Running credit and criminal background checks, as well as following up on references, can help you determine who could be a responsible renter. But while these checks are essential parts of the tenant screening process, there is another component you should not take for granted: the tenant interview. Continue reading
A tenant credit check gives landlords information about a prospective tenant’s borrowing history and indicators of their financial responsibility. Depending on the agency that runs one for you, it will show you a person’s outstanding debt, loan requests, payment patterns, and public records. It could even inform you about other parties that have recently requested credit checks on that person. Continue reading
Renting out apartments, rooms, houses or other dwellings can be a lucrative business, but only if you accept tenants who are financially capable and willing to pay the rent on time and who will be respectful of your property. Among all screening procedures, a tenant credit check should top your list as the results of such screening will give you a good indication if the prospective tenant will pay their rent on time and has the means to afford the rent.
Property owners looking to rent out their places have a lot of work to do before their property can be listed. There are logistics and administrative matters to handle, as well as making sure that the property itself is up to par with standard building codes. In addition, the property should be marketed and advertised at the right places so people looking for a rental property can apply as prospective tenants.
Opening up your property for rent to other people can be a lucrative business. While that may be the case, it is also the type of business that can be very risky, especially because you are entrusting your property to people you don’t necessarily know.
The hardest part of being a landlord or a property manager is by far how to find the perfect tenant. The perfect tenant is a person
• who will take care of your property as if it is their own
• who will be a good neighbor to other people living in the same community
• who will have a steady job and will pay their rent on time
• who will commit to renting your property for a longer period of time
• who take care of minor maintenance issues themselves and notify you if something is broken in your property
• who will ask you for permission if he/she wants to make changes to the property
• who will give you plenty of notice when planning on moving out
• who will not engage in criminal behavior
• who is honest
And so on……..impossible to find? ……… maybe…….maybe not!
Choosing a tenant to ﬁll your vacant property shouldn’t be a rushed process! A bad tenant can cost you a lot of time and money, so it is better to take your time finding the right tenant. Every prospective tenant should be screened in a systematic way so in the end you can make a decision based on a set of information that is the same for every applicant. This will also be helpful when trying to stay compliant with all the federal, state and local fair housing laws.
So here are 8 steps to follow to find that perfect tenant;
Step 1: Set standards that every applicant must meet to be “qualified”
Creating a set of standards that applicants must meet to qualify is extremely important. This set of standards can be different for each rental unit dependent on the quality and location of the rental. Standards could include things like verifiable income 3 times the amount of the rent, a credit score of 650 or above, never been evicted, maximum number of people who can live in the property, a pet policy and so on. As a landlord you get to determine what those criteria will be as long as they stay within the bounds of all fair housing laws. Then once you have your set of standards you will have to apply them consistently.
Step 2: Talk to applicants on the phone
When potential tenants contact you to tell you they are interested, make sure you talk to them on the phone before inviting them to visit the property. This is where the actual rental screening process starts. With a short phone interview you can quickly weed out tenants that are not serious and/or not qualified.
Put some effort in asking the right questions based on the standards you have set. Questions like what kind of pets do you have and how many people will be moving into my property are some of the questions to ask. Other questions could be; When are you looking to move? How long do you want to rent for? How long have you lived at your current address? Why are you moving? and so on. Make sure to mention the rent amount and the deposit amount and ask them if they can afford those amounts. Make sure to take notes and listen for inconsistencies in answers and applicants who are trying to avoid answering certain questions.
After ﬁlling out the pre-qualiﬁcation form for all potential tenants that are still interested in the property, review the information and invite the most serious prospects to a scheduled tour of the rental.
Step 3: Show the rental property
It is hard to believe but sometimes applicants want to rent your place without even having visited the property! Please do not agree to this. You do want to meet applicants in person no matter how perfect they sound. Usually you get a lot better idea of what type of person someone is by meeting them. Here are some things to look for during the showing:
• Are they on time?
• Do you like them?
• Do they fit the profile?
• Do they seem to be very interested?
• Re-ask them some of the questions you asked them during the phone interview and see if their answers match?
• Do they look clean, put together?
• What is your gut feeling?
Based on this information you should have a pretty good idea of what type of person you are dealing with. So if it feels right, and the potential tenant is still interested, hand them an application and ask them to fill it out right then and there.
Step 4: Have the applicant fill out a rental application and charge an application fee
Personal information such as name, current address, Date of Birth and SSN of all renters above the age of 18 should be part of the rental app. Other information to request is the current and last two landlords, current and last two employers, monthly income, and pets if any. In addition, a reasonable application fee should be charged. Just make sure you follow all the local laws with regard to the application fee. In addition, make sure the application includes an authorization to do a complete background screening on the tenant including a national criminal and eviction check and a credit history check. The filled out application and the collected fee will be a good indication if the potential tenant is serious about renting your property.
Step 5: Review the applications
When reviewing all the applications, make sure that you comply with both federal laws (Fair Housing Act and Fair Credit Reporting Act) as well as the local ordinances that apply to the location of your property. Some landlords use their gut instinct to select their tenant but when you are facing discriminating charges in court this will not be a good defense. Make sure to store all applications of all interested tenants for several years, use the same rental application and use the same criteria for all applicants. This way you can prove that you did not discriminate and you can also objectively and fairly analyze and compare all prospective tenants to select the best one.
Make sure to read all rental apps carefully and pay attention to all the things that might disqualify an applicant such as no income, no employment, large pets, no previous landlords listed, no employers listed and so on. Do not believe everything you see on an application. Compare the application with the background check you will run in Step 6 and you will get a good idea if the applicant has been honest on their application.
Step 6: Run a comprehensive background screening report including a credit history
So you have pre-qualified the applicant; you like the person, the applicant has filled out the application, paid the fee and passed with flying colors. Don’t stop your screening process here. As previously mentioned, not everyone is honest on their application and during the pre-screening process! Background screenings should include a SSN trace, previous addresses, National Criminal and Sex Offender Search, National Eviction Search and an in depth Credit History. Running a comprehensive background screening report on potential tenants is an absolute must and is pretty easy to do these days.
Houserie.com is an online tenant screening company that will provide you with a comprehensive report that has all the criminal, eviction and credit background information you would need to make an informed decision on a tenant. We offer pay-as-you-go pricing and packages ranging from $19.99 though $29.99. It is all online and you can have the tenant fill out their own information online or you can decide to fill out the tenant information yourself online. When ordered during business hours the report should be available within a few hours sometimes even faster. Check out the Houserie ultimate sample report for more information.
When reading the report please pay close attention to issues that may disqualify your applicant based on your set of criteria such as certain criminal offenses, evictions, poor payment history, low credit score, bankruptcies and many collections/charge offs. The credit score range will tell you if the potential tenant makes payments on time, owes a significant amount of money, the number of tradelines used and the length of their credit history. If applicants have a history of not paying credit payments on time, they might not pay their rent either!
Step 7: Check references
You are almost done finding the best tenant possible, but do not stop here. Checking employment and landlord references listed in the rental application is one of the most important steps in screening your applicant. This should include contacting the last couple of landlords, their current employer, and any personal references if available. This sounds time consuming but it is the best way for you to develop a better picture of what your tenant is really like.
References from previous landlords. If an applicant has listed previous landlords, please call them and ask them questions like “Did the tenant pay their rent on time? Did you encounter any problems with this tenant? How long did the tenant live in your property? Please be aware that sometimes tenants will give “fake” references, meaning they will list a friend as a previous landlord! Also when talking to their current landlord, be aware they might not be always truthful as they might be trying to “get rid” of a difficult tenant.
References from current employer. Hopefully your applicant has been employed for a longer period of time with their current employer. To verify income, please request the tenant to provide you with a copy of the most recent paystub. You should also call the employer to get more insights. Many companies have rules and regulations on what information they’re able to disclose about their employees, so asking questions that require a yes or no answer might get better results than open ended questions. At least try to verify the information given on the application.
Step 8: Make a decision
Finally you have reached the end of the tenant screening process. Now it is time to make a decision. After reviewing all the information in detail and comparing this information with the standards you set, you can now make your decision. Hopefully you have found that perfect tenant and you can have the applicant sign the lease and agree to all the rules and regulations. Congratulations on finding the perfect tenant!
As a landlord or property owner, you face a multitude of problems. One of the hardest problems you may face is a tenant versus tenant disagreement. Here are some great tips and suggestions to help you mediate and solve a tenant versus tenant dispute.
Make Yourself Available
When your tenants initially move in, it’s a good idea to let them know you’re available for them if they encounter any problems. If they do encounter a problem, let them know they should contact you first.
Also, let them know what time you’re available and how they can contact you. Letting your tenants know that you’re there for them will make it easier for them to contact you for help if an issue does arise. This will help you greatly if a tenant does approach you with an issue involving another tenant because you will now be able to act as mediator, which allows you the opportunity to defuse. The earlier you know the easier it may be to fix.
Keep Yourself Safe
It’s very important as a landlord or property owner to always keep yourself and your tenants safe. Sometimes some problems are just too big for one person to handle, and you may not have the resources to correct them. If you ever feel unsafe about talking to or encountering a tenant, you may need to get the proper authorities involved. Always remember that there are some problems that are just too big to handle for even landlords and property owners.
Always Be Professional
No matters how out of hand a situation between tenants has gotten, you need to make sure that you always stay professional. You don’t ever want tenants to feel that coming to you with a problem is a bad choice. Be sure that you are listening to the tenant. and let them know that you are taking their problem seriously. Handling a situation in a professional manner is the right thing to do and is also a good way to show the tenant that you do care about what is going on.
Figure Out What the Tenants Want to Happen With the Situation
Once tenants have approached you with an issue and have told you their side of the story it’s a good idea to find out what they want to happen. A good example is a tenant complaining about another tenant being too loud. The tenant may be complaining about the timing of the noise, not the noise itself. The tenant may ask you to see if the tenant can keep the noise down during certain hours of the day. With this information you now know what to say to the other tenant to help remedy the situation and keep both parties happy.
Try to Work Out Disputes as Quickly As Possible
As a landlord or property owner, you need to get tenant disputes taken care of as soon as possible. Taking care of something as soon as possible is a good way to show your tenants that you care and are looking out for their well-being. The sooner a tenant versus tenant dispute is taken care of, the better it will be for all parties involved. Getting a situation taken care of quickly will also be one less thing that is hanging over your head.
Every Situation Should Be Treated Differently
Not matter what dispute a tenant has with another, be sure to treat each dispute as if it’s the first time you have handled it. What worked out in the past may not work for the present problem in front of you. Also, what worked for other tenants may not be what your current tenants want. Each situation is different and should be treated differently.
Check Back on Tenants to Make Sure the Problem is Solved
Be sure that after you have helped tenants resolve an issue that you contact them later to make sure everything is still okay. You hope that when you help tenants fix an issue that it stays fixed, since there is a chance it may not. Checking in with them to make sure both parties are keeping up with their side of the bargain is a very good idea. If they are not, it’s a good time to remember what they had agreed upon.
Tenant versus tenant issues can come up at any time and can range from simple issues like a tenant worried about a noisy neighbor to more extreme problems. Being ready for these problems is a huge step into getting these problems resolved. Hopefully with these suggestions you will be ready and better prepared to handle tenant versus tenant issues if and when they arise.
Tenant Screening In a Galaxy Far Far Away
Even if you are in a galaxy far far away you should still be performing tenant’s screenings on any potential tenant. We wondered how some of the most popular Star Wars characters would fare in a tenant screening. Here are the results. Would you rent your space property to them?
Obi-Wan is one of the most popular Jedi’s in the galaxy. No matter his popularity you will still need to run a tenant screening on him. Here is what you most likely will find on Obi-Wan’s tenant screening report.
Social Security Number Trace – Obi-Wan’s trace should bring up some of his other aliases, Ben Kenobi and old Ben. The trace should show Obi-Wan’s previous place of residence, a small isolated hut in the mountains of Tatooine.
Criminal Background – Obi-Wan has a very clean background. The only thing that could possibly show up on his criminal record is a charge of breaking and entering when he snuck onto the Death Star.
Eviction Search – He currently lives in a deserted area of Tatooine by himself. We don’t know if he pays rent or owns his hut. He has been out there a long time so some may say he owns the property due to “Squatters rights.”
Quick Tenant Credit Score Card – Obi-Wan didn’t have any credit issues before he went into hiding. His credit score may be low due to inactivity.
Boba Fett is known as one of the most ruthless bounty hunters in the galaxy. No matter how ruthless he still needs a place to live.
Social Security Number Trace – A social security number trace would be a must for Mr. Fett as he does come from a batch of clones. You would see that Boba’s only known residence is located in his home town Kamino.
Criminal Background – Boba Fett may have a long criminal record depending on the state you’re in. Performing bounty hunting duties is not a crime in some states.
Eviction Search – Boba Fett can be described as a bit of a workaholic. He is usually just flying around from place to place fetching bounties. He has no prior evictions.
Quick Tenant Credit Score Card – Boba has a low credit score due to the fact he only uses cash. A lot of the bounties he’s collecting are for some not so trustworthy people like Jabba Da Hutt. No surprise he only deals in cash.
Princess Leia is a Senator of Alderaan and heir to the Alderaanian throne. No matter the royal ties she still needs a tenant screening.
Social Security Number Trace – There is nothing to worry about when Leia gets her social security number trace. She has no other aliases and has lived in a home with senators her whole life.
Criminal Background – Princess Leia’s criminal background is very clean. If you’re a part of the evil empire you may see her as a thief for stealing plans to the death star.
Eviction Search – Princess Leia has no prior evictions on her record. She has lived in a palace on Alderaan her whole life.
Quick Tenant Credit Score Card – Princess Leia has an outstanding credit score card. She is a member of a royal family, so don’t expect to see any red flags here.
Han Solo is known as one of the most wanted smugglers in the galaxy.
Social Security Number Search – Hans Solo’s trace may not reveal many previous residences. He is constantly on the run and can be found on the Millennium Falcon with Chewbacca.
Criminal Background – Han Solo is going to have a very long criminal background. Most of Han’s clientele are mobsters and gangsters. He is usually not smuggling legal cargo. Solo may also be wanted for the murder of Creedo, depending on who you think shot first.
Eviction Search – Han has no previous evictions due to the fact that he has no previous residences. He is usually just found flying around in his only known residence the Millennium Falcon.
Quick Tenant Credit Score Card – Han has a very low credit score. Han is paid mostly in cash and pays mostly in cash. Han wouldn’t want to leave a paper trail that bounty hunters could pick up.
Luke Skywalker is a young farm boy from Tatooine. He will later become one of the most well known Jedi knights.
Social Security Number Search – Luke Skywalker’s social security number trace will not reveal very much. His only known residence is with Uncle Owen and Aunt Beru.
Criminal Background – Luke has no criminal background.
Eviction Search – Luke has no evictions on his record. Luke’s only known previous residence is in Tatooine.
Quick Tenant Credit Score Card – Luke is young so he may still be in the process of building up his credit. A big thing that works against him is that he doesn’t have a paying job.
Darth Vader is known as the biggest villain in the galaxy. He is a well known Sith Lord and the right hand to the emperor.
Social Security Number Search – Darth Vader’s social security scan should include his alias, Anakin Skywalker.
Criminal Background – Vader has a very long criminal background. He has murdered over 200 people and assaulted many co-workers. He has also ordered the destructions of entire planets.
Eviction Search – Darth Vader has traveled all over the galaxy, but has just one residence, the Death Star. He has no former evictions.
Quick Tenant Credit Score Card – Darth has a very low credit score card. He usually doesn’t use any type of money, he takes everything by force.
Now that you have the screening reports on some of the most popular characters in the Star Wars galaxy, you can decide if you would take them on as tenants. Who would you want as your new tenant?
Finding a suitable and respectable tenant is one of the hardest jobs a landlord faces. Vigilance in searching for a potential tenant will lead to finding one who is trustworthy and reliable, and won’t end up trashing your unit or leaving and breaking the lease contract. There are too many landlords out there who never screen applicants before approving tenants, leading to many issues and headaches later. Thankfully, there are many ways for a landlord to screen tenants, and with new and emerging technology, landlords can now check backgrounds and run credit checks much quicker and easier than in the past. Remember, there is no excuse not to screen your potential tenants with so many quick and easy ways to do so.
- Create a paper application process (if you don’t already have one). Make sure to include all pertinent information that you will need from the tenant, including: full name, date of birth, Social Security Number, their current address, background information, employment data, rental history (this is important so you can contact previous landlords to see how the tenants have done in the past), income and also personal references. If you don’t have an application form, you can create your own simple version, or you can get a free one from the local real estate association. Once the tenant has filled out the application, here are a few things to look for:
- Income. You need to make sure that the potential tenant’s income will be sufficient to cover the amount of rent they would be paying. Keep in mind they have other bills to pay as well.
- Current (and previous) employers. Check out how long they have been with their current employer. Have they had multiple jobs? Do they have long gaps in between jobs?
- Lifestyle clues. Take a look to see if the potential tenant has any pets, or other information that might be pertinent to whether or not they would make a good tenant.
- Financial data. In order to do a thorough background check, you will need to ask the tenant for their financial information on the application. A full financial picture of the potential tenant is key to finding a reliable tenant.
- Any personal references. Be sure to check up on any personal references that the tenant gives on the application. References should include the references’ names, phone numbers and how long they’ve known the tenant. Don’t just look it over, make sure to call at least one or two to verify they know the tenant and perhaps ask a few questions, such as how long they’ve known the tenant, their relationship with them and how they know them (Church? Work? Family?).
- Do an online search for the potential tenant. Searching online (using Google or Bing, or another popular search engine) will tell you a lot about a person; make sure to see if the tenant has any social media profiles, a website, or a blog. Decide by looking at everything online whether the tenant would be right for your property. If they don’t happen to have anything online to look at, then just skip this step.
- Run a comprehensive background check on the tenant. A comprehensive background check will reveal the tenant’s history and give a detailed report on any evictions, criminal activity and charges, and public records as well. You can order a background check through several different companies. Online reports are also available. If you’re watching your budget (most companies charge a fee for this service), you can do your own background check by contacting the local courts or police department, however this might be a very time consuming process. As a side note, some states don’t allow landlords to reject a potential tenant based solely on if they have a criminal history (you will have to check with your state to see if this is enforced in your state).
- Run a credit check. There are three major companies that you can run a credit check through: Equifax, Experian, and TransUnion. A credit check will let you see a tenant’s credit history for the last 7-10 years, and will give you an idea of the tenant’s credit activity (such as if they’ve ever declared bankruptcy, have any late payments, charged-off credit cards, etc.). To simplify this background screening process and to get comprehensive information on the tenant, you can use a service like Houserie.com to get not only a credit check, but also a comprehensive national criminal and an eviction check for a low fee.
- Reach out to previous landlords. Once the tenant has “passed” the first four steps, now it’s time to contact the tenant’s past landlords. Questions to ask include: Did the tenant always pay their rent on time? Did they ever damage the property? Did they get along with their neighbors? Was the property clean and undamaged when they left? All of these questions will give you a clearer picture of the tenant and how they will behave if you allow them to rent your property.
- Contact the employer. Once you have talked to the tenant’s past landlords, have a short phone conversation with the tenant’s current employer. A few important questions to ask might include the reliability of the tenant, verify that they do indeed work there, the tenant’s salary (some employers or Human Resource workers won’t give out this information; in this case, make sure to get two or three past pay stubs from the tenant) and if termination is in process.
- Set up a face-to-face interview with the potential tenant. Once you have completed all of the above steps, the final step would be to set up an interview with the tenant. Here are a few important questions to ask the prospective tenant:
- Do you have any pets? How many do you have, and are they housebroken? (If you don’t allow pets, make sure the tenant knows this upfront.)
- Do you smoke? If so, do you smoke outside or indoors?
- Do you have people who stay the night frequently (family and friends)?
- Do you have any children? If so, how many and what are their ages? Remember you cannot reject a tenant based on familial status, i.e. whether they have children and if so, how many children they have.
Now that you have completed all of these steps for screening your potential tenant, go over the lease contract with the tenant in detail. Then when both parties agree have the tenant sign the lease and move in! This whole process might seem like a lot of work but in the end finding the right tenant will save you time, money and a lot of stress.
Once you have your prospective listing ready to be rented, how do you find good tenants? Screening potential tenants with proper and lawful screening techniques can cut down on problems you could possibly face. The following are some steps in the tenant screening process to properly screen potential tenants:
1. Have Tenants Fill Out Rental Application
Having tenants fill out a rental application is a good way for you to first get information about them. You will be able to obtain information, such as their social security number, current address, and if they are currently employed.
2. Pay For A Tenant Screening
Most landlords will charge an application fee that can go towards paying for a tenant screening, rather than paying out of their own pocket.
3. Screen Your Tenants
There are tenant-screening services that landlords can use, such as Houserie.com (www.houserie.com). Screening a tenant yourself can be very time consuming and not always accurate.
4. Receive Screening Results
If a landlord uses an online service such as Houserie.com, the results can get back to them as soon as 24 hours. Depending on the screening you get, you can find out a tenant’s criminal background, if they have any past evictions, a summary of their credit, and a tenant scorecard.
5. Making The Final Decision On Tenants
The landlord will always have the final decision of whom he wants to rent to. With a proper tenant screening, he can now be better equipped to make that decision.
Finding good tenants will always be a coin toss. Screening possible tenants can help you find out who a potential renter really is, based on their background. It will also cut down on possible problems you could face in the future.
Most landlords know that screening potential tenants will reduce the likelihood of renting to a “problem tenant.” What they may not know is that it also helps to reduce and prevent crime in the entire neighborhood. By doing complete tenant screenings, landlords can weed out those tenants who have a criminal background, a history of violence, have bad credit history, or have a background of loud and noisy behavior – all of which can be predictors for future crime. Here is how your neighborhood will benefit from screening tenants:
- Criminal checks can keep unsavory characters out of the neighborhood. Landlords generally perform criminal and/or background checks on prospective tenants to make sure they’re not renting to those who have been convicted of a serious crime, or who has a history of noisy or violent acts in a previous rental home. Although some criminals may try to hide their past, a comprehensive criminal and background check will reveal their history and a landlord can then choose to reject their application in order to keep them from living in the neighborhood.
- Screening helps prevent high rental turnover. By screening their prospective tenants and choosing only the most qualified renters, landlords are preventing high rental turnover by matching their property to a tenant’s specific needs. Lowering this turnover creates a closer sense of community since renters who stay longer tend to get involved in the neighborhood and get to know their neighbors.
- Always ask for valid photo identification during the screening process. Doing so will not only verify that the person is who he says he is, but will help reveal whether he has stolen another person’s identity (perhaps to hide his own criminal background). Also ask for past utility bills to make sure the addresses match, and also request that the potential tenant give any prior names they’ve used in the past.
Landlords need to be respectful of their tenant’s privacy regardless of any state laws that give them permission to enter the unit. Respecting your tenant’s privacy not only keeps the relationship on good terms, but it may also earn the tenant’s trust, thereby giving you a long-term tenant for your property. Here are four easy and effective ways to respect their privacy, while still keeping up-to-date on the condition of your rental space.
- Call first if there are repairs or maintenance to be done to the property. A landlord cannot just show up to a property and expect to do repairs without giving the tenant notice beforehand. You need to call and set up a time to do the repairs or maintenance based on the tenant’s availability.
- It’s up to the landlord or property manager to set up privacy boundaries. Although many states have certain laws and rules in place to protect a tenant’s privacy, some do not have any regulations set up for this and the landlords must arrange privacy clauses under the lease contract. Make sure you notate any these provisions in the rental agreement before the tenant moves into the property.
- Have set business hours. Having business hours that are the same time every day will help tenants know when to reach you in case of repairs or emergencies. It will also set boundaries for respecting their privacy in case you need to reach them or make a visit to the property.
- Knock more than once and then wait. Many states require a landlord to knock at least once and then wait a period of time for the tenant to respond. Unless there is an emergency, landlords cannot just knock once and then go right inside without the permission of the tenant.
With the large number of foreclosures, bank repossessions, and declining home rates, people are forced to rent rather than buy. But the increase in renting also increases the risk of rental fraud.
There are two common types of rental scams: the outright con job that’s been going on for dozens of years and the more recent foreclosure scam. The classic rental fraud involves the scammer asking for the first and last months’ rent and sometimes the security deposit as well. The scammer then vanishes with the money, leaving the renter out of a lot of money and with nowhere to live. The second scam entails the scammer actually renting out a home or other property (such as units in a converted home or an apartment complex) that is already in foreclosure. The renters have no idea that they are renting out a foreclosed property until an eviction notice shows up from the bank, and by then the scammer is long gone with the money.
So what can an expected renter do to protect themselves from frauds and scams? There are many questions to ask and steps to take in order to make sure you won’t be scammed. Listed below are several protective measures for prospective renters to take.
- Verify the landlord’s identity at the county assessor’s office. This simple action will let you know if the person actually owns the property you’re looking to rent.
- Check with neighbors of the property. See how long it has stood vacant, as a longer time period might indicate a foreclosure property.
- Make a visit to the county recorder’s office. This will let you see if there has been notice of default recorded for the property.
- Be wary of a landlord who uses an answering service. If you pick up the phone to contact the landlord of a property you’re interested in, and an answering service answers the phone, you should be very wary. There are a lot of scammers who use an answering service, and then respond back via email. If the prospective landlord does this to you, you definitely need to take more steps to verify them.
Interviewing prospective tenants can be a nerve-wracking time for many landlords—especially if it’s their first time renting out an apartment—but they still need to make sure of the questions they can and cannot ask their potential tenants. Learn what not to say or ask a prospective tenant during your interview process:
- Any question that could potentially violate fair housing laws. This would include, but not be limited to, discrimination against the seven classes: color, race, sex, religion, national origin, family status, and disability. For example, you cannot ask a potential tenant about their sexual orientation as this could potentially lead to a discrimination claim. Also, a landlord needs to keep up-to-date on their particular state’s protected classes.
- You cannot ask if a tenant has ever been arrested. You can, however, ask if they have ever been convicted of a crime, which is different than if they’ve been arrested. By law, a tenant who has been convicted of a crime must answer questions about that conviction. Alternately, you can use a thorough screening process such as the one Houserie.com offers to get a comprehensive background check which includes a tenant’s criminal history as well.
- Don’t ask questions that aren’t part of your usual qualification or interview process. Have a prearranged set of questions that you ask all potential tenants and don’t stray from them. If you ask questions that are different than those you normally ask, a tenant can accuse you of discrimination.
- Landlords cannot ask if a tenant plans to have (more) children. This question would be considered discriminatory. A landlord should not care how many children a tenant might or might not have in the future and choosing a single professional over a family will make a landlord liable for discrimination claims that may arise.
All tenants want to leave a good impression on their landlords and, more importantly, maintain an excellent relationship with the person who owns the home they live in. Knowing how to be a good tenant will not only make your life with your landlord better, but it will also give you great references later when you move.
- Read and understand your rental/lease agreement. By fully reading and actually understanding the lease contract you’re about to sign, you can obey the rules of the landlord and keep them happy. By signing it, you must adhere to their rules and stipulations or risk eviction.
- Give all requests for repairs or improvements in writing to your landlord. Keeping good records of all repairs that were requested and fixed by the landlord is beneficial down the road in case of disputes.
- Keep your home or apartment tidy and clean. You don’t have to deep clean every single day, but be sure to make your space tidy and keep it clean. The look of your home reflects back on you and you want to make sure the landlord knows you are keeping their unit nice and neat.
- Try to love (or at least tolerate) your neighbors. Not only will this make your life easier, it will also keep any disputes or fights from happening with those who live around you.
- Buy a renter’s insurance policy. Landlords will really appreciate if you purchase a policy that will cover any loss. They will be saving money and you’ll be covered if anything should happen that damages or destroys your belongings.
All landlords, whether amateurs or seasoned professionals, may have to deal with problem tenants at some point in their careers. It’s a seemingly inevitable part of the landlord business. There are effective ways of dealing with tenant issues, and there are methods that just don’t work. Listed below are some of the best ways to deal with problem tenants.
- Professional behavior. First and foremost, you need to always behave in a professional manner, even if the tenant is screaming and/or making a scene. Be polite and nice to the tenant and hopefully they will calm down to discuss the issues. Always remember that this is a professional relationship.
- Better communications. Strive to start and maintain communications with the tenant, even if they don’t seem to want to talk to you. Many times—and especially if money is involved—the tenant will try very hard to avoid you. Make sure to keep the lines of communication open, and try different methods of contact, such as their cell phone, email, and face-to-face visits.
- Be aware of any potential problems. Visit the unit and listen to any issues from neighbors. Also keep an eye out for any maintenance issues or damage you might see on the visit. By learning of any issues as soon as they occur, you can evaluate whether you want to renew the lease for the tenants after their current lease period is up.
- Accurate and up-to-date records. By keeping accurate records of everything that occurs at your property/unit, you can refer back to them at a later date if you need to (for legal action, etc.).
- Purchase insurance. And not just for the property or unit, but also for contents (especially on units that come already furnished), accidental damage and even an emergency help insurance policy.
The skills to recognize a bothersome tenant can be invaluable to most landlords, as most people don’t just become a problem overnight. A certain behavior pattern will definitely show up when you start delving into their background, and there are a few tell-tale signs to look for when you begin your search of the potential tenant’s past history.
- Interview past landlords. Call and speak with the applicant’s past landlord(s) and listen carefully to their answers. If the applicant listed an individual as a landlord instead of a property management company, you need to be sure the person is actually a landlord and not a friend or family member. All too often, a problem tenant will try to hide their past bad behaviors by using a friend to act as the landlord.
- Confirm employer information. As with past landlords, problems tenants have been known to use friends and family to impersonate past or present employers, especially if they have recently lost their job. Make sure to have the potential tenant give at least two recent pay stubs. Also, call the current and even past employers to verify the tenant’s employment dates.
- Run a credit check. Another powerful insight into potential “problem” tenants is if they have little or no credit. Of course, younger tenants will more than likely not have a lot of credit, simply because of their young age. However, if an older tenant has no credit, be sure to run a background check and complete these other steps to ensure they are who they say they are. Many times, people who have an unsavory past, owe money to past landlords, have been evicted, or have a criminal background, will steal a social security number and use it to rent a unit. Houserie.com offers comprehensive background checks, including social security verification, credit checks, criminal history, and eviction checks.
There are certain reasons that allow landlords can keep their tenant’s security deposit. These are also things that tenants should watch out for, so that they can ensure that they get their deposits returned. A security deposit is essentially a sum of cash, usually equivalent to one month’s rent, which is given to the landlord to cover any damage that might occur to the property during the tenant’s occupation of the home. Tenants are able to retrieve this money when they leave, as long as they have followed all the rules of the lease agreement that they have with their landlord. There are a few situations where the landlord can keep all or some of the deposit. (Each state has its own laws regarding security deposits, and landlords should be up-to-date on their state’s regulations.)
- Property damage. One of the most common reasons that landlords keep a security deposit is property damage. The type of damage that would warrant a landlord to keep the deposit is not just normal wear and tear – it’s large and noticeable damage, such as large holes in walls, stains or holes in carpeting, major water damage to hardwood floors, damaged or missing smoke detectors, broken windows, broken doors, cracked countertops, and keys that aren’t returned at the end of the lease.
- Default rent. If a tenant refuses to pay or just leaves without paying their rent, landlords have the right to keep all of the security deposit, since most states stipulate this as a legitimate reason for keeping the security deposit. Keeping the deposit allows the landlord to cover the cost of the lost rent.
- Early rent/lease termination. Breaking a rent/lease contract allows a landlord to collect the full or part of the security deposit to cover the costs of the broken lease. However, this must be noted clearly on the rent/lease contract in order for the landlord to collect the security deposit.
A landlord’s responsibilities run the gamut of planning, maintenance, safety, and legalities. Most new landlords just don’t realize how much really goes into renting their property. Safety is one of the most important priorities, but a new landlord should also be careful about choosing the right tenant, keeping the property safe and clean, following state laws and regulations, and even creating a solid lease agreement.
1. Safety. Before even thinking of leasing out your property, bring in professionals to make sure it is safe and suitable for a tenant to live there. In particular, hire someone to look for bug infestations, electrical issues, gas leaks, plumbing problems, building code violations, and fire safety issues.
2. The contract. This is another of the most important steps a new landlord can take. The lease agreement is a great way to specify your rules regarding rent payment, policies on pets, damage, and renter’s insurance. It is also good to outline the eviction process you have in place and any other specific details you have for your property.
3. Insurance. Landlords must have special landlord insurance on all of their properties to cover the buildings and sometimes even the contents inside if the property is being rented furnished. You may need to check with your state, as most states have differing rules and regulations regarding landlord insurance.
4. Repairs and renovations. As a new landlord, you must get the property for rent suitable and ready for habitation. This can mean making necessary repairs, changes, renovations, and improvements to the property before even beginning a tenant search. This could also potentially attract a lot more interested potential renters.
5. Screen tenants thoroughly. Always be sure to check references (past landlords) and income information, and to run a credit and background check. If they’ve had any past bankruptcies or foreclosures, both should come up under the credit check. This is one of the most crucial steps for new landlords, and many do not conduct a strenuous tenant screen like they should. Houserie.com can help landlords perform comprehensive background checks quickly and easily, with minimal paperwork or time wasted! You’ll have peace of mind knowing that your tenant is reliable.
The tenant-landlord relationship has gotten a bad rap due to the number of dishonest landlords out there. However, with the right communication skills, both tenants and landlords can have a good relationship with each other that will benefit both parties. Here are a few tips and ideas to keep the lines of communication open.
- Customize the rent/lease agreement. Although you can purchase a basic lease or rent form from an office supply store like Staples, it’s a better idea to customize your own form using tenant-specific details. For example, make sure you note any pet restrictions, rent dates, late payment fees, or penalties, etc.
- Make sure you get more than one contact number from the tenants. It’s good to get more than one phone number and means of contact from your tenant so you can easily keep in touch with them. Ask for a home phone number, cell phone number, and even their e-mail address.
- Call or drop by every month or so to check on your tenants. This will let them know you truly care and are open to any issues that might come up. Some landlords never visit their tenants, which could make tenants feel as if the landlord doesn’t care at all and doesn’t want to hear about what’s going on. At the same time, do let the tenants know ahead of time that you’re planning on dropping in, so that they don’t feel like you’re “checking up” on them too often or disrespecting their privacy and space.
- Clearly communicate your intentions and expectations of the tenants. Make sure you tell the tenants what you expect of them; this will hopefully keep the lines of communication open and prevent headaches down the road.
- If you have a tenant who constantly is late on payments, approach them and ask them what the problem is. Did they lose their job? Do they have other money problems? Getting to the root of why they are always late with their payments will keep your relationship from souring and it might even get your late rent fee.
Rising vacancy rates in certain cities and the current state of the economy are two good reasons for landlords to invest in an effective marketing plan. Whether you have just a few rental properties or hundreds located across the country, having a marketing plan in place is a sound business decision. Listed below are four effective ideas for marketing your rental properties and your business.
- Create a website. If you don’t already have one, create a website for your business. This site can show off your rental properties, tell potential tenants a little about you and your business, and attract tenants all at the same time. If you don’t want to spend a small fortune on a website (for those landlords with only a few properties), search for a site host that is free or very low-cost. For example, Weebly is a good choice for a simple, free website. Or try GoDaddy.com for an easy, low-cost website option.
- Social networking sites. Facebook, Twitter, and LinkedIn are all useful mediums for marketing. Once you have your website up and running, start using these social networking sites to advertise your rental properties by adding relevant posts, articles, and videos for potential tenants to look at. Ask your friends to recommend your site to anyone they might know who are looking for a rental home or apartment.
- Online ads. Create nice online ads for your rental properties that are currently vacant. There are many online classified sites that are free or low-cost. Make sure to include pictures of the property and your contact information. A good, safe bet to try is Rentalroost.com. Another one is craigslist, but be careful of putting your email address in your information, because of spam and other unwanted email.
- Use a rental property manager. Though it can be expensive, hiring a property manager can definitely pay off in the long run. You can let them handle the marketing plan for you, and they can also complete tenant searches for your vacant properties.
Using a rental agent to list and show your vacant property can be a huge time and money saving step. While a rental agent does generally take a certain percentage of the rental income, the time saved by letting them handle the process of choosing a tenant, marketing, and other duties will definitely offset the cost. Here is a breakdown of why it might be advantageous for you to hire a rental agent:
- Choosing a tenant. A rental agent can handle the entire process of finding and choosing a tenant for your vacant properties – a process that is a hassle for many landlords. Because most experienced agents already have a procedure established, the risk of renting to an unqualified tenant is low, thereby reducing the hassle of eviction later down the road. This can also help with reducing late payments, damage to property, etc.
- Property management. A rental agent can also take care of everyday management of the property, including small repairs, renter questions, and any conflicts that might arise.
- Marketing. Listing ads, using social media like Facebook, or creating a website are all some of the tasks that a rental agent can do to market your properties.
- Collection. For landlords who live out of the state from their rental properties, having a rental agent who can collect rent is an invaluable benefit. The agent can coordinate with the renter to collect the rent – usually either in person or in the tenant’s mailbox. The rental agent can then deposit the income directly into whatever account the landlord has set up for this purpose.
- Saving time and money. By hiring a rental agent, landlords can focus on other parts of their lives while the agents handle the choosing of tenants, marketing of the business and vacant properties, rent collection, and minor property management issues. For those landlords who do not live locally, a rental agent is an important and effective solution.