Property Management – Sherman Oaks

Tenant Screening Don’t Get Duped By The Prospective Tenants!

Tenant Screening Tip 1 – Verify Address and Landlord information:

Since I’m a licensed CA real estate Broker, I have access to the on-line tax records via MLS. If you are not licensed, ask a realtor you know to check the tax records for you.

· Check the prospective tenant’s Driver’s License for the current address (one of the reasons I require copies of the driver’s license) and compare it to the address on the application
· If the addresses on the driver’s license and the application match, check to see who owns the property, and if the name on the tax records matches the name of the landlord on the application
· If you can find the landlord’s phone number on the tax records, use that number to call the previous landlord(s)
· If the landlord’s phone number is not listed in the tax records, use ZabaSearch.com or the on-line white pages to find his/her phone number
· If all you have is a phone number, or if you want to cross-check it, use the ReverseSearch.com phone number look-up service online

Tenant Screening Tip 2 – Confirm Employment Information:

I usually require that copies of the last two paychecks be submitted to me for several reasons: (1) To ensure that the prospective tenants earn sufficient income to afford the rent; (2) To be assured that the wages are garnishable if the renters go into default; and (3) To be able to verify their employment prior to approving the application.

I never call the employer’s phone number listed on the application, but rather do my own research. I have run into cases where the prospective tenants put their relatives’ name and phone number on the application, and warn them to be expecting an employment verification call. Instead, I use the following process to verify tenant employment status:

· Note the name of the employer, as listed on the paycheck stubs
· Google the employer, or call 411 and get the employer’s phone number
· Call the number you obtained from 411 and ask for the HR department, then verify employment of the prospective tenant. HR usually will not disclose the salary, but will say “yeah” or “nay” regarding the salary if you give them a ball-park figure
· If the employer is one of the companies that have automated employment verification system, call their main operator and ask to be connected to the person listed on the application as the renter’s supervisor, or the prospective renter himself. If that person really works there, the operator will patch you through.

Tenant Screening Tip 3 – Inspect Tenant’s Current Living Conditions:

How can you tell if the applicants will maintain your property in a good condition? You send a friend to inspect the interior of their current residence, of course.

Have the friend knock on the door and ask for “John Doe”. As the door is opened, your friend can quickly assess the interior condition of the property, which will give you a pretty good idea of how well these tenants will maintain your property once they move into it. Your friend will be told that neither John, nor Mary lives there, and that will be the end of it.

As far as the exterior goes, you can drive by the property yourself, or have your friend take some photos for you.

Yes, doing this involves a little trickery, but unfortunately some renters just don’t take care of the properties they lease. As a landlord, it can end up costing you thousands of dollars to repair the damage, so sometimes it is necessary to take certain precautions, no matter how “sneaky”. After all, it’s you who’s going to pay for all the repairs, so you have every right to do what it takes to minimize your expenses.

Tenant Screening Tip 4 – Always, Always, Always Review the Credit Report:

The information I discover on the credit report can make or break the deal for me and my prospective tenants. I give credit reports about 50% of the total weight in my decision making, regardless of how well everything else checks out.

Sometimes there are judgments or evictions your prospective tenants did not tell you about. They could have credit card payments amounting to almost more than their total monthly income. Or you could find out that even though the prospective tenants have high earnings, they have never made one payment on time, and have a large number of collection accounts on their record.

In general, I evaluate each credit report on a case-by-base basis. I overlook certain conditions, such as medical bill collection accounts, if it is obvious that the applicant had a medical problem and could not work for a period of time. If there are other bills that were accruing during that time period, I might overlook those, as well.

One of the other things I might give renters some slack for is a foreclosure of a property purchased during the last real estate peak (2005/2006). To confirm that it was a purchase and not a refinance, I do access the property tax records once again. If the property was refinanced, as opposed to purchased, it tells me that the applicants are not handling their finances properly, and most probably I will NOT approve their application.

Hopefully, these “hard-nosed” landlord’s tenant screening tips will come in handy for some of you, and save you money in the long run.

By Angella Raisian