I realize that this is a very basic tenet, but when times are rough, we don’t always follow it. The reason we screen tenants is to ensure that we, as landlords, will be paid, and that our property will not be damaged or destroyed.
What happens when the market is slow and you can’t find a tenant?
I’ve gone through periods where some of my units have gone months without being occupied. There were some applications, but I turned them down after screening them. Why? These tenants would have resulted in more work from me and my lawyer.
You don’t have to evict a tenant you don’t have!
It is always tempting during slow periods to drop your tenant standards, but that is what can get you in trouble. Avoid the temptation and continue to market your rentals. You’re better off taking a small loss then a huge one later.
The three most important things to look at when screening tenants are:
- Credit Report – Does the applicant have many of their accounts overdue? Do they pay their bills on time? This is a good indication of whether or not they will pay rent on time as well.
- Rental History – Contact previous landlords. Why did the tenant move? Did they damage the property? Did they pay rent on time? Were they “problem” tenants?
- Employment history – Does the applicant have a job? Can they hold a job down?
If you focus on these three points and do your homework, you will not have to worry about evictions or problem tenants. They will never get the chance to rent from you in the first place.
Note: This is not a perfect system, but neither is life!
BTW – If you’re looking for a great tenant screening service, for getting credit checks, rental history, criminal checks, and more, check out SmartMove.
Related posts:
- How To Lose Money And Get Your Rental Property Trashed By Your Tenants
- Lamest Excuses for Late Rent by Tenants
- Attracting Tenants with Incentives or Gifts
Article Author: Joshua DorkinJoshua has written 570 articles for us.
Visit Joshua's Website: http://www.biggerpockets.com/
Joshua Dorkin (@jrdorkin) is the founder and CEO of BiggerPockets.Mr. Dorkin's vision for BiggerPockets has helped to propel it into becoming one of the top real estate destinations online. His vision for the site and its future has brought national press attention to both Mr. Dorkin and to BiggerPockets.
Joshua Dorkin
{ 4 comments… read them below or add one }
wow! This picture is why people are sometimes afraid to invest in rental property. I have a friend who owns several and is selling in favor of vacant land and office condos.
One other point. I’m the MGP of a 50+ unit Section 8 (only) bldg, for which we have professional management.
Every prospective tenant (and others the tenant wishes to live in the unit) takes a drug test, and we have the right to request a re-test on each renewal. A positive result means no lease, or no renewal – no exceptions. I cannot overemphasize the importance of this. (Check the rules/laws in your location before you insitute these tests.)
I’m a small portfolio landlord from UK.
I’ve had a few problem tenants but i’m now slowly learning to not be so lenient on them and to take action as soon as they are late.
they always hae some excuse and they don’t make any effort to pay you. they could for instance sell half the stuff in the house. take on extra jobs etc. etc.
i agree that tenant screening is very important, we can’t afford to cut corners there.
If you end up with having a wrong tenant, not only your house would be in ruins but also your health. The pressure tension and stress that comes along is inexplicable. You end up in spending huge sums of money with wrong tenant. I am telling all this out of the practical experience that I had a few years back. Make sure that his financial capability is really good before entering into the agreement.