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Written by Sapphire of the Savvy Women Group

Establishing tenant selection criteria can be one of the most confusing areas of operating rental property for many people. On one hand, you want to make sure you choose the most responsible tenant possible; a tenant who will pay their rent on time and one who can be relied upon not to destroy your property. Yet, at the same time you must make sure that you abide by fair housing laws.

Before you begin renting out your property it is a good idea to sit down and determine the criteria you will use to choose the best tenant. Without guidelines, you will have no choice but to rely on your instinct to choose the best tenant. Your Rental investment needs to be viewed as a business, make decisions that are best for the business and not based on personal feelings.



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First always make sure you notify prospective tenants that you use a fair system to make your decision.

Ideally, it is best to include this type of statement on all rental applications. For example, you might state “Our policy is to rent our units in compliance with national, governmentand local fair housing laws.”

If you are new to operating investment rental property, you may not be mindful of fair housing laws. Be sure to consult your country’s fair housing office to determine those guidelines which you must follow. For free access to helpful tips in choosing the right TYPE of rental property click here.

With our All Things Property Pack, SWG can help you translate the jargon of legal compliances into actionable steps to ensure maximum profits for your investmentbusiness.


Beyond fair housing laws,it is important to make sure you establish criteria that is concrete, which you will use to judge all potential applicants.

Common practice includes:

Require that the applicant provide verifiable identification. You may require the applicant to present a photo ID with their application which you can make a copy of. This type of requirement is valid because you may need it in the future in the event you need to describe adult occupants of the unit. If someone co-signs the application, it is also a good idea to obtain identification for them as well.
Information regarding applicants’ ability to pay the rent. This is valid as it helps you determine if the applicant has a sufficient income to rent ratio. If the applicant were applying for a loan to purchase a home, the lender would require similar information.


The general rule of thumb is to identify applicants that have a gross monthly income that is three times the amount of the rent. You can document this information by requesting copies of the applicant’s pay stubs along with their application.

If the applicant is self-employed, you might ask them to provide their last tax return in addition to three months of bank statements. If you cannot verify the applicant’s income, this would be a perfectly legitimate reason to deny their application as you have no assurance that they would be able to pay their rent.

  • Covid 19 has affected many people and their livelihoods, resulting in workershaving to be furloughed or in extreme cases, out of work. According to a report from Insidehousing, the number of their tenants using Universal Credit, doubled. Do you have a contingency if tenants cant make their payments?*
  • Check credit ratings and scores on applicants. A common practice, with the purpose to verify the financial responsibility of the applicant. The general guideline is to obtain a credit report on all applicants as well as any co-signers who are over the age of 18.


Keep in mind that you will need to receive permission to run a credit report; however, you can request this information on the rental application. Applicants with low credit scores could be legitimately denied on the basis on being unable to prove financial responsibility.



  • Check references. Typically, you should ask all applicants to provide the names and telephone numbers of individuals who can verify the applicant’s income sources as well as character references.
  • Finally, make sure you follow-up to check that the applicant has been able to successfully rent a dwelling in the past and paid their rent on time. In the event an applicant is unable to meet this requirement but does meet all other requirements you may consider requiring the applicant to have a co-signer.


Our helpful website is jam-packed with howto guides, FREE resource packs, tailored courses and more, (which you can access by clicking); all created to assist you in getting the most out of your property investments. Whether you have a small budget or are looking to skyrocket your property plans, we have something that is right for you.