WHY SCREEN TENANTS?

 There are really only a few keys to having successful lease property.  The first rule, of course, is to pay a good price.  The second rule second is keeping it occupied at a good rate, and the third is keeping your expenses down.   

 Pretty basic.

 The reason placing well screened tenants is so important is that it makes or breaks the 2nd and 3rd rule.  If you don't screen tenants, you have a good chance of getting a bad one.  Bad tenants are pros at lying, bold faced and believably.  They've made a habit of doing it, they know what to say and what not too say, and too many landlords allow themselves to be fooled.  Even if you think you're a good people reader, let me tell you- you aren't.  Without a proper background check, you're gambling.  As tempting as it is to rent to the first person that walks up, hopefully this blog will convince you otherwise.

 Bad tenants won't complete their lease.  They may move out or be evicted within a few months, and you will have a number of expenses.  Eviction costs, cleanup costs, make ready costs, leasing fee costs, advertising costs, plus the cost of lost rent from the time the tenant stopped paying, through the eviction process, through the make ready, through the time it takes to show it and find another tenant and rent it again...in the meantime you're still paying taxes, insurance, and maybe a mortgage. 

 Not Good.  This breaks rule #2, because the house is not occupied, and any rent you received goes right back into getting the house ready and rented again.

 Bad tenants won't keep your expenses down.  On the contrary, things that should never break will break, and they will leave your house a wreck.  Some of the worst ones are vengeful.  They will punch holes in the wall, break windows, steal appliances and plumbing, burn carpet, kick down doors, etc. etc. etc.  These aren't even the worst stories.  Out of decency I won't say what some tenants have done, and if you think I'm joking just do a quick google search. 

 Also not good, and breaks rule #3. 

 Good tenants are just the opposite.  They fulfill their lease and sign a new one.  This is great for your returns.  For example, if you pay a 75% leasing fee to obtain a good tenant, and that tenant stays for 3 years (average for C.W. Sparks Management)...what an incredible investment!  That fee is spread out over three years!  If you go with another company that can only produce 1 year leases, you would have paid 225%!  Even more if the tenants leave early!! 

 That leasing fee is more than offset by the income you receive each month that it's rented instead of vacant, plus the money saved on releasing fees, make ready, advertising, etc etc.

 Good tenants don't tear up your house either.  During their stay, they are responsible and caring, keeping your month to month expenses low as well.  On their way out, they clean up and do what they need to receive their deposit back.  This saves you time and money on make ready and new tenant turn-around. 

 We are the best screeners in the business.  We go through multiple screening processes to determine the probability that a tenant will be long term and stable.  The office manager who performs the background checks had FBI aspirations, and takes her job seriously.  Not much gets by her, and it has paid off in dividends for our owners. 

 Now, even though our background checks are extensive, we don't turn down clients for any discrepancies.  Through years of experience we have learned what is mostly acceptable, and what flaws are immediate red flags. 

Just to clarify- we do not turn away tenants for any minor thing.  It's not that our screening process is so much stricter, rather it is much more in depth, and we find things that other companies would not.  If an applicant is not immediately red flagged for a serious flaw, we will discuss their application with you, the owner.  You as the owner have final say in every decision, and we will only offer our recommendation.

It is easy to see how a good tenant is such a powerful component to having a successful rental.  I always say, your tenants will make you or break you.

Austin Sparks

Written 09/30/2009