How to Avoid a Disastrous Tenant
April 1, 2019
Nobody wants to find themselves saddled with a tenant who is rude, messy, and irresponsible. But sometimes in the stressful process of selecting a tenant, it can be difficult to know exactly what signs to watch out for. While every landlord ultimately established his or her own guiding rules when it comes to tenant selection, there are some basic standards that it is wise to abide by under any circumstances. Based on my 15 years of experience, I’ve compiled a list of five red flags to watch out for as you review rental applications. Follow these rules, and you’ll be able to avoid landing the tenant of your nightmares:
Red Flag #1 : A potential tenant is in an extreme hurry.
If you meet with a potential tenant and find them immediately rushing you through the process, your ears should prick up. Asking for an immediate move-in is often an early sign that someone is evading the law, is in the middle of a dispute with their current or former landlord, or is in the midst of a turbulent relationship. (i.e. a spontaneous divorce that might reconcile quickly, at which point your tenant will be leaving just as urgently as they arrived.) Make sure that the applicant respects your process and gives you time to properly screen them. If somebody does seem to be a little too eager to move their dining room table in, be wise and do some digging on their history.
Red Flag #2 : Inconsistent income, or inability to verify income.
A general rule of thumb when it comes to income and rent: Your tenant should have a combined gross monthly income of at least three times the monthly rent, and should have consistent sources of income. If self-employed, a potential tenant should be able to provide two years worth of tax returns to confirm their source of income. Being able to verify income is a basic requirement of responsible adulthood, and any good tenant should be able to do so.
Red Flag #3: Sketchy residential history
When screening a potential tenant, be sure and investigate their renting history. Specifically, you’ll want to review two years of residential history to ensure that they reflect timely payment, sufficient notice of intent to vacate, no complaints regarding noise, disturbances or illegal activities, no unpaid NSF checks, and no damage to unit or failure to leave the property clean and without damage upon the lease termination. Consider their past residential behavior to be a forecast of exactly what kind of tenant they will be. If they do owe any outstanding debts to past landlords or utility companies, ensure that they pay them off before moving in. That way, you both can start out with a clean slate.
Red Flag #4: Recent criminal charges
When screening for a quality tenant, you’ll want to investigate their criminal history. We recommend selecting tenants who have incurred no felony convictions within the past 5 years that involve violence against persons, damage or destruction of property, or manufacturing/distribution of controlled substances. We also recommend selecting tenants with no history of sex crime convictions whatsoever. One other factor to consider is how open and honest your potential tenant is about his or her record. If they are clear and forthcoming about a past, minor criminal infraction from the get-go, that is generally a positive sign. If a potential tenant’s records indicate “adjudication withheld/deferred or “Nolle Prosse,” you may need further documentation to complete your assessment.
Red Flag #5: Spotty credit history
As every responsible adult knows, credit is power. We recommend extensively reviewing any potential tenant’s credit history or civil court records, and ensuring that those records do not contain any slow pays, judgments, eviction filing, collections, liens or bankruptcy within the past 5 years. That said, given the realities of the currently economy, you can expect most applicants to have outstanding student loans, and a fair amount to have experienced mortgage foreclosures. These are so common that they need not be disqualifying factors.
Abiding by these basic guidelines can help you narrow your pool of applicants down to the best possible tenants. By conducting a thorough background check and ensuring that your applicants meet a few basic benchmarks, you should be able to eliminate any potential nightmare tenants and ensure that you rent to somebody who is courteous, responsible and respectful of your property. Good luck!
This was very helpful information. Been leasing my properties for 30 years, and just recently just ran into multiple difficult evictions—dead beat tenants are well schooled in their state rights, and the use of social media scams to raise money.
Oklahoma City Ok