Have you ever rented to a horrible tenant?
A terrible tenant can really be a nightmare and have a negative effect on your real estate investing business. On the other hand, there are times where you can be blessed with angel tenants that are worth their weight in gold.
These are tenants that always pay their rent on time and take care of your property. You really do not even have to worry about your property much at all because they are such good tenants.
How do you stack the cards in your favor when choosing tenants? It all starts with how you screen the tenants. More often than not it is really the owners fault or the property manager for not properly screening out the deadbeats.
There are professional deadbeats out there just looking to take advantage of the uneducated or lazy investor. Don’t let this be you!!! Screen them out thoroughly.
Here are the top methods to use when screening out tenants so that you can stack the deck in your favor.
● Check Credit Scores
Always check credit scores to look for major red flags. Look for evictions, bankruptcies, collections and defaults. If they do not care about their credit at all it is a good indication that they won’t care too much about being timely with your rent and taking care of your property.
● Verify Income
Make sure to get their last 2 pay stubs to verify their income. There are people who will falsify documents so it is also important to speak with their employer which is the next bullet below.
● Verify employment
Call the prospective tenants employer. Have them sign a verification of employment document.
● Call Past Landlords
When you call past landlords the most recent one is the least important. The reason is that if they are a horrible tenant the landlord may just tell you they are great to get them out of their property. It is more important that you speak to the landlords before their current one. Ask them specific questions such as:
○ How many weeks advance notice did the resident give you that he or she was moving?
○ Were they or are they current on their payments?
○ Was the resident ever late more than 30 days?
○ Did the resident vacate early, before the full term or end of his or her agreement?
○ Did you have to withhold any of their deposit to cover any unpaid rent or damages?
○ Were there ever any complaints from the neighbors regarding the residents or their pets?
○ How many pets did the resident have on the premises? Had the animals lived there with your permission?
● Bank Statement
Get a recent bank statement and a reference from their bank.
● Background Check
Have a background check conducted to make sure there are not any major red flags there.
● Start Screening From the Very First Phone Call
Start your screening process from the very moment they call you to inquire about your property. Here are some questions to ask them:
Did you give your current landlord a one week or 30 day notice? The proper notice would be at least 30 days. Their answer could give you some insight on what you may be able to expect in the future.
Do you have any pets?
How many? What kinds? Any birds, fish, reptiles large or small?
Who else will be living with you? Many times tenants will sublease without asking for your permission. Before you know it there could be 1, 2 or more extra people living in your property. Try to find this out ahead of time.
Will anyone else be staying with you during your stay?
What is your reason for moving?
Any problem with last landlord? This can often be a very revealing question to ask. If they had disputes with their last landlord, I would be careful. See what the landlords side of the story is.
What is your work phone number? You may find out by asking this that they do not have a job.
Last but not least, make sure you have an in depth application. The application is one of the most vital landlording tools but often taken for granted.
Make sure you get their social security number as well as their complete name. Also find out if they have a maiden name or any other last names that may show up on their credit report.
Do not feel bad about asking for this information. The alternative is you potentially having to deal with a deadbeat, nightmare of a tenant. Play it safe and screen them well!!!
I hope that this post was very helpful to you. If it was, please share with someone who you think may benefit from it.
Here’s to your success!!!