Tenant Screening Tips: Finding Reliable Renters in LA's Competitive Market - Article Banner

Los Angeles is known for its competitive and expensive real estate market, and the rental values in and around the city have climbed even higher in the last couple of years. There are a lot of tenants out there looking for homes, and to enjoy a profitable and successful investment experience, you want to make sure you’re finding the best qualified tenants and attracting them to your own property

With so many tenants clamoring for homes, how do you ensure that you’re choosing the right tenant for your property? 

You know because you screen them well. As an LA landlord or real estate investor, it’s imperative to find reliable renters who will pay their rent on time, take care of your property, and be respectful of their neighbors. You want a resident who pays rent on time, understands the expectations in the lease agreement, and takes care of their responsibilities in a way that’s respectful and communicative. 

As professional property managers in LA, we have a process in place that’s fair, rigorous, and consistent, as well as compliant with all state and federal fair housing laws. 

Today, we’re discussing some tenant screening tips to help you find the right renter in LA’s competitive market.

Establish Qualifying Criteria for LA Rentals

Before you begin screening any applications, you want to create a set of qualifying rental criteria for all applicants. These are the standards against which every application is screened. 

Qualifying rental criteria reflects what you are looking for in a tenant. Provide it to all of your potential applicants so they can decide for themselves whether they’re likely to pass your screening process. All applicants know what’s required in order to be approved for the property, and it also demonstrates that you’re screening each application consistently and against the same standards. Written rental criteria is the best defense against any claims of discrimination or fair housing violations. It holds you accountable to your own process. 

Finding LA Tenants Without an Eviction History 

We recommend that you run a nationwide eviction check on any potential applicants. Your rental criteria may indicate that you won’t rent to anyone with a prior eviction. Not all evictions are created equal, of course. If you’re looking at an applicant who had an eviction 20 years ago and has spent the last two decades re-establishing a solid rental history, that tenant will probably work out fine. But, a tenant who has been evicted twice in the last five years is a bit of a risk.

Evaluating Credit Scores and Credit Reports

A basic credit check is part of any screening process, and if you want to identify the best tenants for your property, you’ll want to do more than simply glance at the credit score. Evaluate the entire credit report to get an idea of how the applicant handles debt and bill payment. 

Remember that credit can be a touchy subject for people, especially as a lot of people continue to recover financially from the pandemic and a year or two of serious inflation. You may find medical debt, student loan debt, and other credit blemishes that don’t necessarily mean you’re looking at a risky tenant. Decide where your standards should settle, and then decide what will work for you when it comes to tenants and their credit. 

We are not looking for perfect credit, necessarily. But, we do know what credit red flags look like, and we’re eager to avoid tenants who have too many of those. We don’t want to see money owed to other landlords and apartment buildings, for example. We don’t want to see judgments against the tenant for money owed to electric companies or utility bills in collection because they weren’t paid. A good tenant will take their housing bills seriously and prioritize their payment. 

Income Verifications and Tenant Screening 

Perhaps the most important part of the screening process is verifying income. Your most reliable renters will be able to pay the rent on time, and in order to do that, they have to have enough money coming in every month. 

Always screen for tenants who can afford to pay rent on time every month. 

Best practices in LA property management say to look for income that’s at least three times the monthly rent. That’s a comfortable place for income to fall. 

With rental rates climbing, this may be getting more and more difficult for tenants. It’s not always an easy benchmark to meet. If there are roommates moving in or two adults who earn income, you’ll want to combine what’s earned to meet the necessary requirements that you have set. Consider the income earned by every adult in the household, and ask for proof of that income by collecting pay stubs, tax forms, or bank statements. 

Verifying an Applicant’s Rental History 

Tenant HistoryReliable renters probably have a record of being reliable renters, and you want to make sure you’re checking that out. Verifying rental history is an important part of the screening process, and we recommend that you collect some references from current and former landlords. 

The application our prospective tenants complete will request contact information for at least two landlords the tenant has rented from previously. These references can tell us a lot about what it was like to rent to the tenant we may be considering. Typically, our reference check includes sending them an email or making a phone call, and some of the questions we ask include:  

  • Did the tenant pay rent on time every month? If it was ever late, how quickly did the tenant catch up? 
  • Was there any property damage during the lease term?
  • Did the tenant provide proper notice before moving?
  • Did the tenant have pets? Were there any issues with behavior or messes?
  • Did the tenant receive a full security deposit refund?
  • Would you rent to this tenant again?

Tenants who have not had good experiences in rental properties or with former landlords will try to hide their rental history. Make sure you’re prepared to get to the truth and to talk to actual property owners or property managers

Screening for reliable renters does not have to be difficult, especially when you’re working with LA property managers who have done this before. If you’d like some help, contact us at Earnest Homes.