Without a doubt, picking the right tenant for your property is one of the most difficult aspects of being a landlord. Some landlords go through a strenuous process to get the perfect person or family, but keeping a good tenant isn’t easy. Others pick tenants too quickly without proper review. The truth is, you can never completely predict how your tenant will behave while they reside in your property, nor can you predict the sudden life circumstances that can change their ability to pay. However, there are ways of screening tenants that does put some of the power in your control. This includes screening tenants for red flags. If you see any of these red flags below in your candidates, weed them out immediately.
If you see that a potential candidate has prior evictions, it is in your best interest to screen them from the applications. As you may well know, the process of evicting someone can potentially be a long and drawn-out process. This means that the landlord put in a lot of work to get the tenant to leave. If the previous landlord was that desperate to get someone to leave, then the tenant probably violated his or her contract in some way. He or she might have kept a pet illegally when the contract said no pets, they could have boarded roommates that were not tenants on the contract, or they may have consistently avoided paying rent. Tenants can be evicted for any number of reasons, but at the root of it all, he or she was dishonest and did not honor the relationship with their landlord.
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You must always check the credit of your candidates. This is perhaps the number one indicator as to whether they have the ability and the inherent responsibility to pay their rent. When your candidates perform a walkthrough and express interest in your property, ask them to perform a credit check as part of their application process. If they appear hesitant or anxious, that may be your first indicator that something is amiss with their credit. If your candidates proceed to submit their information for credit check, examine their credit for any outstanding debts. If they have shown consistent negligence to pay, then this is a red flag. They may simply be irresponsible, or they have taken out credit they cannot afford.
Alternatively, if your candidate, for example, is a student, he or she may not have much credit to their name. If this is the case, you may allow for a cosigner, which will usually be a parent or other family member. The cosigner must show their credit scores as well, which will give you a better idea as to whether your tenant will follow through with payments.
A Tax Lien
A tax lien is issued by the IRS, and its function is to seize assets in order to pay off tax debt. This means that your candidate in question has avoided paying their taxes, and may owe a hefty sum. This is yet another red flag that they are financially unprepared or irresponsible.
The general rule of screening someone’s criminal history is to not allow a tenant to rent from your property if they have had three or more convictions within the last five years. If you are interested, the details of their criminal history are publically available through the court system. You have the privilege of finding out what they were convicted of, which very well might have been a minor crime. Keep in mind, as well, that some states and cities provide incentives for landlords who board people with prior evictions, as a service to help integrate such individuals back into society. Check with your local government to see if this applies to you.
A Difficult Personality
Finally, you want peace of mind that your tenant will be professional and respectful. When you first meet them, ask them questions that take a personal interest in their job, their reasons for moving, and why they like the area in which you live. By making simple small talk, you may be surprised at the personality quirks you find, which can make all the difference as to whether you have a smooth or turbulent business relationship. Remember that if they have an easy-going personality they may still not be responsible. If this is the case, take note that not charging late fees is a mistake if they do not pay rent on time.
Images from West London House by Coupdeville Architects