How To Create a Tenant Scoring System

When it comes to choosing the right tenant, it can be difficult to know where to start. There’s a lot of information about every applicant to consider.

In order to effectively take this information and use it to figure out which applicant would make the best tenant, you should create a tenant scoring system.

A tenant scoring system does a few things:

  • Helps you make an objective decision about whether an applicant meets your standards for tenants
  • Helps you pick between multiple tenants
  • Helps expedite the decision-making process
  • Helps you avoid getting into trouble with Fair Housing laws

Once you have obtained all the relevant information you need from an applicant (with effective tenant screening and property management software), it’s time to begin making a useful scoring system.

Step 1: Establish Your Primary Goals

Understanding your primary goals will ensure that your scoring system is intentional and practical. Typically, you will have two primary goals:

Goal #1: Comply with Fair Housing regulations

Goal #2: Pick the most qualified applicant to be your tenant

Step 2: Consider Which Factors Will Allow You To Achieve Your Goals

Now it’s time to lay out factors for each goal that you will include in your scoring system.

Goal #1: Comply with Fair Housing regulations

Fair Housing laws protects against discrimination toward certain demographics including race, color, religion, sex, familial status, handicap, or national origin.

When screening applicants, you’re allowed to require proof of identity, employment, and income. You’re also allowed to gather applicants’ screening reports, such as credit reports and background checks.

To protect yourself from discrimination lawsuits, you need to create a standardized scoring criteria based on this information you’ve gathered to assess whether an applicant is qualified. If you apply this scoring criteria equally to all applicants, you are working within Fair Housing regulations.

Goal #2: Pick the most qualified applicant to be your tenant

After understanding what kind of criteria is legal to include with Fair Housing practices in mind, you should draft up a list that correlates with a tenant’s qualifications.

For instance, to ensure that a tenant will consistently pay the full amount of rent on time, here are some criteria to consider:

  • The applicant has stable, verifiable employment that pays three times the monthly rent.
  • The applicant doesn’t have any considerable outstanding debts or collections.
  • The applicant’s credit report demonstrates financial responsibility.
  • The applicant has a history of paying rent on time.
  • The applicant doesn’t have a history of evictions due to not paying rent.
  • The applicant hasn’t been taken to collections for not paying of rent.

In order to ensure that a tenant will follow the terms of the lease agreement, you should make sure:

  • The applicant doesn’t falsify any application information.
  • The applicant hasn’t been previously convicted of crimes  harmful to people or property.
  • The applicant doesn’t have a history of lease violations, noise complaints, or evictions due to lease violations.
  • The applicant’s landlord references would rent to her again.

Step 3: Create Your Comprehensive Tenant Scoring Sheet

After you’ve drafted all your criteria, it’s time to make an organized scoring sheet. This scoring sheet will act as a checklist, which you will use to evaluate every single applicant’s information that you’ve gathered from screening reports.

Every time an applicant meets one of your criteria, you’ll give them a point. Whichever tenant has the most points at the end is your most qualified applicant. Make sure to keep good records, whether that be hard copy or online, of your scoring sheets.

Bonus Step: Have an Attorney Review Your Tenant Scoring System

If you’d like to be extra cautious regarding Fair Housing laws, it might be a good idea to have a local attorney who specializes in property law look over your scoring sheet.

ConclusionTenant screening is an essential part of property management, as it helps you find the best tenants possible and avoid bad ones. A thorough tenant scoring system will make this process easier and more objective while ensuring that you don’t run into any legal trouble.

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