BiggerPockets

Here's how I do it.

1. Screen them on the phone
2. Look at them - tattoos on the face or fingers or baggy gangster style pants - hit the road!
3. Criminal Background Check (including checking for evictions and previous lawsuits they've filed)
4. Credit Check (if appropriate)
5. Employment Check (or proof of government income)
6. Reference Check

Mike

The only part I do not do is the credit check. When they tell me they have been foreclosed on and filed BK and credit score is 420. I would say that the credit check is going to be a waste of money.

I would agree the credit score is not particularly important, but the MOST important part of the report is their payment history, along with outstanding balances. Just because you verify their source of income, doesn't mean you'll see a dime of it... I see collection items all the time for two to three cell phone companies, fast food restaurants, even the library. If they aren't paying the small stuff...they aren't moving in to one of mine. (I DO ignore medical bills, and possibly even a bankruptcy, depending on how long ago, and what their recent activity look like.

As to public assistance, a huge caveat: This is absolutely NOT a guarantee that you will be paid!. Read the fine print (normally, you utilize your own lease PLUS an agreement that the provider requires, such as a HAP agreement). If the program terminates assistance to the household today, you get no more money from the program! I once made the mistake of trying to have the caseworker encourage the tenant to abide by a few simple rules...you know, No dogs (especially obnoxious constantly barking ones!), no extra adults living there (like three other waifs). The tenant " went off" on the caseworker, and got themselves terminated from assistance. Nearly two and a half months and three thousand dollars later (in lost rent and legal fees) we got possession back.

Solution: A) Don't accept ANY assistance or B) REQUIRE a personal guaranty/co-signor ON YOUR LEASE from a qualified individual, regardless of the source of assistance, because without the assistance they will not meet your income requirements, nor do they meet your minimum credit criteria (typically).

Do you guys find the current landlords give good references? Or do they gloss over problems to turn their problem into your problem? Do you try to contact previous landlords, ones before the current one?

Jon

We always TRY to check at least two prior landlords, but it can be difficult to ascertain if they are legit LL's or just a friend. We always look at prior addresses reported on the credit report to see if everything jives, and, for local addresses, cross check the tax records for the owner's name, and try to contact them directly. I have gotten derogatory comments from prior LL's, but it is rare indeed. I usually learn much more from fitting the pieces together and figuring out the truth... Usually a pattern will show up: responsible, or Not.

Another point to keep in mind- lawyers being what they are, and all, as a PM you have to be VERY careful about exactly how you respond to reference requests. You can easily shoot yourself in the foot with a discrimination complaint or worse. Report just the DOCUMENTED facts, no opinion, conjecture, hearsay, or malicious rants!

Report just the DOCUMENTED facts, no opinion, conjecture, hearsay, or malicious rants!

You sure know how to take the fun out of things. When someone rips me off, I tell anyone and everyone that asks. In fact, I once had a particularly HORRIBLE tenant complain in court to the judge that I called her a " worthless scumbag" . When the judge asked me if it was true, I said " I did and she is" . Of course, that has no bearing on anything and the scumbag was still evicted. I despise people that rip me off. In my opinion, it's no different than someone breaking into my house and robbing me at gunpoint. There is no discrimination in talking straight about scumbags. I don't discriminate based on race, color, creed, etc, etc, etc. A scumbag is a scumbag, regardless of their color.

The tenant told me they moved because the LL wouldn't fix certain things around the house.

That's the most common lie told by applicants. If I had a dollar for everytime I heard that, I wouldn't need any rental properties!!! Of course, occassionally it is the truth, but most of the time the tenant is LYING!

We just evicted a scumbag from one of our nicest SFHs. In court, the deadbeat perjured himself and listed a bunch of things that were wrong with the house - all of which was total fiction. Of course, I didn't get to respond to the accusations because it wasn't relevant to the eviction. After the proceeding, I told my lawyer that all the accusations were pure nonsense and her reply was " they don't have the integrity to take responsibility for their actions, so they've got to blame someone" . My lawyer specializes in evictions and she hears this crap even more often than I do.

Mike

I certainly hope I never turn out to be that way either. So many of them make all of the mistakes that MikeOH explains how to avoid and then they end up blaming the tenant for their bad business decisions. In my mind, if I allow a worthless scumbag into my house and become a tenant and they end up ripping me off for 5K in rents, then I certainly failed somewhere and I need to look at my business practices.

It's like blaming your dog for peeing on the floor after he stood there waiting to go out for an 1/2 hr. These people are irresponsible, you just have to do everything possible to get the best irresponsible ones you can find. These miserable LL's got greedy and only saw $$. I have had several tell me that if they get 8 months worth of rent a year on their units, then they are happy.

One guy wanted to sell me 4 of his SFR's. He was getting $375.00 per month + utilities. The tenants were responsible for all yard work, supplying their own appliances and they even had to get their own lawn mowers. I went to look at these places, 2 were empty with perspective tenants waiting to move in and they were in horrible condition. Right down to dirty floors, actual loose dirt and food still on the floors and he was ready to have these people move in. On one home the front porch roof was falling in and this is the norm in my area, not the exception.

Even on the street there is a code of conduct. All the years I spent with these people, they still value respect, if you take advantage of them, you are the trash in their eyes. Treat them fair, as a customer and explain the rules 5 times. Many times they will treat you fair. And as MikeOH has so often explained, don't give them an inch or you will pay dearly for it.

Oh boy....

I have several clauses in my rental application that could help. Maybe you have some:
[list]All tenants must fill out rental application.
No more than 2 people per bedroom.[/list:u]

If you don't have those, check extra hard their references. Even consider stopping by their current place to see how clean they keep it. You can be in a tight spot if you have not disclosed your screening process prior to accepting the application.

Not sure about the unsupervised minor. Good question for an attorney.

I will be interested to see what the other guys think!
:shock:

This is the holiday season and many people are off. I could easily see that you would have a hard time showing them the rental and/or doing the screening until after the New Year. My rental company has given me the week off -- I've got a great boss! Look in the mirror and see if you don't have a great boss also! Tenants are fickle and have the attention span of a 2 year old. If there is a delay, they'll lose interest and move on.

Once you do show them the rental, give them an application to take home. Tenants are fickle and have the attention span of a 2 year old. Did I already mention that? When I show a house to a person that I don't want to rent to, I give them an application to take home. Do you know how many of those applications I've gotten back in 4 years? Maybe 2.

Sounds like a great group. :roll: If you do get the applications back, screen everybody thoroughly. Chances are, they won't all be qualified. If they are qualified, then you'll need to verify their government income (and hud eligibility) and that could take some time. They probably will need to bring you proof of whatever government programs they are on and I'll bet they can't find that. Section 8 does not allow friends to live with the Section 8 tenant, so I'm sure that isn't going to fly either!

Finally, if all of this isn't enough, I don't see how a 17 year old can legally sign a contract. Could you rent to a 15 year old? An 8 year old? Where does it end. I would certainly want to know the legalities of that before renting to a MINOR. It could easily take a couple of weeks to get my schedule to line up with my attorney's schedule and then the attorney might need to do a little research when he has time.

I just don't see this working.

Mike

Boy, have you got a funny take on this. My experience is you fix something, you make something nice it is either stolen or smashed and destroyed by the tenants. Is it the landlord " letting their tenants live" this way or is it the low-life, unresponsible tenants that create their environment?