As landlords we know that one of the most critical jobs we have is screening and selecting tenants. We know that if we get this part correct that our relationship with our selected tenants will be a profitable one.
So, imagine that you have done your tenant screening job well. You collected references (landlords and employers) and checked them out. You inspected their current residence. You performed background checks. Everything checked out. You selected the tenants, and then within the first 45 days things started to fall apart.
What went wrong?
In case you were wondering, this is a real life experience and there are several lessons to be learned, but first lets hear “the rest of the story”.
It turns out these tenants had just been fired from their jobs prior to their completing an application and to make things worse their employer was their landlord. Can you see how this would present a challenge to any landlord.
One of the interesting things about this situation is that the landlord, once the tenant started to falter, decided to check out their Facebook page, which was public. It turns out that the tenants had both posted 2 days prior to completing their application that they had been FIRED from their jobs. It’s great that the landlord finally discovered the truth, but the most important question is how could they have avoided this situation in the first place.
Lessons Learned and Steps to Protect Your Business
1. You have to accept in today’s market that there will always be more to the story presented on the application. Ask questions — lots of questions! Don’t be afraid to pull each thread to ensure you have the best information available prior to making your selection decision.
2. While I do not know how the current landlord and employer information checks were performed the most effective method to get references is to do it via written documents. And by documents, I don’t mean letting the references send you something they prepared. You should have your own documentation that asks specific questions — you can figure out the questions to support your business model. Also, don’t forget to get signatures, titles, printed names for the person providing the info.
3. If you think tenants will allow it, require them to allow you to view their Facebook page. I know this might be asking for a lot, but why not! At a minimum, you should do a Facebook search to determine if the tenants’ Facebook page is not secure. If that is the case anyone, including you can view their page.
I am sure there are other lessons that could be pulled from this true-life scenario that each landlord should know about. Please be sure to share your lessons here.
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