You have invested wisely and purchased a potentially great rental property. Now you are asking yourself, “How do I avoid bad tenants, and find the right person to rent my home?” (How do landlords find good tenants?)
Common mistakes could cost you thousands in lost rent, or damages. You have probably heard many horror stories of bad tenants defaulting on rent payments, leaving trash behind, and even destroying property. Fortunately renters such as these are not in the majority, but it is much easier to do your homework and thoroughly screen your tenant upfront, rather than having to deal with the consequences later. (When renting your home it is important to know landlord rights)
So what should you do to avoid potential bad tenants?
If you want to rent your home, you should consider the services of an experienced leasing agent. Leasing agents are professionals in this area, and will typically have extensive experience screening applicants and performing background checks. If you do decide to manage the process yourself, there are some steps you can take to help you identify those tenants that could become future problems.
Don’t rely on what someone tells you to be the truth. Bad tenants don’t typically become a problem overnight. They have most likely had renting issues in the past and know how to work around the system. When you rent your property, you need to be sure to screen thoroughly.
Complete a Credit Check
Just because someone does not have a long credit history, does not mean that they are unsuitable as a tenant, for example, young graduates just starting in the workforce. However, it is usually safer to find a tenant that has an established credit history. Past history, is often a good indicator of what you could expect. Therefore, you should search for any late payments and find out more information. Was it a one time late payment, or is there a history? How recent were the late payments?
Also check the addresses listed on the credit report. Do they correspond with the addresses provided by the applicant? Are there addresses that have been omitted? This could be a clue that your applicant does not want you to know about a certain address. If this is the case, you need to ask yourself why.
Verify Employment Details
Make sure you ask to see the applicant’s pay stubs for the past few months. You will want to know that your applicant has a current, and steady, source of income.
Another tip is to contact the current employer. Don’t rely on the number given to you by the applicant. If you want to be sure you are calling the business, and not a friend of the applicant, you can use the phone book to call the company head office and then ask for the appropriate supervisor. Find out the role of the applicant at the company and what whether they are employed on a full, part time or casual basis.
Does this approach seem too extreme? Maybe, but remember, you need to be thorough to ensure you don’t get fooled. Applicants know the screening processes, and it is these processes that unscrupulous applicants will try to undermine.
Contact Previous Landlords
Following up with previous landlords can provide you with valuable information as to how the applicant maintained their previous rentals, and whether or not they had pets. Be specific and ask the landlord whether they would rent their property to this person again. If you hear any hesitation in their voice, you would be wise to ask more detailed questions.
As with the employment check, you need to be sure that you are speaking to the landlord, or the managing agent.
Consider Checking a Tenant Database
You may want to consider checking your applicant using a tenant database. Tenant databases are run by private companies and are typically fee based, but it is one extra precaution you can take to check on an applicant.
Document the Condition of your Property
Prior to signing a lease agreement, take detailed photographs of your property using a digital camera. Be sure to provide a copy for the tenant and a copy for your files. This may not prevent a bad tenant from moving in, but it is certainly a deterrent from making false claims at a later date. Photos will provide some evidence and possibly recourse, if your property is damaged after the tenant moves in.
Offer a Short Term Lease
If you find someone that you think could be a good tenant, but you have some hesitations, you can always opt for a shorter lease. For example, a recent graduate with a steady job might be the great match for your inner city flat. Perhaps your only reservation is the limited credit history. Offering a six month lease might work for both parties. Based on how the six month period goes, you can then choose to either extend or terminate the contract.
Landlord Insurance
As an extra precaution, you could also consider taking out landlord insurance to insure your building against loss or damage (137 Why landlords should insure). Some policies also offer coverage for unpaid rent and the legal costs involved in trying to recover the lost income. Insurance policies differ from company to company, so be sure to do some research to find a policy that works best for your circumstances.
As you can see, there are a variety of ways to ensure that you are not the next landlord to fall victim to an unscrupulous tenant. Yes, it may require more time upfront, but the extra effort typically pays for itself with a rewarding tenant, landlord relationship.
Source : sellmycastle
