The Tables Have Turned: Your Tenants May be Screening You!
You’ve probably been doing tenant screening on new applicants for years but never heard of a tenant doing a landlord screening. With foreclosure numbers continuing to hit record spikes, the real estate industry is in flux. Just under twenty percent of foreclosures are rentals. In some areas, that number may be double. Most often, a foreclosure trumps a lease, although some states have stricter requirements on such evictions. Lenders are often not in the landlord business. When the home forecloses, the tenant is cast out so the property can be sold or auctioned vacant. In worse cases, the tenant may have only three days notice to vacate, or suddenly find their power turned off.
This phenomenon has morphed into a crisis, with many states taking action to slow the eviction process for the tenants to give them time to find a new home. Congress has recently attempted to require a 90-day notice period for tenants at risk of evictions because of their landlord’s foreclosure.
Don’t be Surprised If You Are The One Being Screened
News stories are popping up everywhere, from coast to coast, with the same scary scenario for renters: being evicted even though they are current on their rent. It is often difficult to get hold of their security deposit in time to apply it to the next rental. As a result, tenants who want to avoid being burned are getting more savvy when they shop for a new home.
Don’t be surprised if you are asked some credit questions yourself: Are you current on the mortgage? How many single-family rentals do you own? Why are you discounting the rent? Are you planning to sell? Tenants may look to public records to collaborate your story.
The Up Side
There is a good side to this new-found scrutiny. Wary tenants are tenants who plan to stay. All they need is your reassurance that the rental relationship won’t turn in to their worst nightmare.
American Apartment Owners Association offers discounts on products and services related to your commercial housing investment including REAL ESTATE FORMS, tenant debt collection, tenant background checks, insurance and financing. Find out more at www.joinaaoa.org.
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