How Bad Tenants Find New Landlords

by Chris on November 5, 2012

Talk to any group of landlords and you’re bound to hear horror stories about professional tenants who rip off one landlord after another, leaving behind a trail of trashed rentals and serious financial losses.

How do these bad tenants keep getting away with it?  It’s harder than it seems to trap a problem tenant. That’s because there is no one factor that signals a bad tenancy.  But when several factors combine, it creates the perfect storm.

Problem tenants target small landlords

If you put yourself in a problem tenant’s shoes, you’ll see that their first priority is a roof over their head.  They may not have started out with a desire to cheat landlords, but now that they have, they know they’ll have to struggle to get housing. 

These tenants often will avoid properties with on-site management or leasing offices, like large, well-managed apartment complexes.  Instead, they will look for small landlords or neglected properties.

Problem tenants target landlords through:

Unprofessional-looking rental ads;
No mention of rules to qualify for a lease;
Properties with poor curb appeal; and,
Long-term vacancies.

Avoid these problem tenants by considering the message you send with each step of the rental process. 

The rental ad — the first real communication with the applicant — must be detailed and warn applicants that they will have to undergo a tenant background check,  references will be verified, and tenants will have to follow specific rules.

Make sure your rent is squarely competitive — if it’s too low, it signals a lack of confidence.  If it’s too high, that will scare away good tenants because they know they can do better.  Instead, you will stack the applicant pool with desperate, potentially problem tenants — they don’t care about the high rent, because they’re not planning to pay any of it!  Problem tenants look for long-term vacancies because they believe you are willing to settle.

When applicants call, follow a strict protocol of prequalifying questions. Why are they moving? Are they moving before the end of their lease? How frantic are they to find a place ? The answers can tip you off that they are having a hard time with another landlord.

Follow through with a face-to-face meeting prior to the property tour.  Forcing the applicant to follow these steps will discourage those who are trying to pull one over — they can find easier prey.

Don’t overlook the importance of curb appeal in dissuading a problem tenant.  The property doesn’t have to look like a palace, but if it is well-kept, tidy and feels secure, applicants understand you have pride of ownership.  They will assume you will be watching over it — and that spells trouble for the problem tenant.

It’s crucial to have the applicant complete a rental application.  This document not only provides the best look at the applicant’s history and character, it also contains a declaration giving you permission to verify this background information through tenant screening reports and references.  Not all landlords maximize the value of these tenant screening tools by comparing the information with the rental application.  A little detective work can reveal that the applicant tried to hide something.

Watch for signs that your rental applicant is helping a friend or family member who is a problem tenant.  Those with bad rental history often hide behind another applicant, then move in as a roommate or long-term guest — without having their name on the lease, or undergoing a background check.

There is no rule that says a landlord can’t rent to someone with a less-than-perfect background if they choose to.  Smaller landlords are more likely to show compassion — one more reason they become victims of repeat offenders. In evaluating such applicants, the real measure of their character is whether they were forthcoming with the negative information, or whether the landlord had to mine the bad info after arduous research. 

The important thing for every landlord is to know what they are dealing with and to take steps to protect their investment — like offering a shorter-term lease to allow an applicant to prove their tenant-worthiness, or signing up to Report Tenant Pay Habits to keep a tenant accountable for on-time rent payments.

Remember, while you are focused on evaluating rental applicants, the professional tenants are watching your every move — to see if you’ll be their new landlord.

This post is provided by Tenant Verification Service, Inc., helping landlords reduce the risks of renting with fraud prevention tools that include Tenant Screening, Tenant Background Checks, (U.S. and Canada), as well as Criminal Background Checks, and Eviction Reports (U.S. only).

Click Here to Receive Landlord Credit Reports.

Disclaimer: The information provided in this post in not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.

{ 1 comment… read it below or add one }

orlando November 6, 2012 at 8:15 pm

excellent article. I live in BC but have a relative co manage the unit in Alberta. Your articles have great insite and provide good ideas.

Thanks,

Orlando

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