RED FLAGS TO WATCH FOR WHEN SCREENING TENANTS
30-05-2016 Tips and Advice
At Elite, we use the most thorough and proven methods of tenant screening in the industry. Here is an article that discusses some of the basic areas to look at in order to ensure your tenants will be honest and trustworthy:
Red Flags to Watch for When Screening New Tenants
Filling a vacancy with a new tenant is a scary experience for any landlord. We've all heard the horror stories about tenants who cause thousands of dollars in damages and eviction fees, or worse, the tenant who becomes a dangerous menace to you or other residents. Who can forget Michael Keaton's chilling portrayal as the tenant from hell in the movie "Pacific Heights?"
So how do you prevent devious and freeloader tenant types from occupying your building? Start, by being observant to what the applicant says and does and stick to your rental criteria - even if it means going another week or two without the unit being rented. Watch for these red flags when screening your next tenant:
Always ask what an applicant's move-in date will be. Unless the person moves out on the very day his lease expires, he must provide some form of notice to the landlord. Be wary of the applicant who tells you he needs to move in right away, because it often means one of two things: They don't care about giving notice to their current landlord or their existing lease is not being renewed because they have been asked to leave by a certain date. Both of these situations should not be acceptable to you. Of course, there may be exceptions to this rule. For example, the person does not have a place to stay because of a flood or fire at their current residence; he moved here from another state or she is fleeing a violent environment . For all these exceptions, ask the applicant to provide documentation.
"I already have my credit report so you don't have to run one." This is a common ploy to keep landlords from running their own reports and background checks. Don't fall for it. Credit reports, wage stubs, landlord references and everything else can be purchased over the internet. Tell the applicant that it is your policy to run your own credit report. Get written consent from all applicants to do rental and work history verification checks. Doing so will make employers and landlords more willing to provide you their information.
Do not use the supervisor's number an applicant gives you. Services exist that not only provide fake pay stubs but also a contact number for landlords to call and check for employment. Make the effort to search the internet for place of employment and contact human resources department or place of business for dates, salary and length of employment.
Inspect pay stubs. Unless the applicant works a straight commission job, withholding taxes should be taken out if he is a W-2 employee. If your applicant is self-employed, search for the business on the internet and request to see copies of two years of tax income documents including the Schedule C form.
Be wary of renting to people without some form of identification with their picture on it. The ID should be issued by a government agency (domestic or foreign) and contain their birth date and signature. Make a copy and compare the signature from the identification card to the one on the rental application. Both signatures should match.
Most applicants will have a social security number, and you can use this for entering information to get a credit report. If the person does not have one, ask to see their tax identification number instead (this number can be issued by the IRS within a couple weeks).
Missing or Inaccurate Information
Be suspicious of information that is left out on the application: Missing addresses and phone numbers of prior landlords are examples. Similarly, look for addresses that show up on the credit report that are not listed on the application. These may be prior residences with a poor rental history. Make sure the current address on the check and photo ID match the applicant's residence. Many alias names linked to the same applicant can be another red flag. When the applicant signs the application, make sure the signature matches the name on the photo ID. If you have to serve this tenant and you don't get the name right, it can delay the process for weeks.
Forms of Payment
Crooks and con artists won't have checking accounts in good standing, so when signing a new tenant, don't accept a personal check or some other form of non guaranteed funds. Instead, opt for a cashier's check, credit card, debit card or money order. You can verify funds are deposited within regular time periods by requesting to see four to six months of bank statements.
It isn't good business practice to accept rent in cash payment where there is no paper trail. Be suspicious of people who have piles of cash but list no means of support or source of funds on their application. You don't want a tenant operating an all cash business (escort service, drug dealing, etc) out of your property either.