When searching for your next tenant, our biggest advice is to screen them properly. You might just meet someone and get along so well that you think you’ve found the perfect fit. Trust your gut, but trust and verify. Do your due diligence, and watch for the warning signs that point you shouldn’t rent to a tenant.
Just like for an interview, prospects are aware they need to leave a good impression, and some may be able to hide their flaws pretty well. However, our advice is to conduct your proper research before sealing the deal with anyone.
They haggle over rent
While it’s somewhat expected for people to negotiate a bit with a landlord regarding the rent costs, it can actually be a red flag if they’re trying to get it lowered dramatically and right off the bat. This could insinuate the individual won’t be able to afford the cost of the property in the long term and would only give you a headache trying to work with them.
Having that said, the biggest cause for concern is when a potential tenant tries to talk down the price before even viewing the property. This suggests the individual is not serious about the property, and their sole purpose is to get the lowest price out of you.
If a prospective renter is already pointing out everything wrong with the property or the service you provide, run and don’t look back. Based on our experience, this pattern of behavior will carry on throughout the tenancy and could even get worse, turning into constant complaining about the property and even neighbors. The more you might make concessions for these demands, the more they might take advantage of you.
These are the kind of tenants you want to stay away from because no one wants to deal with someone who sees the glass half empty. A renter like this can be a real problem for you, unpleasant to deal with, and time-consuming.
References are a major source of information to check if the candidate is a good fit. Thus, you need to make sure the references the individual has provided you with are from credible sources. These include a former landlord, employer, or professor, not a close friend or family member.
If references aren’t provided, or they only supply limited knowledge about the person, this is not a good sign, and you should keep an eye open. This significantly limits your ability to judge whether the person is suitable.
Bad credit report
A bad credit score often means the applicant has failed or is late in paying a previous credit card, rent, or loan payment more than once. Renting out to someone with a bad credit report runs the risk of the individual continuing this pattern of late or incomplete payments, meaning you may not collect your rent on time.
If you are screening a tenant with a bad credit score, don’t hesitate to communicate the problem and let them know it probably won’t work out. This is not discrimination; at the end of the day, you need to look out for your business’s best interest.
We’ve talked a bit about credit records, but how about their employment status? We understand that asking applicants for their past payslips may feel too personal and like you’re intruding. However, when it comes time to collect your rent, you’ll be relieved you ever decided to ask. The main thing you must consider is why you would ever lease your property to someone who can’t afford it.
Depending on circumstances, unemployment could mean someone has just moved and is looking for a new job, but you also need to protect your own interests. Without an applicant's income guarantee, you could find yourself in a tricky situation with little to no profit, even needing to take money out of your own pocket.
Together with their employment, you can get proof of income. Proof of income comes in the form of legal documents, such as W-2, bank statements, 1099 Forms, letters from employers, etc. These documents will confirm their employment status and details and payment. If they hesitate to give you this, you might consider it a red flag that needs further investigation.
If the candidate doesn’t provide all the information you require, then you should raise some concerns with the individual. Firstly, you need to check that this wasn’t a mistake before jumping to any conclusion that they’re hiding something.
However, if they cannot provide all the details you require even after pointing this problem out to them, maybe you should rethink renting your property out to this tenant, as this can be a concern for you and you’d rather give access to your property to someone you trust and have all the details on.
Without having a checklist of things to look out for, you could find yourself dealing with difficult tenants who neglect to look after the property or don’t pay their rent on time. But you must be attentive from the head start to avoid these situations.
A property manager can help you with the screening process, and they can also help you look after these red flags that sometimes could go undetectable if you're not paying enough attention. They are skilled professionals who have worked with all different types of people, and they can tell when there is a bad pattern that could potentially damage your business.
Get in touch with us today and learn more about our services.