I’ve been a landlord for what seems forever and I’ve been helping other landlords with their problem tenants for almost as long and it’s given me a ton of insight into the problems landlords get themselves into. They range from lack of paperwork to lack of follow up to simply being in over their head. But, one issue seems to stand out far more than anything else.
Deep down, I’m pretty old school, but the reality is life has changed. I really do want to trust people and have them do what they say they’ll do. Unfortunately though, we can’t depend on people as much as we used to and a hand shake isn’t worth what it once was.
Yet many trusting, unsuspecting and typically new landlords don’t quite understand that.
I know, we’ve all heard of that master landlord, the super successful guy who goes by his gut and somehow seems to never have any problem tenants or any issues with his property.
Well, he’s a myth, a facade or perhaps maybe not sharing the entire story.
Because I fit into the master landlord category and I’ve had tons of problems over the years!! And I don’t even just go by my gut, I diligently screen and still have problems, albeit far less than those relying solely on mankind being predominantly good and their gut!
After your first thousand tenants you tend to get a lot of systems in place, you have a much better understanding of who to keep an eye on, who to never let in and who looks like the ideal tenant, but it’s still not enough.
Bad tenants have gotten craftier, conmen have gotten more deceptive and often rules to deal with problem tenants have become convoluted, drawn out and open for endless appeal. All at your expense.
Yes there are skip tracers out there and processes to track down tenants after they left in an effort to secure judgments on them, yet none of these are a guarantee you will ever get paid and often even cost you up front to even try. Ultimately wouldn’t it be far simpler to make sure as few of them as possible ever made it into your property?
That’s why YOU, yes YOU (note I went all caps both times for emphasis just in case you thought I meant other landlords…), need to take control and makes sure you have a repeatable systematic and thorough process to screen tenants.
I’ve been coaching landlords for years now and that involves teaching them about screening, so I’d like to leave you with a couple tips to help you move forward with a screening process that can be a priority.
First, make sure you have an application form.
And on that application form you need to make sure you have spots for current landlord, previous landlord, current employer, previous employer where possible, and a couple emergency contacts.
These are all the people you’ll want to personally talk too so you have a true understanding of who the tenant is.
Second, you’ll want to have the ability to check credit/payment history of your prospective tenant.
Whether it’s through American Apartment Owner’s Associations credit checking service or a third party by checking your prospective tenants credit history you’ll have a clear understanding of their previous history of payments. Make credit checking mandatory, and warn tenants you do this as it may shorten your list of prospects!
Finally, never allow your new tenants in until you’ve been paid in full (and in cash, bank draft or money order) both rent and any security or damage deposits.
This last step will give you a better idea of your tenants financial status. If they can’t scrape enough money to deal with all of this in advance it’s likely they live paycheck to paycheck.
This can be a real danger to you the landlord as one tiny upset in their life, illness or a layoff as an example, can impact you directly.
While this is only a portion of all the steps I actually go through and teach, if you can at least implement this, I can guarantee it will help improve your landlord business going forward!
Do you have any tenant screening stories you’d like to share? Leave a comment and I’d love to hear them. Happy landlording.
Bill Biko – “The Educated Landlord” has been an active landlord for well over a decade and during that time has packed more enough experience in for dozens of regular landlords. From rooming houses, to rent to owns, furnished rentals and“regular”rentals, Bill has had around 1,500 tenants which has made him a master of systems and a master of evictions. To find out more about Bill or to get access to additional tips, articles and Bill’s “7 Questions Landlords Must Ask” visit www.TheEducatedLandlord.com