If you an experienced landlord, you probably know that bad tenants cause worse problems and bad experiences on your investment property. Bad tenants can cause you to lose thousands of dollars due to unpaid rent, property damage and legal fees. Although you may try to avoid these bad tenants, there are times when your judgment will get the best of you and let you down. Well, what if you avoid using your gut feeling when looking for tenants? Prevention will always be better than cure. Tenant screening is a key component for profitability of a rental investment. You need to implement a comprehensive process that will ensure you find good tenants for your investment. The goal of having a comprehensive screening process is to find tenants who are highly likely to comply with all the terms of your rental agreement. There are red flags that are often overlooked by landlords and end up causing loses in the long run.
Here are red flags to look out for during tenant screening as a landlord.
Tenant Work History
Most landlords ask the applicants’ employer about the income and employment of their prospective tenants and leave it there. However, this does not show you the behavior of the potential tenant at the workplace. You should talk to their direct supervisors or manager to get to know the type of person they really are. Ask about discipline issues, late arrival to work and whether they meet or skip project deadlines. All you want to know here is how responsible your potential clients are.
Potential Tenants’ Type of Debt
Many landlords who bother to run the credit report only glance at the FICO score before making a decision. However, it is important to check the type of debt your applicants had and their payment history. You want to see a constructive debt on the potential tenant’s credit report. For instance, a car debt makes more sense as opposed to credit card debts made from purchases.
No Lie Policy
Ensure your potential tenants know beforehand that the policy is fully enforced. Don’t continue with the process of application when you catch the potential tenants lying about anything, however small. A single lie is an indicator of other lies. People who lie during the application process will be trying to give you a message that they can willingly deceive in order to get something they need. You want to have good tenants who value honesty.
Contact Previous Landlords
A landlord may choose to give a bad tenant a good recommendation to get rid of them. Although it may seem dreadful, it happens out there. What if you contact the previous landlord? When you contact the previous landlord, they will possibly provide an honest opinion since they’re not in business with the tenant in question. Contact at least two of the applicant’s previous landlords to find out their experience with the said tenant. You should also verify the landlord’s identity if possible because the applicant may give you a friend’s name as their landlord.
Potential Tenant’s Eviction Record
Although everyone is bound to make mistakes, eviction is not a mistake at all. Don’t rent your property to a tenant who has a record of evictions. Eviction is a sign that the applicant willfully fought to stay in a rental they were not allowed to remain in. If you don’t have time to follow up your tenant who has many issues, say no to any tenant who has been evicted in the previous five years.