Having a rental property in Arroyo Grande isn’t as simple as finding prospective tenants to sign the lease and hoping for the best. With average rents near $2,875 a month, one wrong tenant can wipe out a year’s profit in repairs, late rent payments, and stress. That’s why a thorough tenant screening process isn’t optional but survival.
In 2018, eviction filings in tracked U.S. cities hit about 7.8% of renter households, according to the U.S. Government Accountability Office (GAO). That’s roughly 7.8 filings per 100 households. Meanwhile, the most recent research from the University of Chicago suggests the typical annual rate is closer to 5–6%.
Either way, the risk is real. If you don’t want to join that statistic, you need to know the tenant screening red flags before you hand over the keys.
Town & Coastal Real Estate and Property Management screens tenants for local landlords and property owners every day. We know the patterns, the stories, and the excuses that show up right before potential tenants stop paying rent.
Key Takeaways
- With average rents in Arroyo Grande around $2,875 a month, one bad tenant can wipe out a year’s profit with missed rent, repairs, and legal bills.
- Evictions hit between 5% and 7.8% of households nationwide each year, so solid tenant screening isn’t optional for evaluating tenant applications.
- In 2025, only about 83.6% of renters pay rent consistently and on time, making it risky to rent to anyone with shaky income or a history of prior evictions.
The Red Flags You Should Never Ignore
Some warning signs in a rental application aren’t just quirks but tenant red flags. Spotting them early can save you from months of stress, lost rent, and costly disputes.
1. Poor or incomplete credit reports
A low credit score doesn’t always mean “no,” but if the report shows poor credit history, repeated late payments, or maxed-out cards, you’re looking at one of the tenant screening red flags that signal they may not pay you on time. Credit reports give you a snapshot of their financial responsibility and whether rent is a priority.
2. Criminal record or criminal history
Not every offense is a dealbreaker, but you have to pay attention to recent or serious charges. Violent crimes or property-related offenses can point to safety risks or potential lease violations. Always follow fair housing rules, but don’t ignore patterns that could hurt your property or other tenants.
3. Employment history and income concerns
Only about 83.6% of rent is being paid on time in 2025. If someone has unstable employment or shows frequent job changes, unverifiable income, or earnings well below 2.5 times the monthly rent, that’s a risk. Remember, you’re not just renting a unit but also counting on steady rent payments.
4. Negative references from current or previous landlords
Sometimes the current landlord just wants them out and won’t be honest. That’s why you should talk to previous landlords too. Look for mentions of late rent, property damage, or breaking the lease early. These are clear tenant screening red flags you can’t afford to ignore. Watch for “landlords” who are actually friends or family members, which is a common trick in rental scams.
5. Missing or inaccurate application information
When an application has missing or inaccurate information, false job titles, or questionable income claims, follow up. Rental application fraud is growing, and it’s not always easy to spot without making calls or checking documents. If they’re hiding something now, it’s rarely good news later.
6. Multiple residences in a short time
Moving a lot in a short period doesn’t always mean trouble. Job relocation is sometimes a necessity or a family need arises. But frequent moves without a solid reason are one of those tenant screening red flags that often mean you’ll be filling that unit again sooner than you’d like.
7. Past evictions or lease violations
Sometimes eviction happens, but repeat lease agreement offenses are hard to excuse. Patterns of unpaid rent or breaking the lease tell you what to expect if you rent to them. Always confirm with official records of financial instability, not just what’s on a screening report.
Setting Your Screening Rules Early
Establish strict screening criteria from the start to stay consistent and protect you legally. Make your standards clear from the start and apply them equally. Some of the great rules you can start with are:
- Income at least 2.5 times the monthly rent
- No evictions or serious lease violations in the past two years without proof of resolution
- Consistent payment history on credit reports
- Stable employment or verified contract work
These rules help you spot tenant screening red flags early. Enforce these guidelines fairly. When you deny an application, provide the required notices, follow fair housing laws, and keep documentation on hand.
Reduce Risk with Expert Tenant Checks from Arroyo Grande Property Management Professionals!
A good screening process is your first and best defense against late rent, property damage, and costly evictions. At Town & Coastal Real Estate and Property Management, we combine proven systems with local market expertise to make sure you only hand over the keys to trustworthy tenants. With eviction and late payment rates still high in 2025, the stakes for getting screening right have never been higher.
When you work with us, you get more than just software-generated reports. We run each applicant through a full background check, credit review, rental history verification, and employment confirmation — and then we add the insight only a local expert can provide. We understand Arroyo Grande and San Luis Obispo County, from market patterns to neighborhood trends, so we know how to spot potential issues before they become your problem.
Here’s what our tenant screening and property management services include:
- Comprehensive background and credit checks
- Rental history and eviction record verification
- Employment and income confirmation
- Local market insight that software alone can’t provide
- Full-service property management for ongoing tenant success
Don’t leave your investment to chance. Let our property manager handle your tenant screening so you can focus on growing your portfolio, not chasing down late rent or dealing with damage repairs. Call us today to get a smarter, more reliable tenant screening process in place before your next vacancy.
FAQs
Can renters use their own background check instead of paying the screening fee?
In some states, yes. Renters can hand over a background check they already paid for, which can save money if they’re applying to multiple places. The catch? Many landlords still say no. They want reports from their trusted service to make sure it’s current and complete. The law tries to make it easier for renters, but in reality, it’s hit or miss. Always ask the landlord before assuming they’ll take it.
What does a landlord have to do if they reject you based on your screening report?
They can’t just say “you’re not approved” and leave it at that. Federal law says they have to send an adverse action notice explaining why they turned you down. The notice has to list the screening company they used and tell you how to challenge any mistakes in the report. This rule keeps the process transparent and gives renters a fair shot at fixing errors before they cost them a home.
What’s actually in a tenant screening report?
It’s not just a credit score. A screening report can show payment history, evictions, criminal records, and even whether someone’s on a watchlist. Some landlords dig deeper, confirming where you’ve rented before and where you work now. The idea is to spot red flags before they become problems. For renters, it’s a good reminder that anything in your financial or rental history could end up in front of a landlord.
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