Every landlord should take the process of screening tenants very seriously because the laws protecting tenants may make it very difficult to evict tenants. It is also the case that, in addition to damaging your property in ways that may not be covered by your insurance, a tenant’s criminal activity on your property may become your responsibility. Fortunately, while there are no guarantees, there are some red flags that you can recognize from the first conversation you have with a potential tenant that can alert you to problems before they happen. W
hen someone calls about your apartment, be sure to get the answers to these questions before going any further.
Will they provide references from former landlords?
Be sure to inform anyone who calls that you will require the names of at least two former landlords and that you will check the references without exception. This is crucial for you to do to make sure that there are no prior evictions, and that rent was paid on time. You will also want to know if former landlord withheld a damage deposit and why, if there were complaints, or any number of other things. A responsible tenant will understand this, and anyone who indicates that they will not be providing references from their previous landlords should be declined right away.
Although people may feel like their financial situation is not your business, you must remember that you a creditor as much as a landlord, and for that reason it is important to know how the applicant has treated creditors in the past. A credit report will tell you if your potential tenant pays their bills on time, if they have ever declared bankruptcy, or engaged in questionable credit practices. Make sure you let prospective tenants know that they will be required to authorize you to check their credit, and while they are free to provide you with explanations of any problems on the report, you won’t accept their application without it.
Inform applicants that you will require their permission to conduct a background check, and if they refuse then you should not consider their application any further. This is a very serious issue because you as the landlord may be responsible for criminal activity on your property. You could also face angry neighbors if you unknowingly rent to a sex offender, for example. You should not discriminate against someone with a criminal past right away, and can take the opportunity to discuss the matter with the applicant, but you should definitely be suspicious of anyone who will not allow the check.
As mentioned above, there are no guarantees that you will avoid problems no matter how carefully you screen your potential tenants. However, especially if you are new to the landlord business, you need to develop best practices to protect your investment. Remember, though, that unless someone has something to hide, they should have no trouble providing you with basic information to allow you to make an informed evaluation of their application.