When approving new tenants I do my best to screen out people who will not take good care of my property, in addition to screening for income, etc. My single-family home properties are not high-end but neither are they low end. I keep them very well maintained. I often get applicants who are moving from a house they have recently sold because of divorce. Because these applicants have no past landlords to contact and may live out of the area, I really have no good way to check on them aside from their financial background. I have approved these types of tenants in the past and though most are solid some are careless with my rentals and cause more wear and tear or damage than I am comfortable with. Recently I have been requesting a double security deposit from these type of tenants but most do not follow-up.
I would like to know how other landlords check on applicants who are recent homeowners with no rental history .
Can you visit their current place and see what condition its in?
We have done this and it has worked really well. But when the applicants don't live in the area, we can't visit.
We require last months rent up front for tenants with no rental history. If they just sold their house, they should be able to afford it. Between that and the security deposit, you have almost enough of a buffer to get through the eviction process without loss of rent. Then, keep a close eye on the place, especially for the first 6 months.
@Naguib K. nearly every county in the country is on a computerized system on property ownership. You might be able to check to see if they actually did own a property and how long they owned it from an internet search of the address of their prior property. Perhaps you are getting bad tenants who do not want to tell you their last landlord and are only claiming they owned their last house? You are probably already doing this but check out their cars when you see them. If they have duct tape over a window or other signs of not caring for it that may be an indicator. It is not always true, my car looks very nice, but my truck looks pretty bad, so take it with a grain of salt.
You say no rental history. What do you call paying the lender each month?
Sorry, what I mean by rental history is only related to the condition of prior rental properties where the prospective applicant lived. Paying the rent or the mortgage payments is another story.
A lot of people say look at what type of car or condition the car is in to determined if they would be a good tenant or not. Never judge a book by its color. When i had a large complex i had a guy show up driving a old Studebaker with no back glass in it and it look like it never been to a car wash. I rented to him and he never miss a rent payment and was a good tenant.
The best you can do is your best effort due diligence.
1. Credit check/criminal history check. We do this using a service for every tenant and provide them a copy. It costs us $50. Make sure there is a non refundable charge for this.
2. Reference letters. Although they can be meaningless, the effort will show you are looking and possibly scare away bad renters. If they provide letters, ask that person for another name and contact of someone not on the list whom can provide info and then call that person yourself.
3. Have a lengthy list of do an don'ts and explain that you run a tight business which is professional and thorough. You mean business! Provide this with your lease. Reading this list, signing off on it if you move forward trains your tenants forward from the start. Have a personal sit down with them and go over it line by line together. Again, set the standard from the start. You are running a business!
4. Meet them in person and make sure your first impression of yourself says "I mean business". Dress professional, be pleasant but in control, you are not buddy buddy, you are the owner of the business. It sets a high standard from the start.
5. Be consistent in this due diligence for all tenants to show your process. Protects you from discrimination issues.
6. Be sure to clearly explain the ramifications of trashing your place up to and including legal action if need be. Then do it if you need be!v No idle threats.
Finding good tenants is always a crap shoot but the land lord can do these things to at least try to weed out the obvious bad ones. The simple process of looking into history, credit, background and references has scared away many bad tenants for me. The just fall out on there own. The process also gets them nervous and talking and then they reveal even more information to me. It my "spidey sense" starts talking to me it us usually because my experience is sensing something. Listen to that and don't cut corners on your processes. It can be hard when you are looking at a lost month rent but the lost rent can often be much better than the mess you create because of the bad tenant. Hope this helps.
@Naguib K. what I have done in your case is to pursue the other references on their application in greater details. If they have pets, I have found their pet references to be more open and candid than previous landlords. I call their employers (direct supervisors) and try and ask open ended questions. If they are short on rental references, I ask the supervisors some housing related questions to try and get them to talk. Most usually will. If I get several tight lipped replies I take that as a sign and move on to other applicants. I might miss some good ones but I know I miss more bad ones with this approach.
I am in no obligation to help people out who are in a tight spot.
All good, common sense points/suggestions. If we cannot verify the condition of their past rental property with the previous landlords, we do check the condition of their vehicle whenever possible (with a grain of salt, of course), we ask for two months rent deposit though some balk at the idea, and try to visit their house if it is in our area. We keep our properties in good repair at all times and we are just trying to weed out tenants we call "destroyers". By the way, the "destroyers" may also destroy their own houses not just the rentals. They may often pay their rent on time religiously but still destroy your property and never mention it. Hidden water leaks are the worst. After the tenants move out, you find small long running water leaks hidden under sinks or at shower doors with resulting expensive water damage repairs. Whereas if the tenants would have mentioned a loose pipe or a bottom shower door seal broken, the repairs or replacement parts are usually just a few dollars rather than 100s or 1000s. We tell all our tenants to always inform us of any needed repairs immediately, we want to attend to any maintenance issues right away. Some do but incredibly many do not.
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