You May be Desperate, But Don`t Let `Cash in Hand` Distract You

by Eric Boyd
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.Cash in hand I told them I couldnt get over there to show it until 4pm, as I have other engagements until then. They said, Well, were headed back to South Carolina to take care of some business so that wouldnt work. I apologized, and encouraged them to take a look around the outside and peek in the windows.

A few minutes later, the callers wife called and said they like it, and asked what they need to do to rent the property.

I said that I could give them an application for them to complete. Then, I would conduct credit and background checks, and employment and rental verification.

She quipped that they didnt have a previous landlord, since they own their house in SC. She then said, they were trying to get this done today, so they can go back to SC. They wanted to get this done before school starts, so they can get their kids registered. She said, We have cash in hand, and are ready to get this done

I politely responded to her, and let her know that we dont rush our tenant screening process. I stated that it is our duty to the property owner to ensure that tenants are properly screened, with thorough credit and background checks, and employment and income verifications. I shared that it has been our experience that taking shortcuts in the screening process leads to problems with tenancy, down the road. So, we avoid those shortcuts, at every opportunity. She thanked me, and we ended the call.

In todays housing market, there seems to be surplus of rental property. Because of this, it is taking much longer to get property rented. And, if youre properly screening your tenants, it could take even longer to get it rented. So, desperation may set in. If you feel like youre getting desperate, dont let Cash in hand distract you from doing your due diligence. If you do take this shortcut, the upfront money you get, could cost you double or triple that amount down the road. This cost could come in the way of lost rent, or even worse, damages to your property.

The caller said they own a house in South Carolina, but theyre trying to rent here in Jacksonville, Florida, 4-5 hours away. If they have a house in SC, why are they moving here, and what are they going to do with the house in SC? If I didnt screen them, I wouldnt find out if they have a mortgage on that house, which probably requires monthly payments. Sure, they may have the means to cover a mortgage payment and a rent payment somewhere else. But, if I didnt screen them, then how will I be able to determine their income? How will I know if theyre 6 months behind on their mortgage? How will I know if they just filed bankruptcy? How will I know if theyre bouncing $30 checks at the grocery store? If I dont screen them, I wont know these things.

Im generally trusting of people. But, having been through the tenant screening process many times, I realize that people DO TELL LIES. Fortunately, we landlords and property managers dont have to fall victim to these lies. Professional property managers have access to tenant screening services, which reveal the truth about tenant applicants credit history, debt status, and civil/criminal judgments. Property managers can also verify applicants employment and rental history. This information, combined with careful analysis of the provided data can help to place the best possible tenant in your rental property.

In summary, dont succumb to desperation. Dont allow a tenant prospect to force you to alter your normal screening processes. Dont let the chance at cash in hand to steer you from your due diligence. SCREEN THOSE TENANTS!!

Eric M. Boyd, Property Manager, Realtor, e-PRO is with Step One Realty, LLC in Jacksonville, FL

See our feature, Your Biggest Tenant Screening Mistake.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.

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