We’ve all heard about the “tenant from hell.”
You know, the one that will take advantage of you and live for free in your rental property for the next year?
Unfortunately, tenant-friendly states like Massachusetts, California, New York, and others, just make it harder for us to run a good business. They make the situation worse for us and for prospective tenants!
So, the key is to try to avoid the bad ones in the first place!
The single most important thing a landlord can do to avoid bad tenants is to screen them. In fact, MOST landlords have little to no screening process, which is why you should implement a formal screening process and application with an application fee. The application fee should cover the cost of doing a background check, credit check, and eviction records check.
Start by downloading a free tenant application form (and you’ll find a ton of other free forms as well) You should include these questions in addition to anything else you may find necessary to screen for bad tenants.
Then, follow these:
10 tips to avoiding bad tenants
- Get Social Security Numbers and an ID
- Do a tenant credit check
- Check the tenant’s background
- Get contact information for previous 2 or 3 landlords
- Verify specifics about the Tenant’s job and income
- Ask if they’ve ever been evicted or sued
- Have a written lease or tenancy agreement
- Follow the law and be a professional landlord
- Do not hesitate to deliver a Notice to Quit
- Require renters insurance
Get Social Security Numbers and an ID
How do you know this person is who they say they are? People with multiple evictions and unpaid bills will often use a friend, family, or coworker and apply under their name. So, get an ID and make sure they are who they say they are before spending any money on credit checks.
Additionally, their ssn is required to do most of their credit/background checks and it will be very useful if you ever need to send their debts to a collection agency or court.
Do a tenant credit check
You should ensure that the tenant’s debts are not too high. Typically, a tenant should not have debts more than 1/3 of their income to be a financially stable long-term renter.
Check the tenant’s background
Do you want to know how to avoid bad tenants? Simple. Do a background check. Also, search on Google for anything that may have happened but wouldn’t show up in a typical background check.
You don’t want to live next to a felon and neither do your other tenants. Check to make sure the application has a good background with no serious criminal behavior.
Get contact information for previous 2 or 3 landlords
The most recent landlord’s information is useless because the landlord will say anything to get them out if they’re bad
I love it when I receive calls from landlords screening someone I had as a tenant. I also love it when they didn’t pay or caused a lot of damage! So, make sure you are asking for at least 2 landlord’s information and more if they have it.
A little trick I use is to verify and make sure these people are actually their previous landlords. Start by checking the city records to determine who owns the building then try to find their contact information from some source other than the tenant. That way you know they didn’t provide a friend’s number who will just act as the landlord.
I personally have seen rental applicants invent addresses or give names and numbers to friends. I always check public records to see if the owner is the same as the name/number provided. If they list an apartment complex with an on-site manager, I search the leasing office number online instead of using the one provided.
Verify specifics about the tenant’s job and income
Always verify income and never accept under-the-table income toward their numbers.
Any document can be forged. Research the company they work for and contact them directly to ask about employment. Do not use the phone number listed in the application. If a bad tenant would lie about their income, they will probably put a friend or family member’s number there to lie for them as well.
Ask if they’ve ever been evicted or sued
If you want to be a great landlord, you need to always cover yourself. These days, it seems like everyone sues over the smallest thing. Especially with housing, make sure you reject applications for very specific reasons. The best way is to catch them lying to you on the application.
Most bad tenants don’t realize how easy it is to actually check their eviction history and court records especially since you have a copy of their ID, SSN, and previous addresses.
On multiple occasions, a prospective tenant has said “NO” when asked if they have ever been evicted just to find multiple evictions including one pending! Lying on an application immediately disqualifies an applicant and so does a recent eviction.
Have a written lease or tenancy agreement
A lot of problems can be resolved easily if the agreement is written instead of a verbal one. This is especially important if you do end up in court.
The agreement is mutually beneficial as it lays out all requirements from both parties and reduces conflicts. But, since you write the lease, make sure it is full of language that protects you.
Follow the law and be a professional landlord
It is very easy to get emotionally involved when your money is being wasted. It’s imperative that you know how to manage your relationship with a tenant – you are a business person and should always act like it.
The fact is that many bad tenants will goad you into doing something just to use it against you in court.
Avoid the emotions. Don’t act on a whim. And make sure you follow all applicable laws.
Do not hesitate to deliver a Notice to Quit
A notice to quit is not an eviction (it may be called something else in other states). It simply tells a bad tenant to fix their mistake or they may be evicted. Explain to the tenant that it is just a formal step you must take and if they pay it will have no effect on them.
If they fail to pay this will save you valuable time.
These steps will help you avoid evictions. Should you end up in court, it should help you get through much faster.
Require renters insurance
It’s important to have rules and policies in place. You should tell prospective tenants about some of them and judge their reaction. A great example is requiring tenants to have renters insurance. Tenant’s that have no intention of paying you are very unlikely to want to protect their belongings with insurance.
Avoiding bad tenants is done in the beginning
The only way to avoid a bad tenant applicant is to screen properly and reject them! These steps simply won’t help you once you’ve already put a tenant in place.