9 Ways to Avoid Bad Tenants
A Good Tenant Screening Process is Essential to Avoiding Bad Tenants
We’ve all had or heard about the “tenant from hell” that will do everything to take advantage of you and try to live for free while damaging your property. Tenant friendly states like Massachusetts, California, New York, and others, really aren't helping anyone and often just make the situation worse.
The key is to try to avoid the bad ones in the first place and screen out these potential tenants from hell. Follow-up is also very important and that is why you should have systems in place to ensure you are always protected.
The single most important thing a landlord can do is to screen the tenant. You should implement a formal screening process and application with an application fee. The application fee should cover the cost of doing a background check, credit check, and eviction records check.
Start by downloading a free tenant application form (and you'll find a ton of other free forms as well) You should include these questions in addition to anything else you may find necessary to screen for bad tenants.
Get Social Security Numbers
- This is required to do a credit check. Additionally, it will be very useful if you ever need to send their debts to a collection agency or court.
Do a tenant credit check
- You should ensure that the tenant's debts are not too high. Typically, a tenant should not have debts more than 1/3 of their income to be a financially stable long term renter.
Check the tenant's background
- You don't want to live next to a felon and neither do your other tenants. Check to make sure the application has a good background with no serious criminal behavior.
Contact information for previous 2 or 3 landlords
- The most recent landlord's information is useless because if this is a bad tenant, the landlord will say anything to get them out.
- Additionally, always verify the information of the landlords.I personally have seen rental applicants make up addresses, or give names and numbers to friends. I always check public records to see if the owner is the same as the name/number provided. If they list an apartment complex with an on-site manager, I search the leasing office number online instead of using the one provided.
Verify specifics about the Tenant's job and income
- Always verify income and never accept under-the-table income toward their numbers.
- Any document can be forged. Research the company they work for and contact them directly to ask about employment. Do not use the phone number listed in the application. If a bad tenant would lie about their income, they will probably put a friend or family member's number there to lie for them as well.
Simply ask if the applicant has you ever been brought to court by a previous landlord for a debt or eviction.
- Most bad tenants don't realize how easy it is to actually check their eviction history and court records especially since you have a copy of their ID, SSN, and previous addresses.
- On multiple occasions a prospective tenant has said "NO" when asked if they have ever been evicted just to find multiple evictions including one pending! Lying on an application immediately disqualifies an applicant and so does a recent eviction.
Have a written lease or tenancy agreement
- A lot of problems can be resolved easily if the agreement is written instead of verbal. This is especially important if you do end up in court.
- The agreement is mutually beneficial as it lays out all requirements from both parties and reduces conflicts. But, since you write the lease, make sure it is full of language that protects you.
Follow the law and be a professional landlord
- It is very easy to get emotionally involved when your money is being wasted, but you are a business person and should always act like it. A bad tenant may goad you into doing something just to use it against you in court. Also, make sure you follow all applicable laws.
Do not hesitate to deliver a Notice to Quit
- A notice to quit is not an eviction. It simply tells a bad tenant to fix their mistake or they may be evicted. Explain to the tenant that it is just a formal step you must take and if they pay it will have no effect on them. If they fail to pay this will save you valuable time.
These steps will help you avoid evictions, and should you end up in court, it should help you get through much easier. This list by no means covers all aspects of managing tenant relationships, but it is a good start.