One of the most important decisions when renting out a property is not the asking price. It is who you choose as your tenant. With a good tenant, long-term renting can be predictable and stress-free. However, a poorly assessed rental relationship can later lead to payment problems, disputes, or even significant financial losses.
But how can you tell whether a prospective tenant will actually be reliable?
You cannot, and do not need to, know everything about someone who wants to rent a property. The goal is not to investigate their entire personal background. Instead, the aim is to assess whether they are likely to meet their contractual obligations, how they plan to use the property, and whether they appear to be a reliable partner. If a landlord does not want to manage the entire process alone, professional property management can also help organize tenant sourcing and screening.
In this second part of our three-part tenant selection guide, we look at what is worth checking before renting out your property. We cover income, employment, previous rental history, references, personal conversations, and the types of information you should actually request.
Tenant screening: what do you really want to know about the tenant?
The first step in tenant screening is not requesting documents. Instead, start by defining which risks you want to assess.
A landlord will typically want to know whether the applicant:
- can regularly pay the rent;
- plans to stay for a longer period;
- will use the property appropriately;
- will comply with the rental agreement;
- is likely to cooperate if problems arise;
- is actually the person who will move in and sign the agreement.
This matters because tenant screening should not become unnecessary data collection. Every question should have a clear purpose in relation to the tenancy.
At Homever, tenant screening is also based on considering several factors together. Financial stability, previous rental experience, references, and the personal conversation can all play a role.
Tenant income: how much do they earn, and how will they pay the rent?
One of the most important questions when renting out a property is whether the tenant can consistently afford the monthly rent and related housing costs. However, this does not necessarily mean making a decision based on a single payslip.
Instead, it is worth looking at the bigger picture.
For example:
- What regular income does the tenant have?
- Are they employed or self-employed?
- How long have they been in their current job or business?
- How stable does their income appear to be?
- How does the monthly housing cost compare with their income?
- Is there any circumstance that could affect their ability to pay in the near future?
Homever’s previous professional material also highlights income verification and financial stability as important parts of tenant screening.
The highest-income tenant is not necessarily the best choice
This point is worth emphasizing.
The landlord’s goal is not to choose the applicant with the highest income. Instead, the rent should be realistically affordable, and the tenant’s ability to pay should appear predictable. For example, a tenant with a stable job and predictable income may, in some cases, be a better fit than an applicant with a much higher but fluctuating income.
Tenant checks: what should you know about their employment?
Employment alone does not guarantee that the rent will arrive on time every month. Nevertheless, it can provide useful information.
It may be worth clarifying the following.
Where does the tenant work?
The exact employer’s name is not necessarily the most important detail. Instead, consider the type of work they do and whether their employment appears stable.
How long have they worked there?
A newly started job is not automatically a problem. However, it may represent a different situation from employment that has continued for several years.
Is the employment fixed-term or permanent?
This can provide some insight into predictability. However, it should not be used to draw far-reaching conclusions on its own.
Where does the income come from?
The situation may naturally differ for self-employed tenants, people working abroad, or applicants with multiple income sources.
The key point is not to predict a tenant’s future behavior from one piece of information. Instead, consider several relevant factors together.
Tenant screening and previous rental history
If someone has rented a property before, their previous experience can provide useful information. Of course, not every tenant has several years of rental history. For a young person renting their first home, someone starting their career, or a foreign tenant who has recently moved to Budapest, this can be completely normal.
If previous rental experience exists, it is worth asking:
- Where did they live previously?
- Approximately how long did they live there?
- Why are they moving?
- What was their relationship with the previous landlord?
- Was the previous tenancy completed without issues?
Why is the reason for moving relevant?
This is one of the simplest yet most useful questions. Someone may be moving because they started a new job, need a larger home, are moving in with their partner, or have another understandable reason.
On its own, this is neither a positive nor a negative sign. Instead, the answer is useful as part of the overall story.
However, if it is difficult to get a clear answer about the move, or the story contains several contradictions, further questions may be appropriate.
Tenant references: should you speak to the previous landlord?
If a tenant has a reference from a previous landlord, it can provide useful additional information. For example, a reference may help establish how the previous rental relationship worked. It can also reveal whether there were issues that could be relevant to the next landlord.
A short conversation could include questions such as:
- Did the tenant pay the rent on time?
- Did they keep the property in good condition?
- Did they follow the rental agreement?
- Was communication with them appropriate?
- Did the move-out process go smoothly?
- Is there anything the new landlord should know?
IMPORTANTLY, references should only be handled appropriately and in accordance with applicable personal data rules. Tenant screening is not about collecting every piece of information imaginable about an applicant.
What can a personal meeting tell you about a prospective tenant?
In many cases, a personal conversation can be just as important as documents. However, this does not mean you can determine within a few minutes whether someone will be a good tenant. There is no reliable method for doing that. Instead, the conversation allows the landlord to understand the applicant’s plans. It also helps clarify questions that are relevant to the rental.
For example:
- When would they like to move in?
- How long do they plan to stay in Budapest?
- How many people would move in?
- Do they have a pet?
- Do they smoke?
- What kind of lifestyle do they have?
- How important is a long-term rental to them?
- What questions do they have about the property and rental agreement?
Of course, not every question is relevant to every property. The goal is to clarify circumstances that materially affect the use of the property and the tenancy.
Does the tenant’s personality matter, or should you focus on rental criteria?
During tenant screening, it is easy to rely too heavily on personal impressions.
“Seemed nice.”
“Was well dressed.”
“Spoke very convincingly.”
“Did not seem like a problematic person.”
These are natural human impressions. However, they are not enough to justify a tenant selection decision on their own. A much better approach is to define several objective criteria in advance. Then, apply the same criteria to every applicant.
| Criterion | What should you assess? |
|---|---|
| Financial capacity | Stable and verifiable income |
| Employment | Type and stability of employment or business |
| Rental history | Previous housing experience |
| Reference | Feedback from a previous landlord |
| Property use | Who will use the property and how |
| Planned rental period | Several months or several years |
| Communication | Clear and cooperative communication |
| Contract | Acceptance and compliance with the agreed terms |
This provides a much more objective basis for the decision than a first impression.
What documents can a landlord request from a tenant?
This is an area where particular care is important. Naturally, a landlord wants to protect their property and assess the tenant’s ability to pay. However, this does not mean they should request every type of personal information imaginable. Data processing should have a specific purpose and remain limited to what is necessary. Under applicable data protection rules, only personal data that is necessary and appropriate for the given purpose should be processed.
Therefore, before requesting any document, ask yourself:
Why do I need this information in relation to the tenancy?
If there is no reasonable answer, the information may not need to be requested.
Proof of income
Proof of income can be relevant when assessing financial capacity. However, the type of information requested and the way it is processed require careful consideration.
Proof of employment
In certain cases, employment documentation can help assess whether the tenant has a regular source of income.
Reference
If the tenant has a reference from a previous landlord, it can provide useful additional information.
Proof of identity
Identification is naturally required when entering into a rental agreement. However, lawful data processing and avoiding unnecessary information remain important here as well.
It is worth remembering that tenant screening and data collection are not the same thing. Targeted and justified checks are much more useful than collecting a large file of documents.
Tenant checks: what should you avoid?
Good tenant screening does not mean trying to find a reason to reject every applicant.
Instead, landlords should be aware of several common mistakes.
Relying only on intuition
Personal chemistry can matter in a relationship. However, it does not replace checking financial and rental-related factors.
Looking only at income
A high income alone does not guarantee appropriate property use or cooperative communication.
Automatically rejecting certain tenant types
As discussed in the first part, being a family, student, single person, or foreign tenant does not by itself determine whether someone will be a good or bad tenant.
Requesting too much personal information
More data does not necessarily mean greater security. In fact, unnecessary data processing can create additional risks.
Failing to ask about previous rental history
If someone has rented a property before, their previous experience can provide valuable information.
Tenant screening step by step
If you want to keep the process simple, an effective tenant screening process could look like this.
1. Initial conversation
Start by clarifying the basics during the first contact. Ask when the applicant plans to move, how many people will move in, and how long they plan to stay.
It is also useful to establish whether the basic property conditions suit them.
2. Property viewing
The personal meeting provides an opportunity to clarify additional questions.
3. Financial background assessment
Assess, in a relevant and proportionate way, whether the tenant is likely to be able to cover the monthly costs.
4. Checking rental history
If a previous landlord reference is available, it can help inform the decision.
5. Agreeing on contractual terms
The rent, security deposit, utilities, property-use rules, and move-out conditions should all be clear.
6. Making a decision based on predefined criteria
The question should not simply be, “Do I like this person?” Instead, ask whether the available information shows that the applicant meets the landlord’s predefined requirements.
The exact content of the rental agreement is also an important part of this process. Contractual terms can play a significant role if disputes arise later. For this reason, it is worth reviewing the subject separately in Homever’s guide to rental agreements.
Property management: why can professional tenant screening help?
Tenant screening may look simple from the outside. However, it can require considerable time and attention when renting out a property. You need to answer enquiries, arrange appointments, conduct viewings, assess applicants, verify relevant information, and eventually sign a contract with the appropriate tenant. This can be particularly difficult if the landlord does not live in Budapest. It can also be challenging for owners with several properties or limited time for day-to-day rental management.
One advantage of professional property management is that tenant sourcing and screening can become part of an established process. According to Homever’s own description, its rental process considers factors such as applicants’ financial stability, employment, and personal circumstances. After screening, the company selects a tenant it considers suitable.
If you want to understand what full-service property management in Budapest involves in practice, it is worth reviewing the tasks that professional property management can cover. These may range from finding tenants to ongoing communication.
Tenant selection: you do not need to find the perfect tenant
The purpose of tenant screening is not to predict with 100% certainty how someone will behave a year from now. There is simply no such guarantee. Instead, the goal is to make an informed decision based on relevant available information. This means avoiding decisions based solely on a short personal impression or a well-written introduction message.
Therefore, consider the financial situation, previous rental experience, planned rental period, property use, and communication together.
In the next part, we will look at another important situation. What changes when you want to rent out a property in Hungary as a foreign owner? We will also examine which tenant screening factors deserve attention, how the process can be managed remotely, and why professional property management can be particularly useful in this situation.
Frequently asked questions about tenant screening
Focus primarily on information that is relevant to the tenancy. This includes financial capacity, income stability, previous rental experience, the planned rental period, and how the property will be used.
A landlord can request appropriate documentation to assess financial capacity. However, data protection rules should be considered, and only necessary information should be processed.
Assessing financial capacity can be relevant for a landlord. However, any documents requested and processed should be appropriate for the specific purpose and necessary for the assessment.
Yes, if the tenant has a reference from a previous landlord, it can provide useful additional information. However, data protection considerations should also be taken into account when handling the reference.
Ask about the planned moving date and rental period. You can also discuss the number of occupants, employment or studies, and other relevant circumstances affecting the use of the property.
Employment and the source of income can help assess financial capacity. However, the employer’s name alone does not determine whether someone will be a good tenant.
Previous rental history can show how long the tenant lived in their previous property. It may also provide information about their relationship with the landlord and any issues that could be relevant to the new tenancy.
Assessing a tenant’s financial situation can be relevant. However, personal data cannot be collected without limits. Data processing should be lawful, purpose-specific, and limited to what is necessary.
Personal impressions can be part of tenant selection. However, it is not advisable to rely on them alone. Instead, consider personal impressions alongside objective criteria that are relevant to the tenancy.
Relevant documents can sometimes help with tenant selection. However, there is no need to request every type of personal information imaginable. There should always be a clear reason why the information is necessary.
There is no single decisive factor. Financial capacity, previous rental experience, the planned rental period, property use, and communication can provide a more useful picture when considered together.
The right tenant can affect future payment discipline, property condition, and cooperation with the landlord. Therefore, tenant screening is an important part of the professional property management process.
