No landlord wants to have problems with their tenants. The process of finding good tenants begins when you are interviewing prospective tenants. There are certain statements and behaviors that you should be aware of and investigate further. Here are five signs to watch out for.
- They Seem Nervous About a Credit Check: A tenant who seems hesitant about agreeing to a credit check may have something to hide. They could be afraid you will find something negative in their credit report such as a poor credit score, a large amount of debt, a prior bankruptcy or even a history of evictions.
You are not legally allowed to run a credit check unless the applicant agrees to it in writing. You should, therefore, let the tenant know that if they do not allow you to run a credit check on them, you will have to remove them from the potential tenant list for your property.
- They Have Poor Credit/Bankruptcy: Even if a prospective tenant consents to a credit check, it does not mean you are going to like what you find. If a tenant has had trouble paying their bills in the past, their credit score will reflect this. There is a strong chance that a tenant who has had trouble fulfilling their previous financial obligations will have similar difficulties in making their monthly rental payment in the future.
A tenant who was not able to rectify their financial problems may have gone as far as declaring bankruptcy. If the bankruptcy filing was recent, the tenant’s finances are likely still in shambles. You may be more lenient if the filing was 10 years ago, because the tenant has had enough time to get back on their feet, although it still shows that they have the potential to make poor financial choices.
- They Have a History of Evictions: If you have discovered that a prospective tenant has a history of evictions, either by running a credit check or by speaking with a former landlord, you should run the other way. Evictions can be filed for a variety of reasons, but the most common reason is for nonpayment of rent.
You want to avoid renting to tenants with previous evictions. These tenants were usually given the opportunity to move out prior to being evicted. Instead, these tenants knowingly violating the terms of their lease agreement but refused to leave until they were legally forced out.
- They Have a Criminal History: Many states allow you to deny a prospect based on criminal history, but some states, such as California, do not allow you to discriminate against people who have been convicted of certain nonviolent crimes. For example, as a landlord, you could make a strong case to refuse to rent to someone who has been convicted of dealing drugs or is a registered sex offender because it could put your other tenants in jeopardy. You may have a harder time refusing to rent to someone who went to jail for unpaid parking tickets.
- They Lied on Their Application: This is where the importance of a thorough tenant screening process comes in. If you simply take a tenant’s word and don’t double check their application because everything looks good on paper, you could be setting yourself up for disaster. You will never know if the tenant is being truthful if you do not follow through.
You should verify everything on their application. Check with previous work references and landlords. Verify previous addresses. Verify their income by collecting their W2 form and also by submitting an Employment Verification Request to their supposed employer to confirm they do indeed work there and their pay rate. An applicant could say they make $2000 a month, but without verifying this income, they could actually make nothing for all you know.
People do make mistakes, so writing down the wrong street number, but the correct street name and town, may have been an honest mistake. However, a blatant lie on an application, such as lying about their place of employment, should be a red flag that it is time to move on to the next applicant.