Tenant Screening: Check Those Tenants Out!

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The usual landlord/tenant relationship goes something like this.  The tenant rents an apartment, pays the rent, the landlord maintains the property and all is well.  The times that the landlord/tenant relationship goes sour can often be traced back to the tenant screening process.

Bad tenants usually do not just develop overnight, they have been bad tenants for a while and they leave a trail.  Your job as a landlord is to sniff out this trail before you allow them in your property.  You can save yourself many headaches by rigorously screening your prospective tenants.  In fact, I might even go so far as to say that tenant screening is the key component to being a successful landlord.

Bad tenants may present themselves very well.  They may dress and speak well.  They will say all the right things.  They may even have cash in hand and be ready to move in.  When someone is holding $500 in front of you to move in it, can be very tempting.  Do not do it!  Screen them!  Screen everyone thoroughly.  Check every reference and verify everything on their application.  Oh, you don’t use a written application?!?  Well there is your first problem.

Here are some tips when screening tenant applications:

  • Pull credit and criminal history on everyone.  This is your first line of defense against the bad tenant.  Compare the data in the reports you receive with what is stated on your application.   Does it match?  If it does not, dig deeper.  Why is the info different?  If we discover lies, that is immediate cause for disapproval.
  • Verify their work history.  Do not do this by calling the number they have listed on the application if you can help it.  A friend may be waiting for your call on the other end.  Instead, call the main office and get transferred into the department where the person says they work.  In this way you can avoid the “friend” set up.
  • The current landlord may want them out and will therefore lie to you.  It is best to talk with the previous landlord or to get an accurate view.
  • People forge documents.  It has happened to us.  Do not believe the paycheck stubs, letterhead, whatever.  Verify everything with the issuer.
  • The old adage is true; do not judge a book by its cover.  We had a well dressed, well spoken man fill out and application, say all the right things and pay the application fee in cash.  He must have assumed we would pocket the fee and not check.  He had never paid a bill in his life.  Even the phone company was after him!  There are professional scammers out there, be vigilant.  It would have taken us at least 4 months to get him out.  I know that time frame could be a year or more in some parts of the country.
  • Ask their place of employment if there are any planned layoffs.  We had a tenant get laid off the day he was approved to move in.

Most people are good, tell the truth and try to do the right thing.  Your job is to weed out the bad ones by finding the lies.  And they will lie to cover up their past, and get into your property.  Evictions are neither fun nor cheap.  So save yourself some hassle, set up a rigorous tenant screening process.  Also, be sure to treat every applicant in the same manner by using the exact same screening process.  Don’t set yourself up for a discrimination lawsuit because you treated one perspective tenant differently.

Until next time, Happy Investing!

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About Author

Kevin Perk is co-founder of Kevron Properties, LLC with his wife Terron and has been involved in real estate investing for 10 years. Kevin invests in and manages rental properties in Memphis, TN and is a past president and vice-president of the local REIA group, the Memphis Investors Group.

14 Comments

  1. Great info Kevin. Sometimes folks take the first person that walks in with cash. Bad mistake!

    You were absolutely right when you said to verify everything. Folks will give you a cell phone for their employer. This person may turn out to be a relative or a friend in reality. I always want the company phone number.

    I once had a tenant that knew she was getting laid off in less than a month from the date she moved in. The employer did not volunteer that information, so you are right when you said to ask if they expect continued employement of this applicant.

    • Kevin Perk

      Sharon,

      Good points and thanks for commenting.

      It is amazing what you learn about human nature after just a few years in this job. Most people are good, but you quickly learn to verify and take very little at face value.

      Take care,

      Kevin

  2. Very good points. I wish we had a tenant score system to see how tenants behaved in previous rentals. Until then, verify everything. A bad tenant costs a whole hell of a lot more than no tenant.

    Jason

  3. Great post, Kevin.

    Beyond this: Landlords, PLEEEEZE pass on bad tenant information. When you have a problem tenant, update their info through tenant screening services and on their credit report so the rest of us don’t end up putting them into our properties.

    The only way to know if a tenant is bad is if their past performance shows up in our screening processes.

    Thanks for the article.

  4. Thanks for the info. I’m just getting started in real estate investing, after a hiatus for 20 years.

    I have a staffing business where we screen everyone. I concur that you would be amazed at the results you sometimes get.

    One thing we have found to be useful is to not ask for the standard reference but to ask for the last three supervisors at work, along with their number and email address. Any reluctance to provide this should set off a warning alarm. Then you ask the person “when I call these three people, what do you expect they will say about you?”. When you make it VERY clear that you plan on contacting all of the references (not their friends) you would be surprised how many people bail on the process. Saves the cost of the background check.

    Again, thanks.

    • Kevin Perk

      Good advice Scott.

      We have had people bail or just hang up the phone once they find out we will check them out. Who rents to those people?

      Thanks for reading and commenting,

      Kevin

  5. Online public records are often free and a good place to start. Just search “(name of state) courts” to find what yours has online. It usually doesn’t take long. Then save it as a favorite. Also, when I pull credit I look for past addresses tenants may not have listed on their application. Once I called a former landlord I found that way, he said “they trashed my place, owe me $5000, I wish I could find them.” I happily told him where the guy was working now.

    • Kevin Perk

      Yes, always dig deeper when something does not look right. Good for you for thinking to check out those unlisted addresses, that tenant sure will be surprised when the former landlord shows up.

      We use free online data bases as well. The Memphis/Shelby County courts have almost everything online.

      Thanks for reading and commenting,

      Kevin

  6. Kevin,
    Thanks for all this great information you shared.
    I totally agreed with your views, renting to the wrong tenant is really a disaster in the career of any landlord.
    Tracey.

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