Bad tenants—the ones who make late payments, are disruptive towards neighbours, and neglect property upkeep—are a property owner’s worst nightmare. But fortunately, a thorough tenant screening checklist will help you weed out these types of tenants from the get-go.
By following the 7-step checklist outlined below, which is based on our experience having helped thousands of Canadian property owners find and sign the right tenants, you’ll significantly improve your chances of identifying and signing stellar, reliable tenants.
However, before we get to the checklist, it’s important to first understand the legalities of tenant screening.
What you can and can’t legally ask in your tenant selection process
Good tenant screening doesn’t just lead you to the perfect tenant; it does so without any discrimination along the way.
For example, based on the Ontario Human Rights Commission's policies on housing, the Ontario Residential Tenancies Act (RTA), and the Ontario Human Rights Code, you can only ask prospective tenants about:
- Rental history (although if a person does not have a history of renting, this legally cannot be used against them)
- Permission to run credit checks and credit references
- Their name, address, and date of birth (in order to conduct a credit check)
- Information surrounding their passport, driver’s license, source of income, and expenses for the purposes of:
- obtaining a more detailed credit report
- ensuring the credit check is being done on the correct person and not someone with the same name and date of birth
You can’t ask a prospective tenant about:
- Their social insurance number
- If they’ve ever been part of a dispute that went to the Landlord and Tenant Board
- If they are on social assistance
- Their age, disabilities, religion, sexual orientation, place of origin, family status, or gender expression
For information on what non-Ontario based property owners can and can’t ask tenants, here is a list of Useful Resources for Property Owners in Canada by Province.
Taking into account these do’s and don'ts, now let’s get to building an effective tenant screening checklist.
The 7-step tenant screening checklist
At a glance, here is your complete checklist for conducting an effective and thorough tenant screening:
- Define what you’re looking for in an ideal candidate
- Make your criteria clear in your rental listing
- Pre-screen potential tenants
- Invite applicants who pass pre-screening to view the unit
- Send out your application forms
- Verify applicant identity and information
- Determine if applicants can afford the rent you’re charging
Below is a deeper dive into each of these steps.
1. Define what you’re looking for in an ideal candidate
What is an “ideal tenant” in your eyes? Before anything else, you’ll want to define your ideal tenant as it relates to:
- Income: How much does your ideal tenant make? Do you require a guarantor below a certain income level? Below what household income level is an automatic 'no' for you?
- Rental history: A consistent history of renting might be something you prefer.
- Future plans: Are you looking to rent your property out for a short period of time or long term?
- Move-in date: When do you want your tenant to move in? If applicable, when do you want them to move out?
- References: Do employers and previous landlords speak highly of your tenant?
- Pets: While navigating preferences around renters with pets can be tricky, you may prefer tenants without pets.
- Lifestyle: Are you looking for working professionals, students, families, or other kinds of tenants? Although you can't discriminate against specific types of renters, you can highlight aspects of your listing that would appeal to them.
With your ideal tenant defined, taking the right actions to find them will be much easier.
2. Make your criteria clear in your rental listing
Most people screen rental listings without fully reading them, so it’s up to you to make sure they walk away with the most important information to them. This means placing the most important and eye-catching details at the top of your listing, ideally in 2-3 sentence paragraphs, bullet points, or any other format that is easy to read.
There’s a fine line to balance here, as you want to simultaneously draw people in with standout features about your property (“recently renovated kitchen”), while also highlighting the most important details that your ideal tenant cares about.
By emphasizing these important listing details, you can improve your chances of only qualified tenants (a.k.a. your ideal tenants) reaching out.
For more help in this area, read our article on how to make a listing that stands out to renters.
3. Pre-screen potential tenants
In addition to a well-formatted listing, setting up a pre-screening process is another important part to finding a qualified renter.
Someone may seem like a great potential tenant during their initial inquiry to you, but speaking with them over the phone or getting them to fill out a pre-screening questionnaire will help you understand if they are qualified enough to move them forward in the leasing process.
If after the pre-screening you turn away a renter realizing they are not a good fit, you can take comfort knowing that you saved both your and their time.
Here are some questions you can legally ask during your pre-screening:
- What’s your income?
- Have you rented before?
- Are you employed?
- Where do you work?
- Who will be living with you and what are their names?
And some questions you legally can’t ask:
- Are you pregnant?
- Are you married?
- What is your religion?
- How old are you?
- Do you smoke? Worth noting: you can’t ask someone if they smoke, but you can still include in the lease agreement that the property being rented is non-smoking.
Keep in mind that if during your pre-screening you collect information through other means (i.e. social media profiles) without someone’s knowledge, you must be able to prove:
- that the collection of data falls within PIPEDA’s rules for collecting data without consent and
- why you couldn’t have found the information in a manner that is less intrusive
Rhenti's digitally automated pre-screening questionnaire saves you time and effort so you can spend it on the most important parts of the leasing process.
4. Invite applicants who pass pre-screening to view the unit
If a tenant passes the pre-screening, the next step is an in-person viewing of your property.
This is an opportunity to get to know potential tenants better, field their questions, and look for any signs that make or break their case for being a good tenant in the future.
When you speak with them, you can learn more about topics covered during the pre-screening. For example, you might have learned during the pre-screening that they work in marketing. Ask more about their employer and what their work entails.
Or they might have mentioned that they’re looking to move immediately. Now, in-person, you can dig deeper into the reason why. These kinds of conversations can unearth potential problems such as a history of eviction.
You can also observe their actions throughout the tour. Did they arrive on time? How respectful were they to you, your property, and others (such as current tenants)? You can also evaluate the types of questions they had prepared to ask you to understand what types of things matter to them.
5. Send out your application forms
The application stage can tell you more than what is asked on the form itself.
Yes, it's important to gather tenant details in the actual application form (remember there are legal limits around what you can ask a tenant), such as rental histories, payment stubs, references, and credit scores, but it also tells you about tenant promptness and reliability.
If a renter tells you that they’ll send you their application the day after the showing, do they follow through? Do they communicate if they think they will be delayed in applying? Treat the renter application process as any Manager would treat their hiring process. Promptness, eagerness, and communication are all positive signs. Successful landlord-tenant relationships are based on reliability, and signs of unreliability early on can potentially bleed into things like late rent payments down the road.
Send digital applications to promising renters easily when you list with Rhenti. Access all applications and detailed renter profiles in your account. Best of all, you can approve, decline, request a deposit, or begin drafting the lease within seconds!
6. Verify applicant identity and information
In an ideal world, you would take the application information that renters provide as truth. But for something as important as renting out your most valuable asset, verifying this information is necessary.
To start, you’ll want to perform a credit check. To ensure that you’re performing a credit check on the right people, you’ll need government-issued IDs from tenants which include:
- driver's licenses
- provincial health cards
- permanent resident or refugee cards
- certificate of Indian status cards
- or passports
Beyond this, it’s important to verify employment and income, verify rental histories by contacting previous landlords, and consider running a criminal background check.
It is important that landlords and property managers pull credit checks themselves, using services, such as Rhenti. It is best practice to avoid accepting credit checks from applicants that were pulled by themselves as use of forged/fake credit check documents are on the rise by deceptive renters.
7. Determine if applicants can afford the rent you’re charging
Now that you’ve verified an applicant’s income, the final step is to calculate their rent affordability.
The main goal is to determine if an applicant can afford the rent you're charging. For this reason, many property owners follow the guideline of choosing tenants who spend no more than 35% of their gross income on rent. This is called the rent-to-income ratio.
For example, if you’re charging $2,000 per month in rent, a financially qualified tenant is one earning at least $5,715 gross income per month. Of course, the 35% guideline has become increasingly unattainable in cities like Toronto where salaries have not kept pace with the cost of living - thus pushing landlords to use their best judgement. In general, a low rent-to-income ratio is ideal.
That’s it! By following this tenant screening checklist, you can confidently choose the best tenant for your property.
For more help with attracting high-quality applicants, sign up for Rhenti's industry-leading leasing software today!
The blog posts on this website are for the purpose of general introductory information. They can’t serve as an opinion or professional advice. Speak to a professional before making decisions related to your circumstances.