The wrong tenant can not only be stressful situation, but can be costly as well. So how can you avoid these 'terrible tenants'?
While no one has a crystal ball that is 100% accurate there are definitely steps that can be taken to hopefully avoid these situations.
Most people see this as checking their credit & criminal history. While those are definitely 2 extremely important steps, you should also check:
- Rental history- talk not only with their current landlord, but the one prior to that as well.
- Employment- Do they have a steady source of income, or does it tend to bounce around and be sporadic. Every situation is different, but you don't want your rent payments to be few and far between, of have to deal with a constant flow of late payments and excuses.
Cash Up Front:
They seem nice up front, but it doesn't always end well. Be a little weary of someone who only wants to pay with cash and usually for long periods at a time up front. While it does seem nice to get everything from the get go, it raises some red flags down the line.
- Are they paying for 6 months at a time to keep you from coming by the property?
- Sometimes it is a diversion from their previous history. While paying the rent first sounds nice, it can end badly if not worded correctly. Rent can only be used for rent, so if a tenant destroys the property, and an owner thinks they are in the clear to take it from the money they already have, they could be in a sticky situation. A great way to avoid this would be to have a higher deposit up front, not necessarily rents, that can be used for damages as well as lost rent if needed.
It sounds weird to say to 'interview' prospective tenants, but it can be a great tool in avoiding a bad situation. You do want to avoid any issues with fair housing so steer clear of personal opinions. But when you meet with someone about a rental property and what they say directly conflicts with their application, it could require further investigation. A few items that could raise some concerns are:
- Do they happen to have someone that will be living there that they DON'T want listed on the lease? Why is that?
- Are they adamant that they DON'T want you to run their credit, call their employer, etc?
- Do they start out immediately with an excessive amount of excuses as to why they were bad tenants in the past? An explanation is different than every excuse in the book.
- Do they insist on paying a deposit AFTER they move in? Remember this is the security for the property. If they can't afford it now, can they really afford it after the fact?