for you. You can take back some of your time without making a mess of things, because we handle all of the notifications for you.

It’s also less back and forth, which is nice. So when somebody goes ahead and puts in their date, they have a confirmation email that goes out. We also send them a reminder 24 hours and two hours before the showing time, complete with the address and any kind of showing instructions you include it, and you and your tenants can easily cancel if your plans change. So bear this in mind, I’m really excited about this tool.

You should check it out, try it out, give her a whirl. It’ll also send a follow-up email two hours after showing to see what your next steps for the renter are. Pretty exciting, right? Really streamlines the process. If you get down the line and you discover that you need to reject someone, we make that easy too. Just bear in mind, you can’t deny them based on their gender, age, race, ethnicity, sexuality, familial status, or any other protected class based on your locality. You should state, send an email that is polite and succinct about not being able to offer them the place. Now bear in mind that you would only send this kind of email, this very short one, if you did not pull their tenant screening report. So this is what you would send if they haven’t gotten to that point, maybe you’ve accepted somebody else, but you have not actually screened them yet.

You can just send a very basic email saying, hey, I’m the landlord of this property, unfortunately, I can’t offer you this rental at this time. If you have questions, let me know. We send this off for you if you are using our free service.

Mazels to you. We’ll get into what you need to send if you have screened someone here just a minute. But before we jump in, just make sure that you, what you really want to do when you’re screening tenants, it is a numbers game, right? So until you have assigned lease, I would not disqualify people who pass your criteria. Once you have assigned lease, do go ahead and reach out and let people know, hey, this unit is no longer available, be polite, be succinct, be a little vague. You don’t have to explain anything about this, especially if you have not pulled a tenant screening report.

If you have pulled a tenant screening report, you need to send what’s called an adverse action letter. This is the template that will be live in our Facebook group. If you’d like to go join, highly recommend it.

There’s some great conversations in there. But what this does, this adverse action letter, it reminds them that this, that they have the right to go ahead and look over their tenants or the, excuse me, their credit report and that they also have their right to question the completeness, accuracy of the information, et cetera, with the actual credit reporting agency. And it outlines all of the information for them to get a hold of that party. Once again, if you screen your tenants through TurboTenet, we send this out for you. So it’s a wait off your back, you know that you’re compliant with the Fair Housing Act and also the Credit Reporting Act here. But just make sure that you’re doing it even if you’re not screening with us. It is very, very important.

You can get in a lot of trouble. Okay. All right. So we talked a lot. I know there are some questions in the chat and also in the Q &A. So I’m going to start here. Okay. Scott asked, where is the scheduling tool?

The scheduling tool exists in TurboTenet. Okay. So you can go ahead and check it out. I believe that it’s free, but let me double check on that for you. Or Jonathan, if you have the opportunity to correct me in the chat, I believe everyone can use the scheduling showing feature, but I don’t want to leave people astray.

Ooh, Jon has a great tip. If the company’s website is down, you can always try the way back machine to see if it might be on that. If it’s questionable, I usually check the domain name registration with who.is.

If the registration date is reset, then that might be a red flag. Those are great tips, Jon. I think that’s fantastic. Aaron asked, how do you know if it’s a real landlord? I detected a landlord that was a family member. Yeah, that’s a great question.

And it comes in two parts, right? Like there’s not a landlord registry that you could check to see if they are an actual property owner. So again, I would use this as one part of your toolbox, but don’t lean on it entirely, right? Because if it is a family member, or if they genuinely rented from a family member, that could be a case. I’d say lean on your gut in this situation, right? When you’re talking to the other landlord. If they’re too complimentary, or if it seems like details just aren’t lining up, maybe they give you a different move out date than what your tenant gave you, that would give me some pause. It wouldn’t necessarily disqualify an applicant or me, but if that disqualifies them for you, it’s well within your right, just make sure that you’re repeating that process with everyone.

Okay. Does the eviction check for eviction filings, or only if the eviction went to completion and was set out? My understanding, Frederick, is that the eviction check only pulls completed filings, so evictions that went all of the way through.

If you start the eviction process, but it’s either resolved through means outside of the court, or if they’re able to pay what they owe, etc., it’s not going to pull up on that report. Okay. Sorry, I’ve got a lot of stuff here, so I apologize. I know that I’m not going to be able to get to everything because we’re running close on time, but let’s try and hit a couple more questions here.

All right. What if a previous landlord declines to provide rental history? It’s a good question, Stanley. That’s why I’d say lean on this as one thing in your repertoire, but use other things. Use your scientific method of pulling all the same reports for each person and then making a decision from there. Sometimes landlords and tenants don’t get along, and they’re not eager to help the tenant move on. It’s unfortunate, but it happens. So if previously a landlord is unwilling to talk to you, or you just can’t get a hold of them, I would not personally hold that against the applicant. Sometimes that’s outside of their control, but I would look at other features and other bits of how they meet with my criteria. Okay. Does the scheduling tool work if the tenant? Yes. You can use the scheduling tool during the marketing phase, during the screening phase.

Really, the goal is just to get somebody in there to make sure that they can take a look at your property, and that’s a great way to get to know them and see if you want to vet them further and have them pay that application fee. All right. Okay. Deb asked, when should first month’s rent and security deposit date be collected? What if they applied and were accepted months in advance? Not sure that will happen again.

I have never heard that happening, Deb. That’s a great question. I’ll answer your first one because that one I have more understanding of.

If you’ll do me a kindness, please fill out this quick poll while I hit these last few questions. But you should be collecting the first month’s rent and the security deposit when you are signing the lease, or typically that’s what we see, right? Either you have a lease signing date set and you have the due date for all of the payment a little bit before then, or more commonly, you have everything due on the day that they are signing the lease. That would be my recommendation. I don’t know how to tackle that application and were accepted months in advance, so I apologize.

I’ve never seen that happen. All right. Okay. Who should complete the screening tool? Landlord or renters? I went in last night to test and did not have all of the information for renters. What I would do, Brandy, is make sure you go in there and set your availability. Once you do that and you work when you’re available, then you can send out the link and have tenants apply and put in time slots that they can come by and see the… Oh, I’m sorry.

I was talking about the showing tool. Who should complete the screening tool? That should be your renters, right? Typically, with us, you just need their name and I believe their email address, and then we send them the information so that they can fill it out. Once they fill it out, we run it through TransUnion and we pass the information to you, so it should be the renters doing that, the applicants.

Instead of asking for a 1099, can I call the bank on the check to verify if it’s valid? Hmm. Gloria, that’s a good question.

I… You could give it a whirl. I don’t think that that would be violating anything. I don’t know if the bank would be able to give you that information, though. And if you’re just getting checks, again, I don’t know. I don’t think I have enough context for that one to help.

I don’t think you’d be doing anything wrong by calling the bank, but I don’t know if that would give you insight into this person’s consistent financial history or financial health. All right. Okay. For any of the reports archived for the landlord while there is an active lease through TurboTenant, that is a great question. I believe the answer is yes, but I don’t want to lead you astray, so what I recommend, an anonymous attendee, is to reach out to our fantastic support team, because they will have more information than this silly mug right here. So if you want to reach out to support and you have any questions about the functionality of our screening reports or of our scheduling showing feature, their email address is support at TurboTenant.com. You can also use the chat feature within your account to chat with them live.

They are really fast, and I love talking to them, so I know you will, too. Okay. Mary Ray Kate said, I did not use first come first serve was I in violation? Hold on.

I think there’s more to this. I own a condo where the unit below mine is occupied by drug dealers. I had two applicants who are both single women with good credit scores and good references. I picked the 40-year-old instead of the 22-year-old because I felt the younger woman would be more freaked out by the stream of street people who come to the unit below. So I understand why you made the decision you did, Mary, but yes, you are in violation because you really should be accepting the first applicant who meets your criteria. If they’re comfortable applying for your unit, then it’s not up to you to decide who is going to have the better reaction to being there. It’s really up to the applicant, which I say with so much love and respect.

I can understand why you didn’t want this younger woman to be scared, but if she was a better fit and she gave you the application first, you should have gotten with her. All right. Gang, we are getting close to time. Okay. Anonymous, you’re asking about the… Oh, Jonathan’s on it. Okay, let’s see. All right. Sorry, there’s so much going on here and I want to try and hit as much as possible. Okay.

Matt, I see your question. I would highly recommend reaching out to our support team. Again, I’ll type it in the chat. Support at TurboTenant.com. Is there email address? You can also reach out to them via chat. They’re going to be able to troubleshoot anything you’re seeing.

The notification, way better than I can. Okay. In pre-screening, can you ask if they’ve ever been evicted?

Nancy, yes. You can ask. They are going to self-report an answer and then you can find a… You can pull the screen in your report if they get to that point and see what pops up there as well. That would be my recommendation.

You can ask them, but then also make sure that you are doing your due diligence with it. Okay. We are over time. Guys, thank you so much for being here today. It’s always such a pleasure to chat with you and to talk about everything under the sun when it comes to land-lording. I hope you have a wonderful rest of your day. Can’t wait to catch you at the next one. Bye, friends.