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5 Tips That Can Save Landlords Thousands Of Dollars

5 Tips That Can Save Landlords Thousands of Dollars

Every landlord who has rented out a house, apartment or even a single room has experienced problems with bad tenants.  Landlords who are new to the property rental game should learn to avoid these types of tenants like the plague since 98% of the issues you will face when renting out your properties routes back to the tenant screening process, therefore this article will be focused mainly around screening tenants.

Although landlords may know a lot about a tenant through background check information and strategic interview questions, many landlords make the mistake of trusting the applicants that come their way or they simply do not want to take time to find the right tenants and put the right systems in place. This leads to troublesome tenant living in their property, possibly resulting in thousands of dollars being lost for the landlord. This can be easily prevented from happening by following these top tenant screening tips and pro tips.  As you read the title of each section it may seem like common knowledge but we promise you will get some gold nuggets out of this article.

 

1) Criminal History

If you’ve ever attempted to rent an apartment you will find that most have a very strict policy on criminal records, and while it may seem over the top not to let someone rent from you with only a minor misdemeanor charge; there is a reason for this.  For your own safety and for the safety of other residents, a landlord should include a criminal background check as a part of the tenant screening process and set strict guidelines as to what type of criminal past is acceptable and what is not. This will help assess each tenant and determine whether they may be a threat to the your safety, your property, and your reputation as a landlord. It is also a no brainer that a tenant with a criminal background will have higher odds of being dangerous to the community around your property depending on their offense.

 

2) Credit History

Most landlords will not even consider a tenant who is not making three times the cost of rent in any given month. However, sometimes income does not tell the whole story whether or not a tenant will be able to afford the monthly rent.  A look at the applicants credit history can help the landlord assess the tenant’s ability to manage money and make timely payments. Debts are a red flag, which can divert the tenant’s income in other directions and prevent them from paying the rent. Late or unpaid credit cards are also a disqualifying factor, because they show that a person is not on top of his/her monthly expenses.  Your properties are a business, not a hobby and should be treated as such with strict guidelines.

 

Pro Tip:   It’s highly recommended must put your tenants on automated rent collection so that the payment is auto drafted each month.  This greatly increases accountability on the tenant and if the payment is denied for any reason it will be drafted shortly after.  Plus you don’t have wast precious time to run to the bank and update a ledger so frequently.

 

3) Reasons For Moving

This is a something that many landlords fail to ask when interviewing future tenants. Each tenant will have an answer to this question and some are more long winded answers than others but this is a big one.  If you as the landlord sense that the tenant is moving due to a sour relationship with a former landlord, then you should think twice before moving forward with their application and possibly do a little digging on the previous landlord to make sure that they aren’t just a shady landlord; give your applicant the benefit of the doubt.  Generally, tenants will not reveal landlord troubles as they know it is a red flag, but you can find out if they are hiding something from the way that they answer the question, their tone and body language can be a telltale sign.

Pro Tip: If you see a tenant go into a long winded answer and start adding irrelevant information to their answer when you pop this question, they are more than likely hiding something.  These possible lies can be subtle and counter-intuitive.  Keep an ear out for a change of story and excessive finger pointing.

4) Eviction History

Check the prospective tenant’s civil history to know whether he/she has been involved in an eviction claim. If a tenant has ever been evicted by a former landlord, then the landlord should know about it so that he will not make the mistake of signing a lease with them.  Eviction processes are real headaches with numerous court appearances that may run even for a year and will leave the landlord too burned out to find a replacement tenant.

Pro Tip: If you notice that the eviction was over 7 years ago and the tenant has had a stellar rental history and consistent job since that time, than by all means go ahead and give them a chance.  Just make sure that you do a thorough check of their credit, background and employment history to make sure that everything has improved greatly since that time.

5) Tenants Aliases

Running an alias search will help the landlord find out whether the tenant has used previous identities in the past. This may help uncover identity thief, or someone who skips from residence to residence without settling lease payments.  A person with a slew of aliases is more than likely not an honest person and therefore will not be a great tenant. Cut your losses and move on!

 

These tips will help you know about your prospective tenants better and make a decision about who is trustworthy and safe, and who is not. This is your investment and you need to protect it by all means necessary.  Background checks and interviews may take time and a little money, but they are worth in the long run and can save you thousands upon thousands of dollars in addition to many bottles of ibuprofen.  We hope you enjoyed this article and wish you all the best in your tenant screening process.

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