Welcome to the AAOA Forum, where we discuss the the topics our members want to hear and want to talk about. We like to take an active roll in the online community to help our members learn and help educate landlords new and old. We encourage you to participate and join in our discussions. Thanks.
Tenant Turnover Doesn’t Add Up
Rent it Right
by Janet Portman, Inman News
Q: We hired a management company to find tenants and collect rent at our rental in a nearby town.
Over the past two years we’ve had four sets of tenants; one broke the lease and we had to file evictions on two of
them. The property is nice though the market is cool now.
We’re tired of the fast turnover — are we or the management company doing anything wrong? –Jose M.
A: It sounds like the company is filling your property too quickly, perhaps without taking the time to properly screen applicants. A management company will be tempted to find tenants fast because it gets a cut of every monthly rent check: The sooner it’s rented, the sooner the checks come rolling in.
In addition, the company gets a fee every time it has to show and rent the property. It doesn’t take a genius to see that frequent turnovers and minimal vacant months are in the management company’s best interests. If an eviction is necessary, you’ll pay the company extra to handle it (of course, you’ll pay a lawyer, too, but the management company won’t usually have any legal expenses).
Balance those interests against yours. You want minimal turnover and you want stable tenants whom you won’t have to evict. Those needs translate into patient, thorough tenant screening and the willingness to go without a tenant for a month or two or three until the right prospect comes along.
True, you’ll be losing rent, but that lost rent will pale when compared to another round of turnover costs a few months down the line, let alone the cost of an eviction. But your management company has no incentive to wait it out — instead, they’ll be anxious to place a tenant and begin taking a cut of your rent.
Truly professional companies recognize that the temptation to quickly rent a place with minimal screening is not ethical. Practically speaking, too, such practices will not enhance their reputation. In the long run, they’ll become known as outfits that don’t deliver quality tenants for their owners. Maybe it’s time that you switched management companies.
Talk to other landlords and find out who has had a good experience. The number of evictions they’ve had to file and whether they’ve had hassle-free tenants will tell the whole story.
Janet Portman is an attorney and managing editor at Nolo. She specializes in landlord/tenant law and is co-author of “Every Landlord’s Legal Guide” and “Every Tenant’s Legal Guide.” She can be reached at janet@inman.com.
Copyright 2009 Janet Portman
To subscribe to our blog, click here.
Posted by Kim Ezzell on 10.05.2009. 4 Comments »
Filed under: AAOA Forum, Credit Screening
Landlord Quick Tip
Having a script can help you get the information you need. American Apartment Owners Association offers discounts for landlords on products and services related to your rental investment, including real estate forms, tenant debt collection, tenant background checks, insurance and financing. Find out more at www.joinaaoa.org.
To subscribe to our blog, click here.
Posted by Kim Ezzell on 10.05.2009. 4 Comments »
Filed under: AAOA Forum, Credit Screening
Landlord Quick Tip
Tenant screening is like navigating through icebergs. Sometimes you see just the tip, but the real danger is underneath.Do you have a tip to share with other landlords? Contact our editor at kim@joinaaoa.org.
American Apartment Owners Association offers discounts for landlords on products and services related to your rental investment, including real estate forms, tenant debt collection, tenant background checks, insurance and financing. Find out more at www.joinaaoa.org.
To subscribe to our blog, click here.
Posted by Kim Ezzell on 09.21.2009. 1 Comment »
Filed under: AAOA Forum, Credit Screening
Don’t Botch Your Criminal Background Checks
Given the rising crime in our urban areas, property owners must be concerned with introducing a dangerous or undesirable tenant into their building. Nearly all criminal records are public. Generally, the easiest access to criminal records is through your tenant screening provider. When ordering your screening report, most companies offer an option of a criminal background check. The response varies from immediate (online) up to a couple of days depending upon the county or state you are pulling records from.
Before ordering a criminal background report on a prospective tenant, it is important that you have sufficiently cross-checked the application. Once you are satisfied that the address history is accurate, you can then request the criminal background from a specific county or state.
To subscribe to our blog, click here.
Posted by Kim Ezzell on 09.21.2009. 4 Comments »
Filed under: AAOA Forum, Credit Screening
You May be Desperate, But Don`t Let `Cash in Hand` Distract You
I got a call on one of my vacant, available rentals today. The caller drove by the property, saw the sign, and called. They wanted to see it “right now”.
I told them I couldn’t get over there to show it until 4pm, as I have other engagements until then. They said, “Well, we’re headed back to South Carolina to take care of some business so that wouldn’t work.” I apologized, and encouraged them to take a look around the outside and peek in the windows.A few minutes later, the caller’s wife called and said they like it, and asked what they need to do to rent the property.
Posted by Kim Ezzell on 08.10.2009. CLICK to Leave a Comment »
Filed under: AAOA Forum, Credit Screening
Landlord Quick Tip
-
Joint check before, now a single name
-
A single name before, now joint
-
A different person altogether
-
A business
These are all signs of a change, from divorce, to a new occupant in the unit, to new job status.Check the phone number and add it to the file if it’s new.
American Apartment Owners Association offers discounts on products and services for landlords related to your real estate investment including REAL ESTATE FORMS, tenant debt collection, tenant background checks, insurance and financing. Find out more at joinaaoa.
To subscribe to our blog, click here.
Posted by Kim Ezzell on 07.13.2009. 1 Comment »
Filed under: AAOA Forum, Credit Screening
Your Biggest Tenant Screening Mistake
You hear the stories from other landlords. “My tenant skipped out.” “My tenant destroyed the property!”
Due diligence is the single most important factor to tenant screening in today’s market. A problem tenant costs more than a vacancy. Be prepared to do some work when it comes to verifying the application. American Apartment Owners Association offers discounts on products and services for landlords related to your real estate investment including REAL ESTATE FORMS, tenant debt collection, tenant background checks, insurance and financing. Find out more at joinaaoa.
To subscribe to our blog, click here.
Posted by Kim Ezzell on 07.13.2009. 4 Comments »
Filed under: AAOA Forum, Credit Screening
Landlord Quick Tip
Not all the information you need to evaluate a tenant will come from screening reports. Hints about their intentions will come from your face-to-face interview. American Apartment Owners Association offers discounts on products and services for landlords related to your real estate investment including REAL ESTATE FORMS, tenant debt collection, tenant background checks, insurance and financing. Find out more at joinaaoa.
To subscribe to our blog, click here.
Posted by Kim Ezzell on 07.06.2009. 1 Comment »
Filed under: AAOA Forum, Credit Screening
The (Hidden) Advantage of Application Fees
by Robert Cain
Application fees have the additional advantage of being “self-weeding” of bad tenants.
Tenants who know they will be rejected usually won’t apply to rent from you if they know they will lose their application fee.
If all the risk is on you, many times they will just go ahead and fill out a rental application, replete with lies, half-truths, and omissions. But if they have to risk their own money, they may just go on to the next landlord—the one who won’t be so careful whom he rents to.If you do collect an application fee you are either legally or ethically (depending on whether your state has passed a law about it yet) required to do the following:
a. Tell them what you are going to check.
b. Inform them of their rights to dispute any information you uncover. (You don’t have to wait for the disputed information to be resolved, you can go ahead and rent to someone with no black marks on his or her credit report.)
c. Tell them the name of the screening service or credit reporting agency.
d. Even if you don’t charge an application fee, but you reject them as tenants because of information you received from a credit agency or tenant screening service, tell the applicant that you rejected him or her because of the information you received, and give him or her the name and address of the service or agency.
e. You need not tell applicants the specific results of the credit report or screening report, only that it caused you to reject them. They need to contact the agency for the specifics. You can, however, give them a copy of their “consumer report,” as defined in the Fair Credit Reporting Act.
f. Do not charge a fee unless you actually have a unit available to rent at that moment or expect one within a reasonable length of time.
g. If you charge an application fee, but never screen the applicant, give the money back “within a reasonable time.”
Write all this out as an agreement and receipt that they and you will sign when they pay you the application fee.
Copyright Cain Publications, Inc., used by permission.
Robert Cain is a nationally-recognized speaker and writer on property management and real estate issues. For a free sample copy of the Rental Property Reporter call 800-654-5456 or visit their web site at www.rentalprop.com.
Share your insights by commenting below. For questions about our blog, contact our editor at kim@joinaaoa.org.
See our feature, Is Your Rental Application Falling Short?
American Apartment Owners Association offers discounts for landlords on products and services related to your rental investment, including real estate forms, tenant debt collection, tenant background checks, insurance and financing. Find out more at www.joinaaoa.org.To subscribe to our blog, click here.
Posted by Kim Ezzell on 06.10.2009. 5 Comments »
Filed under: AAOA Forum, Credit Screening
5 Tenant Screening Tips for Today`s Economy
Tenant screening is more difficult in this bad economy.
For one thing, there are fewer applicants and that forces a landlord to choose between more mediocre prospects.
But these times are also hard on landlords who rely too heavily on credit reports to make screening decisions. More applicants than ever have a foreclosure or a bankruptcy on their credit record, and landlords have to decide whether to overlook it.
Applicants with long-term job histories suddenly have been forced to change careers, and others are moving around to new cities to search out job opportunities.
While credit is an important factor in tenant screening, it is not the only thing to consider when evaluating a prospective tenant:
Talk to The Previous Landlord – Oops, There Isn’t One!
Posted by Kim Ezzell on 04.02.2009. 5 Comments »
Filed under: AAOA Forum, Credit Screening


