Vacancies often breed anxiety among landlords. The desire to fill a unit quickly can sometimes get in the way of finding the perfect tenant. However, this could be a costly mistake. Bad tenants miss payments, damage property, and can be downright miserable to deal with.
To avoid these problem tenants, it is extremely important to watch for several red flags throughout the tenant screening process. Rental applications are key to finding quality tenants.
Credit Score
This one should be the most obvious. Prospective tenants with a history of missing payments and spending beyond their means are probably not the type of people you’d want to rely on to send in checks every month. Of course, you can always give them some leeway for minor credit blemishes, but be sure to look for glaring signs of financial irresponsibility. The easiest way to find and manage credit scores among multiple applicants is through an online property management software.
Background Check
Just like a credit score, a background check can uncover some nasty red flags about potential tenants. Do they have a history of theft, vandalism, drug use? No landlords want these issues arising midway through a lease.
It’s up to you what discretions can be forgiven and which ones are total deal breakers. An applicant with a minor charge from their teenage years are not necessarily going to be bad tenants, but it is important to determine which behaviors are potentially toxic.
Employment History
Does the applicant switch jobs a lot? Are they in a volatile industry? Are they reluctant to offer you a reference from work? If your applicant is a flaky employee, odds are he or she could be a flaky tenant.
A good applicant would have a stable job he or she has held onto for a long time. Of course, switching jobs is understandable–but you want to make sure they don’t have long gaps in between employment.
Current Income
Proof of income is also hugely important in the screening process. You need to know that your applicant will be able to comfortably make rent payments each month. Do the math if you have to. Can they afford rent, utilities, food and necessities with some to spare off their monthly income? If they’re cutting it very close, odds are there might be some months where the rent is late, which is obviously not an ideal situation for landlords.
Other Financial Information
If you want an even deeper look into your applicant’s ability to pay, you can even go as far as asking them for bank statements and credit card records. A healthy amount of savings and proof of timely credit card payments can be a great indicator of the prospective tenant’s ability to pay rent. The more information you can gather, the better chance you have in determining an applicant’s overall financial responsibility.
Landlord Referrals
This one is a big one. An obvious indicator of whether this lease will work out is whether or not the tenant’s last one did. This is as easy as calling up their previous landlord and asking a few questions. Usually, the less the landlord has to say, the better. Make sure that the tenant was low-maintenance, paid rent on time, and left the unit in good shape.
An applicant’s reluctance to provide a landlord’s contact information can be a huge red flag. This often means they had a bad history with their previous landlord that could potentially be replicated. Just ask their previous landlord plenty of questions to feel-out how the applicant behaved as a tenant.
Reason for Leaving Previous Residence
Why applicants left their previous living situation is another critical piece of information. It’s something banal like their lease ended, they’re moving to a new area, or they want to move to a bigger place. However, there are some red flags to keep an eye on. Find out if the applicant was evicted, had an altercation with the previous landlord or roommates, or perhaps he or she is just an impulsive person who moves on a moment’s notice.
Ideally, you want a tenant that will stay for the entire lease period without any drama. Past reasons for changing residences can give you important insights into how the applicant chooses to end rental agreements.
Appearance and Demeanor
Don’t judge every book by its cover. However, keep in mind that there might be some outward signs of a bad tenant. Sometimes how the applicants treat their appearance can translate into how they treat the property. This is a pretty subjective qualifier, so use your best judgment and supplement it with more quantitative facts.
Applicants’ demeanor throughout the screening process is also necessary to keep in mind. Did they fail to provide you with straightforward answers to simple questions? Were they reluctant to provide references or financial information? Were they just plain rude? All these potentially hazardous signs can be found at all stages of the screening process, starting with the initial phone call. The ideal tenant will be polite, straightforward and respectful.
Lifestyle Choices
Do the applicants have pets? Are they smokers? Are they musicians? These are important factors to consider when choosing a tenant. None of these factors necessarily disqualify an applicant, but they are all important to consider.
For instance, a musician with a drum kit may not be the best fit in a close-quartered, thin-walled apartment building primarily filled with young families and the elderly. Common sense can dictate which kinds of hobbies or critters may be problematic when renting a unit.
Important Disclaimer on Tenant Screening
While it is important to have a discriminating eye for the right tenants, there are laws against certain types of discrimination. A landlord absolutely cannot legally deny housing to someone based on race, color, national origin, religion, sex, familial status or handicaps. This should be obvious, but can get a landlord in serious legal trouble.
From: http://www.gdaapm.com
