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Screening Tenants is Important For Property Managers

One of the most important things a landlord does is select tenants. Make a mistake and all the work you just completed and money you spent could all be wasted on a professional tenant that has no intention of paying their rent. Or it could be wasted on a person with good intentions but the inability to keep paying rent over a long period of time.

Managing rentals is not sales. We have to live with our mistakes day in day out. That is if we are lucky. If the mistake is bad enough, we might lose a client or spend a lot of time, effort, and money cleaning up the mess that was created.

My office decided a long time ago that our best bet was to check our own tenants out. We run our own credit reports using one of the major credit agencies. Then we ourselves call the landlords and employers to verify rental and job history. Many companies use 3^rd party vendors to do this. The problem is that these 3^rd party vendors many not be employing the old school methods we use. I know this because a tenant we were kicking out for very poor housekeeping habits was recently rented to by one of those 3^rd party vendors that is supposed to be calling past landlords. We never got the call!

A couple of methods we employ are to use a reverse phone book (also available online) to find out who owns the phones numbers we have been provided by the tenant. We also use the tax records to get the names of the landlord on the deed for past property they rented to make sure the name matches the number on the reverse phone directory. I think many professional tenants are now using cell phones of friends for their landlord references. Do not trust the numbers you have been provided!

The tenant's credit report (make sure you see their social security card and know how to verify that it is real) will have past addresses on it that should match the information provided on your application. If not, start researching until you are satisfied.

In the landlord business it is better to be safe than sorry.

Posted by Robert Machado, CPM MPM Sacramento Area Property Manager and Property Management on 04/16/2008 10:54 AM

Comments (3)

rentals, tenant screening, credit reports

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3 Comments on Screening Tenants is Important For Property Managers

Great information, Robert. It's scary how easy it is to fake references. Kim/AAOA

05/09/2008 03:28 PM

by American Apartment Owners Association (American Apartment Owners Association)

Great ideas, I'll remember those. Here are some more:

Proper screening avoids a lot of problems. I tell plenty of people that their application is denied. It saves me a lot of problems later. It sounds harsh but I can't care about everyone's problems. If they have to explain their situation to me I most likely will not rent to them. I'm not willing to make other peoples problems my problems by taking them on as a tenant.

I find it is important to never give in to an applicant. I'm amazed how many times I get a partially filled out application. When I tell the person they need to finish filling it out and resubmit it some people get mad, others never reapply and some even resubmit another incomplete application. My application isn't that long either it only asks for essential information yet they must think I don't think I really want it, need it or they don't want to tell me. Either way it must be filled out right or the answer is no. Weirdly, they have to be trained to follow the rules. Anyone that can't respect the rules is not someone that you want as a tenant anyway.

One BIG red flag is if they are not able to pay the security deposit in full. If they need to pay it over time the answer is no. If their finances are that tight then they will have a hard time paying rent on a month that the car breaks down. It is amazing how many times somebody will ask to pay the deposit over time and after I say no they say, "that's ok I can figure it out." If you don't make their problems your problems they can usually figure it out themselves and if they can't you don't want to work with them.

Some may say I'm "tough" on applicants and tenants. I say I'm only expecting people to act like an adult in the grown up world. I expect people to fill out a complete and accurate application and then I expect them to live up to the lease, just as they would expect me to live up to what I agree to on the lease. At the same time an applicant is a potential customer and needs to be treated with respect and they need to feel like (until you know differently) that their business is important to you. Being "tough" doesn't make it hard to fill a vacancy either. I can usually get a place filled in a few weeks.

Jeff Stinson

Property Manager

www.stonebridgerealestate.net

05/14/2008 02:57 PM

by Jeff Stinson (Stonebridge Real Estate - Property Manager)

Amen! I agree on all your points, especially checking the deed for the owner of the property. I am amazed how many potential tenants lie to me on their application! It is very disheartening, but drives home the point that stringent checking is absolutely needed every time.

05/15/2008 09:14 AM

by Bill Dowell Condo Assoc. Management in Worcester, MA (Worcester Property Management LLC)

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