Professional Tenants: 8 Tips For Screening For These Nightmare Renters

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A couple of weeks ago I wrote an article here on the BiggerPockets Blog entitled Landlords… How To Proceed When The Rent is Late! While the article had some good insight regarding actions you should be taking to protect both your rent and property when the rent is late, one of the comments to that article (thanx Denise) shared a link to the actions of a real life “Professional Tenant.”  You need to read this article: Landlords say Newark man refuses to pay rent, trashes apartments, then ties them up in court

Once you have read this article I am sure that you are now very prepared to pay attention to those actions you MUST be taking to protect your property from “professional tenants.”  If you don’t think there are professional tenants in your area, just read through the comments of many of the posters — they will scare the &*$# out of you!

Now for some recommendations to arm you to do battle with tenants who believe that by virtue of your ownership of the property you should become their private charity and allow rent free living.

8 Tips For Protecting Yourself Against Professional Tenants

1.  SCREEN, Screen, screen… every applicant… and everyone who is over the age of 18 who will be residing in your property.  And, what do I mean by tenant screening?  Simple…

2. Ensure that your application is completed in its entirety for each applicant.  Be sure to have the applicant sign documents allowing you to pull credit reports and contact current and previous landlords and employers.  If they refuse toss the application.

3.   Call every landlord and employer reference given.  And, if calling doesn’t work then send a referral request… not just asking for a referral, but asking specific questions, like: Has the tenant ever been late on their rent?  Have you ever taken this tenant to rent court?  If so, how many times in the past year?  I think you get the picture here.  These questions are not easy to avoid and will provide you with critical information needed to evaluate the quality of each applicant.

4.   Complete a criminal background check.  In today’s virtual world almost every community now posts information regarding a persons run-ins with the law.  Remember about the only non-protected tenant class left are those individuals with criminal records.  Take advantage of this information.

 5.  Do an unscheduled walk-through of their current residence.  If you don’t like what you find…. don’t accept them as your tenant.

 6.   Your lease must be clearly written and defensible.  If your lease has not been reviewed by a local real estate attorney, it needs to be.  The last thing you need is some amateur Perry Mason, like the guy in that article, picking apart your lease in front of a judge.

 7.  If a prospective tenant passes your muster, (remember many more should fail then pass) then the next step is to sign the lease and have them move in.  This should not be a transaction that is conducted at your local McDonald’s, because this is a critical step. 

You must ensure that the lease signing occurs inside the property.  Because, part of you lease signing process will include the tenant conducting their own move-in inspection for the purpose of defining – in their words – the condition of the property on the day they moved in.  And guess what?  While the tenant is busy looking the place over you are going to be taking pictures of them in the property and of course of any deficiencies they may have found.  If there is something that you need to correct as part of this process get it corrected.

 8.  Make sure they acknowledge every page of the lease by having them initial at the bottom of each page.  If that is not good enough and there are specific clauses you want them to acknowledge then make sure they initial each clause.

I am sure there are other important insights that others have used and hopefully they will jump and share, but the bottom line here is this…

Your application process is intended to weed out the bad tenants up front.  If you do this right you will succeed most of the time.  For those instances where you end up with the worst case “professional tenant” scenario, the lease-up process is intended to give you ammunition once you find yourself defending the condition of your property in front of a judge.

Be diligent, do your due diligence, use a bullet-proof lease and robust processes and you should fair very well.

Best of Luck!

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About Author

Peter is an active and successful real estate investor in the Baltimore Maryland region for the past 8 years and is one of the founders of The Club Mastermind a real estate investing coaching program focused on local coaches helping investors to perfect their game.

22 Comments

  1. Great tips, Pete. It seems that to prevent you from running into a situation like the one people have faced from tenants like Mr. Newton, you may even want to videotape the entire walk-through. Thoughts?

    • Josh,

      Videos are a great idea… However, I have spent enough time in front of judges to know that asking them to manipulate a video camera or viewing a laptop is not a winning proposition. Most judges just want to move on to the next case… and if you ask them view your video not only will this take up their time, but heaven forbid if they can’t get the device to work and as a result they look foolish in front of the court.

      With pics its simple… you hand them to the baliff and the judge just thumbs through them.

      Pete

  2. Great tips,
    or just hire a good property manager and leave it to a local professional.
    They are usually very reasonable and make life a breeze !

    Best;
    Reggie Lal

    • Reggie –
      For every investor who recommends using a professional property manager to make your life easier, I’ve got an investor with a horror story caused by another property manager. I’m not saying that all managers are bad – in fact, there are many great ones out there – but if you don’t know what you’re doing and aren’t making sure your management is doing just the very things that Peter endorses above, you can find yourself in the same exact situation as is shared in the article cited by Peter in the first paragraph.

    • Reggie,

      I hope your comments are the result of great experiences on your part… because if that is the case you have mastered the art of finding great managers.

      If not… Josh said it all.

      Pete

      • Sorry but my experience has been negative with regards to Property Management Companys. I’ve used two–both large, professional ones, and they’ve cost me money, tenants, and a lot of aggravation. I now manage my single family home rental myself.

        If you must use one, and certainly there are those that must, then make sure you have a reasonable termination clause in the management agreement.

  3. James Gefke on

    #5. I couldn’t agree more with visiting the prospective tenant’s current residence. While I have had good luck it seems like more investors I know in my market (Milwaukee, WI) who have adopted this policy have avoided a lot of potential headaches.

    #6. The rental agreement. Again, I have been fairly fortunate and have used different leases but the one I use is written by a Wisconsin attorney and landlord that does not conflict with any of the state statutes. Unless you are very familiar with the landlord/tenant laws and provisions in your state I would avoid trying to reinvent the wheel by creating your own. Boilerplate leases with seemingly reasonable provisions that are clearly stated and understood may give you problems in future if they violate or are inconsistent with the statutes of the jurisdiction you are operating in.

    Great article! Great advice!

    • James,

      Thanx for the feedback and insight from the trenches.

      Hopefully others reading this article and comments like yours will benefit and be able to avoid professional tenants.

      Pete

  4. Great post, Peter! Here in Los Angeles, we have a considerable amount of prospective residents who do not hold traditional jobs (e.g. actors, writers, singers, models, etc) which makes verifying employment a little more of a challenge. Our firm compensates for this situation by requiring the prospect to submit one of the following: a) Three original check stubs from three consecutive months, showing income of 3x the rent amount for each month or b) three consecutive months worth of bank statements showing monthly deposits in excess of 3x the rent amount. If the resident is accepted, the documents are then scanned and uploaded to the residents online tenant account for future reference by the property owners. _Trevor Henson

  5. I would suggest a number 9. Since the topic is professional tenant. I would cater the interview with them to so that they do most of the talking and find out what type of person they are. Do they blame others? Why are they moving? did the landlord let them down in the past? Having a criminal history or bad credit does not make a bad tenant. Bad things happen to good people, but does the tenant have a sense of entitlement? Are they self reliant or do they expect you to take care of them like their Mom would.

  6. I have a friend going through a similar experience right now. She rented out her home in Seattle and now her tenant is acting as if he owns the house and has caused serious damage to the property. Number 5 is a great tip, although I am not sure if many people would be willing to do it!

  7. If you can’t pass by a potential tenant’s current residence don’t forget to at least take a peak inside of their car. How someone keeps their car (inside and outside) says a lot about how they will keep their house.

    When I was getting ready to take on my first tenant in a 650 square foot downtown condo I met the potential tenant and broker for one last review of the lease and I pulled last minute when I saw a banged up car with a mess of papers, clothes, coffee cups and bags strewn all about. I don’t know how the tenant would have turned out but I’m glad I avoided them.

  8. I leased purchased my property to a Professsional con-artist on scamming the landlord. She knows every loop hole to live in my house without paying and so far she’s getting away with it. There are no laws to cover the landlord, only the tenant. How is that fair? When an agreement is signed for a year and the tenant terminates it, just because, and won’t move out. Hires an attorney to continue to scam you. Your paying the mortagage for her to live in your house. Someone please help me to get this person out of my house. The stress is more than bearable. I just want her out. Plain and simple. Cut my losses and NEVER lease another piece of property ever again.

    • It’s terrible that one person can ruin a potentially great investment vehicle for others. I have found that the majority of tenants are fairly decent, maybe a few late payers or someone moving out early but that is generally the worst you’ll get. One really bad tenant can cost more time and money to handle than 20 or 30 decent ones. You shouldn’t give up on real estate because you started out with a bad tenant. If you do the items recommended in this article bad tenants will be a truly rare occurrence. It sounds like you need to contact an attorney immediately if you have not already. I hope it works out for you.

  9. I think the most important part is he/she has a decent job at a decent company. I have met a few people who offer are super nice when you talk to but they work for a mom and pop company, does drive a decent car, very eager to move in to my condo, like totally fall in love with the space, this is red flag. If she/he is eager or trying hard to make an impression, something is fishy. Also, do not look at their car, handbag, these are very easy to rent to borrow from friends. The only thing you cannot fake is your real job, if you work at Google as a senior engineer, then this is a real deal. Make sure to talk to his manager at work, call the main number and ask for transfer, do not call a work number they give to you, ask where they work, google the main number and ask for transfer so that you know for sure he/she works in this company. I have a friend who met something claims work for EMC, gave a work number to call, turned out to be his friend’s cell phone number, you can easily find out EMC’s main number and ask to transfer to him/her, most company do, at least they would tell you, this person does not exist. Also, if it is a big company, you will always find a friend who also works there, you can have this friend to do internal search. This is not too much work, maybe a few hours, but will save you years’ headache and pain.

  10. Great article! How do you handle calling current or past landlords that are just a cell number? If it is a management company then that is great. But, a cell number could be his best friend posing as a landlord. Do you have a way that you can verify that this person is the actual homeowner?
    I usually call them anyway, but take the reference (especially if it is a great one) with a grain of salt.

    • Hi Michelle,

      Here’s a great tip from a BP thread from awhile back originally posted by Rob. K that may help give you some ideas handling the scenario you presented:

      “One good thing to do is call the alleged landlord and say you are calling because (prospective tenant) listed them as a reference. You don’t need to say it’s for a rental house. A “reference” can be for a lot of things – new job, adopting a puppy, carrying a gun, etc. If they are the landlord, they will say so. If not, they might get tripped up right then.

      If they are a fake landlord, but playing along, ask how long the person has lived there. Now, if the tenant listed the rent as $900, say, “It says here, the rent is $850. Is that correct?” This could trip up a poser as well.

      As far as your current application, mine asks “has a landlord ever filed papers against you in court?” This is different from an eviction as most court filings never get as far as an eviction. I don’t want anyone that has had a landlord go through the BS of going to the court and filing papers. Also, most people wrongly think that an eviction means all of their stuff was thrown out on the lawn by the court. They think if they move out five minutes before the sheriff arrives, that’s not an eviction.

      I would automatically reject your applicant for the court filing before ever calling a previous or current landlord, real or fake.”

  11. I signed a one year lease for a basement space with a private refrigerator, bath and bedroom in a residential townhome (found on Craigslist). The only shared space was the laundry room and had kitchen priveleges. The basement living area was had enough space for a small TV/sitting area and it had a wall with kitchen cabinets. I paid a one month security deposit and next month rent. I moved in on the 1st of the month and moved out on the 20th. I moved my belongings that same week but never unpacked,or unwrapped any boxes. I never spent the night, never lived there or used any facilities. The landlord verbally added “access rules” that were not in the lease. The landlord wanted to keep used paint and brushes in the bottom of my refrigerator for touch ups as needed, and to use one side of the cabinets to store personal items and will have access anytime to access the back door/patio. When I explained my dissatisfaction, I recieved a email, that my lease is terminated in 30 days, stated I have to pay the next month in full due the requirement of a 30 day notice to terminate and if I didn’t I will get a summons for court. I left quietly and put everything in “move in” condition. I told the landlord to keep the one month rent even though I never lived there, but I wanted my deposit back and I will not be paying the next month rent. I requested a walk through to return the keys and the return of my deposit if no issues are found. I was denied until the end of the next month. WHAT CAN I DO?

  12. Thanks for the attached article about the creep in NJ and for the tips. We are a young couple who mistakenly rented to similar professional tenants. The wife, though his little puppet, was also in on it. This creep is probably reading and learning about how to make more money/spend more money/time that belongs to innocent landlords…I’m sure he looks up to the Newton guy. I He created problems and then blamed us, and wouldn’t allow us to properly fix them/claimed problems that never existed in the first place. We feel completely used, abused and almost “raped” because lawyers suggested we just pay him off to get him off our back and so we don’t lose more in lawyer fees. He/they makes me sick to my stomach…and the worst part is, now I have lost my innocent trustworthiness just because of solid creeps (husband and so-called wife)…. they can get away with bullying others because the system allows for it because of the costs in defending oneself are too exorbitant, this guy gets to “win.” Our biggest hope is in Karma. Now where is that bus?

  13. Had a friend who rented out his garage to a couple who decided to start a laundry service (ran up the water bill to an insane amount, also didn’t pay the rent).
    He finally had the water turned off to the whole house in order to get rid of the freeloaders. The renters tried to take him to court for “cutting off the water”, but since he was also living without water ( “couldn’t afford to pay the water bill”) the courts wouldn’t do anything. They stuck it out a few months, but finally left.

  14. Fred Conway

    So this may seem like a stupid comment, but has anybody tried to enforcer technique for getting “professional” tenants out? The enforcer technique is change the locks, move out all their stuff or any other means of force.

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