How to Find Good Tenants (without Breaking Fair Housing Rules)
Naturally, as a landlord, you want to find the best, most responsible tenants possible. But actually doing that? Well, that’s harder than it looks — especially if you don’t want to appear (even accidentally) in violation of fair housing rules.
About Fair Housing Rules
Fair housing policies are designed to protect Americans from unfair discrimination in obtaining housing, and they bar landlords and property managers from using race, color, national origin, religion, sex, familial status, or disability in making tenant decisions. Some states also have individual fair housing rules that must be followed, so make sure you’re aware of any specific laws that might exist in your region before seeking out a tenant.
Finding a Tenant without Violating Fair Housing Rules
If you want to remain in compliance with fair housing rules, it’s important that your tenant screening process is conducted in a professional, business-like manner and that you use the same consistent approach with each and every prospect, regardless of their income bracket, age, or other demographic details.
Specifically, you should:
- Conduct a credit check. Always conduct a credit check on your potential tenants, and be sure to use the same credit reporting agency every time. You’ll want to look at the person’s credit history (how often they’ve paid on time or late), as well as their overall score.
- Have set income requirements. Establish a base amount that tenants must make in relation to your rent price. Do they need to make two times the rent in a month? Three times? Set a threshold and stick with it. Be sure to verify their employment and income, too.
- Ask for references. Get references for the tenant’s past landlords and follow up with each one. Did the tenant pay rent on time? In what state did they leave the property? Establish a checklist for these conversations, so you can evaluate each tenant consistently and equally.
- Do a background check. You can’t deny a tenant for just any past criminal charge (and the ones you can deny them on depend on your exact state), but in most cases, you can justify rejecting someone if they have a violent crime or drug violation on their record. If you’re unsure if something on a background check qualifies for denial, speak to an attorney before making your decision.
That goes for any question you might have in the tenant screening process, actually. If you’re ever unsure or worry you may be violating fair housing rules, consult an attorney well-versed in local housing law.