The idea of owning an income property and renting it out sounds very appealing to most people. What a great way to earn extra income, and in some cases potentially have the mortgage of your property paid by the tenant’s rent money! It’s the American Dream with the added feature of a passive income stream. This is definitely possible, and many property owners have successfully accomplished this. Through a combination of excellent intuition, tenant screening by “feel” and just plain luck, there are landlords who have longtime trustworthy tenants or a series of good tenants in their properties for years without any major incident. However, this is certainly not the case for all landlords who do not use tenant screening background checks. As I’ve described in past blog posts on ActiveRain, I’ve been a landlord for several years. I started as a kid with some extra money looking for a way to become rich as quick as possible. Well, that didn’t work out so well (shocking, I know!). But my experiences have given me valuable insight that I’ve been able to translate into a lucrative tenant screening career. I do my best to pass along this insight whenever possible.
One tidbit of insight: know the risks. There are a number of pitfalls that go along with being a landlord, and there is always some risk involved. Most landlords and tenants begin as strangers to one another, and it is virtually impossible to know for sure if a person is trustworthy just based on sight, a short conversation and a handshake. Without a criminal background check it is impossible to be sure if someone has a criminal past. Possibly the biggest pitfall a landlord faces is the potential of renting to someone who rents a property with no means and often no intention of ever paying rent. The fraud often begins with a series of lies on the rental application. The lies can be about employment, income level and past residences. You want to believe in the trustworthiness of people (or at least I did), but unfortunately I’ve learned that people can will say anything to get what they want.
For example, the scam could involve writing a big check for both the security deposit and first and last month’s rent. Then a day or two later the tenant will call you claiming to have a medical emergency in the family out of state, and needing to move away immediately to help with long term care of a relative. They will ask for a refund of their money and cash your check. Meanwhile, their original check will bounce, you could be out thousands of dollars, and the tenant will be long gone.
Another scam involves a tenant who, after the first month or two, simply stops paying rent altogether. In effect, he becomes a “squatter.” He fully expects an eviction notice and when he receives it, will sue the landlord for a fabricated reason, often “unsafe housing.” This scam artist knows “tenant rights” and the law like the back of his hand. He is an expert at working the system to his advantage. He will milk the situation by acting as his own legal counsel and filing numerous complaints, contempt charges, asking for recusals and stretching out the legal process in any way he can. Meanwhile, he could be living rent-free in your property for months or even years, often trashing the place. Meanwhile, you are accumulating stacks of legal bills, damage to your property and you have lost your peace of mind.
These types of scams can usually been avoided through the use of tenant screening background checks, tenant eviction background checks and/or criminal background checks. Don’t be a victim, and don’t play a guessing game with your property. Screen your rental applicants, and keep your peace of mind. That’s my little morsel of insight to all you new or future landlords :)
For any additional tenant screening advice, be sure to check out AccuRental Tenant Screening!