Good renters are a myth as elusive as Bigfoot, himself.
You might be thinking, "My current tenant pays his rent on time.
He never complains.
I never have to fix anything, and the neighbors love him!" Imagine your surprise when he skips out, leaving rent unpaid, the carpet tore up by the neighbor's dogs that he has been babysitting, and your brand new, broken refrigerator.
There is mold growing on the drywall around the a/c closet from a leak that he never reported.
And, all you have is the measly 1-month's rent security deposit that doesn't even cover the rent loss.
You've just been duped by the classic John Q.
Renter.
He was nice.
He even had a letter of reference from his previous landlord.
He needed a place fast, because the house he was renting went into foreclosure, and his grand-mother just moved into the retirement home right down the street, and blah, blah, blah...
DUPED.
The worst part is you probably could have avoided all of this heartache by performing a more thorough rental history.
Don't think that a good rental history is only obtainable my a professional property manager with expensive tools.
The experts in the field use some very basic techniques to suss out the undesirable renter.
Beware of the Fake Landlord If a renter is eager to provide you with a letter of reference from their previous landlord, don't bother with it.
You will want to find out about this person from the landlord, first hand.
Obtain the landlord's contact information, and contact them yourself.
When you do, you may find yourself talking to a fake landlord.
This could be your renter's best friend or even a paid service! However, you can use some basic sleuth skills and searching techniques to bring this false reference out into the light almost immediately.
Here are just a few tools at your disposal:
It is your job to find out if they are hiding something.
The best way to do this is by pulling a credit report.
I recommend using one of the myriad of online services that provide tenant screening for obtaining the credit report.
Experian provides a tenant screening service for as low as $6.
95 per transaction.
Talk about Return On Investment! When pulling a credit report, you should always obtain permission, and always comply with the Fair Credit Reporting Act.
A simple release statement above the signature is usually available on most downloadable applications.
A credit report will not only give you insight into the applicant's credit history, but you get the added benefit of seeing all addresses associated with their name.
Ask them about these addresses, if they differ from the information they originally provided.
Perhaps they had 3 childhood homes, but perhaps they have a rental history they are not telling you about.
Fair Housing Laws Remember that the Federal Fair Housing Law dictates that you cannot refuse housing based on factors of race, color, religion, handicap, familial status, or national origin.
There are often other categories that your state, county, and city Fair Housing Laws may protect.
It is important that you do this research and comply to avoid serious fines and possible jail time.
To avoid accidental discrimination, you should always set parameters for acceptance.
Maybe you are OK with a couple of late payments in their rental history, or you don't want any at all.
Whatever you decide, just make sure that you apply them to each applicant the same.
There are many more factors involved in screening a renter to best protect your investments.
Rental history, alone, will not tell you enough about your applicant to ensure your assets, but it is a very important place to start.
You might be thinking, "My current tenant pays his rent on time.
He never complains.
I never have to fix anything, and the neighbors love him!" Imagine your surprise when he skips out, leaving rent unpaid, the carpet tore up by the neighbor's dogs that he has been babysitting, and your brand new, broken refrigerator.
There is mold growing on the drywall around the a/c closet from a leak that he never reported.
And, all you have is the measly 1-month's rent security deposit that doesn't even cover the rent loss.
You've just been duped by the classic John Q.
Renter.
He was nice.
He even had a letter of reference from his previous landlord.
He needed a place fast, because the house he was renting went into foreclosure, and his grand-mother just moved into the retirement home right down the street, and blah, blah, blah...
DUPED.
The worst part is you probably could have avoided all of this heartache by performing a more thorough rental history.
Don't think that a good rental history is only obtainable my a professional property manager with expensive tools.
The experts in the field use some very basic techniques to suss out the undesirable renter.
Beware of the Fake Landlord If a renter is eager to provide you with a letter of reference from their previous landlord, don't bother with it.
You will want to find out about this person from the landlord, first hand.
Obtain the landlord's contact information, and contact them yourself.
When you do, you may find yourself talking to a fake landlord.
This could be your renter's best friend or even a paid service! However, you can use some basic sleuth skills and searching techniques to bring this false reference out into the light almost immediately.
Here are just a few tools at your disposal:
- Your county property appraiser website.
Many property appraisers have an online tool that allows you to search an address to find the owner's name.
It will even list if the house is homestead (meaning it's a primary residence and most likely not being rented).
If the owner's name is different than the name provided by your applicant, it's possible that your renter has just handed you a fake reference.
Of course, keep in mind that if the rental dates were more than a year ago, the owner of the property may have changed. - Social networking sites.
You can look up the phone number or email provided on Facebook or LinkedIn.
It is very likely that you will be able to find a face to put with the name that your potential renter has given you.
If your renter's face frequently appears on this supposed landlord's Facebook, it's likely a scam.
Of course, they could have been renting from their best friend.
But, that almost guarantees that you won't get the down and dirty about your tenant's renting habits. - Your county's Clerk of the Court website.
I can't stress enough how invaluable of a tool the County Clerk's website is, if it is available to you.
You can search public records on your tenant and the previous landlord.
Landlord/tenant civil court actions will be readily available to view, as well as any other indiscretions that you may want to consider when choosing a renter.
It is your job to find out if they are hiding something.
The best way to do this is by pulling a credit report.
I recommend using one of the myriad of online services that provide tenant screening for obtaining the credit report.
Experian provides a tenant screening service for as low as $6.
95 per transaction.
Talk about Return On Investment! When pulling a credit report, you should always obtain permission, and always comply with the Fair Credit Reporting Act.
A simple release statement above the signature is usually available on most downloadable applications.
A credit report will not only give you insight into the applicant's credit history, but you get the added benefit of seeing all addresses associated with their name.
Ask them about these addresses, if they differ from the information they originally provided.
Perhaps they had 3 childhood homes, but perhaps they have a rental history they are not telling you about.
Fair Housing Laws Remember that the Federal Fair Housing Law dictates that you cannot refuse housing based on factors of race, color, religion, handicap, familial status, or national origin.
There are often other categories that your state, county, and city Fair Housing Laws may protect.
It is important that you do this research and comply to avoid serious fines and possible jail time.
To avoid accidental discrimination, you should always set parameters for acceptance.
Maybe you are OK with a couple of late payments in their rental history, or you don't want any at all.
Whatever you decide, just make sure that you apply them to each applicant the same.
There are many more factors involved in screening a renter to best protect your investments.
Rental history, alone, will not tell you enough about your applicant to ensure your assets, but it is a very important place to start.
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