Have you ever had to deal with nightmare tenants? You know the ones. They don’t pay their rent. They disrupt the peace and quiet of your property and provoke claims from other tenants. They cause expensive damage.
Nightmare tenants harm the profitability of your properties. They hurt your reputation as a property manager. The best way to avoid the headache of nightmare tenants is, of course, not to rent to them in the first place. But how do you find great tenants while showing the potential nightmares the door? You need effective methods of screening applicants before you hand them the lease or rental agreement to sign.
Take a look at these 5 ways to make sure you’re renting to tenants who will treat your property well and be a pleasure to deal with.
- Decide What Matters to You
Of course you’d like a tenant with a dream credit score, a great job that pays far more than is required to pay your rent, and amazing referrals from previous landlords. But just in case you don’t have a line of those tenants waiting to view your property, set your standards before you open applications.
What’s your minimum credit score requirement? Will you consider tenants with any kind of criminal record? If so, where do you draw the line? What minimum income are you looking for? Once you set these standards, it’s easy to eliminate any applicants who don’t meet them.
- Harness Tech for Background Checks
When an applicant fills out an application to rent one of your properties, you’re hoping that they’re telling the truth. But what if they’re not? Fortunately, you can get some high-tech help to provide you with the answers you need. Invest in the technology needed to run criminal background checks on your applicants, including checking them off against the terrorist watch list, sex offender lists, FBI Most Wanted list, and other criminal databases.
When you run these background checks, you’ll feel more secure about your tenants. And when you advertise that you’re running these checks, you’ll drive away the tenants you don’t want while reassuring the tenants you do want that you’re looking out for their safety as well.
- Ask for the Same Info From Every Applicant
Make sure all your property managers and any real estate agents you work with are collecting the same data from every applicant so you can compare potential tenants fairly and evenly. In addition to that criminal background check, run a credit check on each applicant, and scan a copy of a government-issued ID so you can verify identity (ask for either a driver’s license or a passport).
If you’ve ever had a tenant’s check bounce or had to deal with an eviction for non-payment of rent, you know how important those financial background checks are. Ask for employment history — and do more than ask. Follow up by calling employers and verifying not just employment but how long the applicant has been employed there. Ask for copies of pay stubs to verify that your tenant can indeed pay the rent on an ongoing basis.
- Make a Few Extra Phone Calls
Yes, you’ve already called to verify employment history. Now it’s time to call former landlords. Note the word “former.” You may want to call the current landlord as well, of course, but allow yourself to be a little skeptical when you speak to the current landlord, especially if the tenant hasn’t been there long. Perhaps the current landlord is telling you what he knows you want to hear, just to get rid of a bad tenant!
Former landlords are far more likely to tell you the unvarnished truth, since they no longer have any vested interest in this tenant. Especially if you see a lot of movement from one property to another, take a few minutes to make these calls. (And if you can’t reach those former landlords, that alone provides you with valuable information!)
- Pay Attention to Your Instincts
Smooth-talking con men can put on a good show when they want something out of you, so don’t necessarily assume that because you like someone, they’ll make a great tenant. (That’s why you’re running all those background checks.) But do pay attention to your first impression.
Finding a great tenant is the goal of every property manager or landlord. When you go out of your way to treat all applicants the same (asking the same questions, acquiring the same information), you can know that you’ve done your job fairly. And when you find the tenant who breezes through your background check protocols, you can feel confident that you’re doing well by the property owner and other tenants as well.