“They seemed so nice”
I can’t tell you how many times I have heard “They seemed so nice when I was showing them the property.” from landlords describing their tenants from hell experiences.
Many of these owners got into real estate rentals as an investment opportunity. They did their homework, ran the numbers and envisioned a steady revenue stream. What they didn’t consider was the importance of fully investigating the history of their tenants.
But turned out to be the devil in disguise
Lori is a landlord from Missouri and told me that she showed her rental house to a couple in their 40’s that seemed professional and very polite. Then…
“The couple had been living in the house for 6 months then suddenly stopped paying their rent. They told me a convincing story why they were late and I wanted to be nice and waited. I had still not received any payment after being put off for 3 months so I began eviction proceedings. We ended up going to court and they claimed that I was a slum landlord and didn’t maintain the property. Fortunately I kept good records and had receipts for all the repairs I made, including a new hot water heater.
I was able to evict them and get a judgement for back rent. When I tried to garnish their wages, I discovered that the employer he listed on his application had never heard of him.
I also did some checking online and found that both had been convicted of theft.”
The 4 critical steps you need to take to reduce problem tenants and the headaches they bring –
All of this could have been avoided before the lease was signed and still be fully compliant with Fair Housing and Fair Credit regulations by taking simple steps at the start of the process.
- Pre-screen your tenants by clearly communicating your residency standards (Make sure they are the same for all of your applicants)
- Require complete applications and that each co-applicant completes their own individual application
- Conduct a comprehensive background screening for every applicant and co-applicant 18 years or older that includes credit, criminal and eviction results
- Make sure the applicant’s ID is properly verified. Is the applicant who they say they are?
After you take the first 4 steps, pay attention to the results!
Federal Fair Housing compliant standards and criteria can include*
- Required income level
- Prior evictions
- Bill payment history
- Criminal history
* State and local housing regulations could include other protected categories. Make sure you check with housing authorities to determine which ones apply in your area.
Credit reports alone are not adequate
Many landlords use a credit report for background screening and believe that it is adequate. Credit reports alone are not sufficient. If you have ever read one, you know they are not easy to understand. Credit reports do not contain enough information to properly evaluate an applicant. The applicant’s eviction and criminal history are very important when considering an applicant and neither are found in a credit report.
A couple of minutes invested upfront can save you countless hours and dollars.
TenantMagic provides online rental applications with the most comprehensive tenant screening reports available (credit, criminal and eviction, including a credit score) to property managers and owners.
We work with property managers, owners and real estate agents throughout the country. Feel free to contact me or register at www.tenantmagic.net