Adventures in Property Management

The four warning signs of a problem tenant

Josh Jamias - Tuesday, November 20, 2018
Property Management Blog

It’s true. You don’t have to be an interrogator for the FBI to vet or assess rental applicants. When you haven’t taken time to pick the best tenants, you increase your risk of different problems such as property damage and late rent payments. Tenants who cause problems are stressful and make life more difficult for you.

Blog Image 1

Here are four warning signs you should know to avoid having problem renters living in your property.

The applicant can’t verify income

Proof of income is key to ensuring that rent can be paid. If rent isn’t paid, then you’re not able to pay the mortgage for the property which is never good. Income can be verified with the following documents:

  • Tax returns
  • Pay stubs
  • Bank statements
  • Letter from employer
  • Social security benefits
  • Profit and loss statement
  • Court ordered agreement

The process of getting documents can be time-consuming but it’s worth the effort. Always take the time to review financial documents the applicant has shared with you. You can save yourself from having to pay your own mortgage by having a tenant who can always pay rent.

The applicant can’t provide any references

If the person who wants to rent from you can’t get give the names and contact information of anyone who can put in a good word for them, it’s not a good sign. Great references from different people such as employers, previous co-workers, and previous landlords help you understand the character and history of the person who wants to rent from you. While you are legally limited as to the questions you can ask, there are questions you can ask that you can ask. Here are a few questions that help you gain the insight you need:

  • How do you know this individual? When did you first meet?
  • Would you hire this person again?
  • Would you rent to this person again?
  • Did the individual pay rent on time?

Keep the protected classes of the Fair Housing Act  in mind when engaging with references. It often is the answering that leads to problems.

Blog Image 2

Here’s an example of a good way to answer questions if you’re the former landlord listed:

Q: Were there any complaints?

A: Yes, there were complaints regarding noise. I have served written warnings.

If there were negative experiences with the previous tenant then give specific, documented examples.

Feel free to pass on any applications that don’t have references listed. You’ll protect yourself and your investment by avoiding people with a bad history.

The applicant has poor or bad credit

Credit reports tend to be more difficult to falsify than income reports. When an applicant demonstrates an interest in renting from you, you should check the applicant’s standard credit reports and credit ratings. Credit checks factor in different things such as payment history, debt amount, account mix, new credit accounts, and credit history age.

If you still want the applicant to rent from you despite having bad credit but want to protect yourself, there are a few things you might want to do. Some of the things you may want to consider include increasing the security deposit required and shortening the term of the lease. The best decision, in the end, may just be choosing an applicant who has verifiable income, positive references, and a good credit score.

The applicant is argumentative or confrontational

This is an obvious red flag. Are you getting haggled about the rent price in the first meeting? Is the applicant rude or in your face as you are showing the property? Save yourself from a lot of headaches and stress by not allowing this type of applicant. Chances are you don’t enjoy the company of people who argue for no reason and love getting in your face so you must keep that in mind when it comes to your rental property. Avoid allowing this type of tenant to rent from you to stay sane and happy.