Some landlords take unnecessary risks. Unfortunately for some, the risk may be inadvertent. Why? Because they believe that, as property owners, they always have one trick up their sleeves: They can always evict a bad tenant.
If that thought has passed your mind when you are choosing tenants, it may be time to rethink your tenant screening strategy. It’s like relying on a roll of the dice. It is only a matter of time before it will fail.
In law school, first-year students are taught that real estate ownership is like a basket of eggs, each representing a different legal interest.
One egg may represent the right to pass the property on to heirs; another represents the right to occupy the property free from interference. It’s that right that is passed on to tenants through a lease agreement.
Handing that precious egg off to a stranger who has not been properly vetted is a significant risk. If it comes back broken, well, you get the picture.
Rules for eviction vary from state to state, but in virtually every case the landlord has to prove there was a violation of the law or of the lease agreement before recovering the property. Amassing that evidence takes time. Waiting for a hearing takes time. Landlord tenant laws tend to favor tenants. Sympathetic judges hold landlords to the highest letter of the law, and have been known to dismiss eviction cases over seemingly petty technicalities. Tenants bring up every complaint imaginable regarding the condition of the property in order to offset a judgment or defeat the landlord’s claim.
Eviction is never a foregone conclusion. In reality, eviction is a long shot. And a costly one at that. Even if a landlord “wins” back the right to possession and removes a bad tenant, that victory comes at a cost. The property may be damaged and rent in arrears. Now, lawyers need to get to paid. Imagine if that money was available for new appliances, or that the property was churning a profit rather than sitting idle.
Yet, landlords who believe the eviction myth become complacent when it comes to choosing a good tenant, and are far more likely to cut corners with tenant screening. That’s a gamble that isn’t worth taking.
Rather than relying on eviction as some sort of safety net, always view applicants as if they will be long-term tenants, because in reality, each one is potentially going to occupy the property, exclusive of their landlord, for a year — or many years to come. The time spent screening tenants is a small price to pay for a little added insurance.
Banks don’t loan money to people who can’t prove a high likelihood of repayment. Likewise, landlords can’t afford to rent to someone if there’s a significant risk the tenant will have to be evicted. Verify the rental application. Run tenant screening reports. Check references. Because when it comes to a real estate investment, no one wants to wind up with a basket of scrambled eggs.
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).
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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.