True or false: Good credit scores are the sole determination of a good tenant. Well folks, I wish it were that simple. This is many times false. Agreed, tenants with a history of paying bills on time are seen as fullfilling their financial obligations, BUT it doesn’t take into account good character.
True or False: The more you get for rent, the better off the owner is. This often times is a conundrum, because owners want top dollar rentals (who doesn’t?) But if you have a 2 BR house, do you really want 6 adults living there for a higher rent or would you prefer 2 adults and a child? Think wear and tear, because it is a guarantee that the more people per unit = lots more wear and tear = $$$$.
Screening tenants is no small job and not for the faint of heart——especially for a client whose business you want to keep somewhere down the line, when they want to sell. They will not hire you again for anything because your poor selection of tenants speaks volumes about you.
I have compiled a list of “red flags” which have helped me immensely in finding the losers when you are reviewing tenant applications and credit reports.
Bad Attitude: Is this person respectful, looks you in the eye, communicates in a reasonable fashion? Do they immediately criticize the condition of reasonably kept premises? If it starts on day 1, guess what happens 6 months down the line?
Untidy Appearance: Now we are not talking tatooes or piercings here—one of my best tenants was tatooed and pierced ad finitum). Cleanliness is a sign of a “clean living” person. You will be able to figure this one out quickly.
Transient Lifestyle: Let’s face it, life happens—roommates split up, people move for jobs, marriages fall apart. But if someone has a history of 6 different apartments in a year, watch out.
No Job History: Ever. Or employment a few months here and there. You don’t want drifters in and out of your property. It is a sure way to see your property values go down.
Personal Profile: I have a complex where the tenants get along famously. Their age range is between 20’s and 40’s, students, young working etc. One cannot discriminate on age but if you have several applications with all things being equal, choose the tenant who will fit into the culture. An elderly person would not be the best choice.
With a little bit of common sense and a whole lot of background checking, you will find the best tenants for your properties!