The majority of rental applicants are perfectly fine people and will make good tenants. Only a few will cause problems. Unfortunately, it takes only one bad tenant to push your profitable rental business into the red.
Despite the odds, when it comes to tenant screening, it’s important to be vigilant. Otherwise, you are leaving it up to luck.
Right now, the rental market is healthy, with both occupancy rates and rents on the rise. That’s prime season for bad tenants. These renters are clever, and desperate. You can outsmart these problem tenants by watching for these common tricks:
Criminal History, Prior Evictions, and Bad Credit
It’s no coincidence that tenant screening reports cover these crucial aspects of an applicant’s history. Any one would be a red flag. Don’t be surprised if you find multiple problems with the same applicant, as these issues tend to go hand in hand.
With so many professional landlords running tenant screening reports, which can expose a bad rental history, high-risk applicants tend to seek out less experienced, casual landlords who might be talked out of it. After all, the best way to hide this history is to not run the reports.
If you own a new or small landlord business, create a “big” image by running professional-looking rental ads, and informing applicants that you will run tenant background checks.
Watch for applicants who try to be charming. Flattery can be a red flag. After a landlord gets burned they will tell you that, at first, the tenant seemed so nice.
Sad stories are another way for the habitual problem tenant or one trying to hide a bad rental history to find their way into a rental unit. Landlords who sympathize and want to offer the tenant a break may come to regret the decision to forego a tenant background check. After discovering a bad history, there’s nothing to prevent a landlord from giving a so-so applicant a chance at redemption. However, that should be the landlord’s choice, after carefully weighing the risks.
Bad tenants also may come across as a little too eager to move in — like, on the spot — and will offer incentives for that deal. That way, you don’t have time to check them out. If your applicant is offering to pay higher rent, it may be because they don’t plan to pay rent at all.
One more common trick is to ask to pay the deposit or other fees at a later date or in increments — other possible signs that the tenant is not planning to pay. Tenants who have tried this trick before know it will take you weeks or months to get them out. Meanwhile, they live for free at your expense.
When filling vacancies, pay attention to the image you create, because that will dictate the type of tenant you will attract. Problem tenants look for signs of neglect or an unprofessional landlord.
Along with running tenant screening reports, speaking with current and previous landlords is a crucial part of tenant background checks. Most rental applicants realize that they will be asked to provide references. Listing friends rather than disgruntled landlords is an efficient way to hide the truth.
One of the best ways to avoid this scam is to ask for multiple landlord references, including the current landlord. It’s far more difficult to stage a series of fake references than just one.
Come up with some preliminary questions to ask the contact during the interview. What will seem like small talk may actually tip you off to a fraudulent reference. For instance, you could ask about the characteristics of the property — like how may units are in the building. That question is simple for the real landlord, but might stump an imposter. You may be successful in tripping up a phony reference by leading them with partially inaccurate information. Try mixing up the dates that the tenant supposedly lived there. A fake reference won’t correct you.
Also, let applicants know that you require a tenant background check, including a rental application. Warn applicants that including false or misleading information on the rental application will be viewed as fraud. List the possible consequences. Be sure to warn the person before they start to fill out the application, rather than at the end once they’ve committed to a lie.
At the same time, encourage tenants to tell you the truth so you can discuss options with them. Few applicants will have a perfect history; the secret is in knowing what you are dealing with so you can assess the risk. An applicant who is honest and forthcoming may be worth further consideration.
Tenant, or Guest?
Sometimes a tenant’s bad history catches up with them. The only solution at that point is to move in with someone who looks good on paper. What better way to avoid tenant screening?
Unfortunately, that tenant could wind up the only one left in the property, could harm others, or may damage the unit.
Every proposed adult occupant needs to fill out a rental application, undergo a tenant background check, and sign the lease agreement.
There also needs to be a provision in the lease agreement that spells out the rights and responsibilities when it comes to guests. Tenants need to understand that they are putting their own reputations in jeopardy by helping a friend or family member scam the landlord. Make sure your lease provisions include the right to ask for a rental application and to run a tenant background check, including a criminal background check, on long-term guests.
Landlord Tip: It’s possible to accomplish many of these tenant screening strategies at one time by participating in a local Crime Free Multi Housing program in your area. Coordinated by local police, this certification program allows landlords to assess risks, learn to spot crimes specific to the area, attract the best applicants with the focus on safety, and access sample lease provisions that discourage bad tenants from applying in the first place.
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.