Regardless of how great your property is or how experienced you are as a landlord, having a bad tenant can be the death of your profitability. Not just a monetary hindrance, a bad tenant can ruin your experience as a landlord and cause more stress.
While finding the right tenant can seem daunting, there are steps you can take to ensure you catch any red flags before signing that lease. It is important to fully screening any potential tenant through the use of a background check, credit, and reference check. These methods can become expensive if used frequently. Ask these five questions prior to letting them submit a leasing application:
The first question that should always be asked of any prospective tenant before you agree to show the home is, why are they moving and in what time frame are they looking to move. This question is vital, as you can get a lot of information about the tenant just from their answer. There are legitimate reasons for moving, such as job change, needing more space, or wanting an amenity that isn’t offered by their current location (such as changing school zones, being closer to shopping, etc.). If their reason is a little rougher, such as being evicted, not getting along with their landlord or neighbor, you may want to be a little more cautious in proceeding. When they are moving is also important—if you’re looking to fill your vacancy immediately but they’re not ready for another 90 days, it may not be a good fit. Also, if they’ve waited until the last minute, you might want to find out why they are in such a hurry.
You’ll want to verify how much their monthly income is versus how much your rental payment is before going too far into the process. If their monthly income is $1200 and your rental payment is $950, you know that they are not qualified. Another good money-related question to ask is whether they will be able to pay the first and security (or whatever amount you ask for up front) on the day of lease signing. If they ask to make installments on this lump sum, chances are you’re not going to be able to easily secure your monthly rental payments.
When looking at perspective tenants, it is important to ask whether they can furnish references from both personal acquaintances, former landlords, and former or current employers. A solid candidate will be able to provide these without any hesitation (they may request a few days to organize written references, but otherwise should easily commit). If a candidate hesitates or makes excuses as to why they are unable to provide these, you may want to consider that a red flag and move on.
This is a good question to ask long before spending any time showing the home. A rule of thumb is to have only two people per bedroom, however, keep in mind that each county has their own occupancy guidelines. Also, the more people you have in the home, the more wear and tear the property will face on a daily basis. Also, this is a good time to discuss any potential pets.
A solid candidate will want to know the rules ahead of time. Even if you’re satisfied with the responses they have provided to you, the candidate also has to be satisfied with your responses and property rules. A candidate that doesn’t have any questions is a red flag, as you want a candidate who is informed and engaged.
The best time to ask these screening questions is when the candidate contacts you to schedule a showing. If you catch any red flags, or if they have pets you don’t allow, or something else that conflicts with your leasing agreement, then consider that as a red flag.