How to screen a tenant, and what skipping it costs
Full screening costs around $180. One bad tenancy costs around $14,300. That ratio is the entire argument.
The short answer
Screen every applicant the same way, on income, references, identity and payment history, and record the reason for every decision. The cost of screening is trivial against the cost of one bad tenancy, and consistency is what keeps the process both effective and lawful.
The formula
required gross income = monthly rent x income multiple (commonly 2.5 to 3)
cost of a bad tenancy = unpaid rent + eviction costs + repairs + re-letting void
screening cost = per-applicant check cost x applicants considered
The income multiple is a threshold, not a score. It is there to make the decision consistent, which matters legally as much as commercially.
Worked example
A $2,150 a month property, screening four applicants at $45 each:
required gross income at 3x = 6,450 a month
screening cost = 4 x 45 = 180
a bad tenancy: 3 months unpaid = 6,450
eviction 2,500 · repairs 3,200 · re-let void 2,150
total = 14,300
screening as a share of that = 180 / 14,300 = 1.3%
Screening costs 1.3% of what one bad tenancy costs. It does not have to work often to be worth doing.
What actually predicts a good tenancy
Payment history with a previous landlord, obtained directly rather than from a letter the applicant supplies. A reference on headed paper proves nothing about who wrote it.
Stability of income rather than its size. A modest income that has been steady for three years is a better signal than a large one that started last month.
Length of previous tenancies. Someone who has stayed three years twice is likely to stay again, and given what a turnover costs, that is worth real money.
Consistency is a legal requirement, not just good practice
Applying different criteria to different applicants is how discrimination claims begin, whether or not there was any intent. Written criteria applied identically, with the reason for each decision recorded, is the protection.
It is also the only way to know your criteria work. If every decision is a judgement call, you can never look back and see which signals actually predicted anything.
Rules on what you may ask and what you may consider differ substantially by jurisdiction and change. Check yours rather than copying a process from an article, including this one.
The applicant who almost qualifies
This is where most landlords lose money, because the property is empty and the applicant is standing in front of them. A month of void costs $2,150 and a bad tenancy costs seven times that, so the pressure to say yes is real and pointed the wrong way.
Where the shortfall is income rather than history, a guarantor is the usual middle path and it should be screened as thoroughly as the tenant. Where the shortfall is payment history, there is rarely a version that ends well.
What this leaves out
- Costs and multiples are illustrative and vary widely by market. In high-cost cities a 3x multiple excludes most of the market and 2.5x is common.
- Eviction cost and timeline vary enormously by jurisdiction, and in some the figure above is optimistic by a wide margin.
- Not legal advice. Screening is one of the most regulated parts of letting and local rules take precedence over any general process.
Common questions
- What income multiple should I require?
- Three times monthly rent is the common benchmark and 2.5 is normal in expensive cities. What matters more than the number is applying the same one to everybody and being able to show that you did.
- Is a credit check enough on its own?
- No. A credit file shows debt behaviour and says nothing about whether someone paid their last landlord on time or left the property in good condition. The previous landlord reference is the single most predictive check and it is the one most often skipped.
- Should I accept a tenant with a guarantor instead of screening?
- A guarantor supplements screening rather than replacing it. Enforcing against a guarantor is slow and expensive, so the guarantor is a fallback rather than a reason to lower the bar.
Spreadsheets that do this
The formulas above, already built and checked — so you fill in your numbers rather than the arithmetic.
Related guides
Last reviewed 22 August 2026