5 Tips to Avoid Placing Bad Tenants

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Don’t be one of the many property owners with a bad tenant problem. This is one issue that probably could have been prevented. For many owners, they don’t have the tools or resources to screen tenants effectively.

This results in placing a bad tenant that’s detrimental to their rental property business. However, you don’t need fancy software to do tenant screening. In this article, you’ll learn about five tips to avoid placing a bad tenant.

1. Tenant Screening

Tenant screening can mean many things to many people. In its most basic form, it means having a potential tenant fill out an application. For others, it’s an in-depth process that looks into the applicant’s background and current financial standing.

For me, tenant screening means using a best in class and state of the art system. All details of a tenant’s application are considered, including a tenant’s background, economic health, and creditworthiness. Even the pets they wish to bring with them are considered.

There are many systems on the market that can help you perform effective tenant screening. Look for one that offers a comprehensive list of services but is also customizable to your specific needs.

2. Meet the Tenant in Person

While information screening is crucial, nothing can replace meeting a potential tenant in person. This gives you a chance to evaluate the person face to face.

Take a look at how their car looks. The way they keep their car is an indication of how they will keep your unit. If you have a negative gut feeling, follow it. This is your intuition guiding you.

3. Validate References

It’s smart to ask potential tenants for references. While many property owners do this, many never follow through and validate them. This makes the whole exercise useless.

I once had a prospect add his family members as references. While I appreciated the effort, I could not accept those as viable references. If an applicant cannot produce appropriate references, this could be a red flag during your considerations.

4. Validate Employment Income

Always verify the claimed income of an applicant. This helps you to confirm that the tenant has the ability to pay the rent each month. It can also reveal potential inconsistencies that can alert you to a potentially bad tenant.

I once had a prospect tell me that he made $25,000 a month from Google. This alerted me to a possible issue because he had an outstanding debt that was much less than that amount. Validating their income allowed me to accurately determine whether or not they could afford the monthly rent.

5. Contact Current and Former Landlords

Contacting the current and former landlords of a tenant will always be the most illuminating aspect of avoiding the placement of bad tenants. When you reach out to a landlord, and they tell you all good things about a tenant, you are almost certain to have a successful tenancy with that tenant.

In contrast, if you reach out to the current landlord, and they express several negative experiences, this may give you pause. Consider the current landlord’s complaints, their validity, and the surrounding circumstances.

Improve Your Screening and Avoid Bad Tenants

If you follow these five tips, you will improve your ability to avoid placing bad tenants. This will ensure that your bottom line is in the black.

Ignore these tips at your own peril and suffer the consequences of late payments, destroyed properties, and evictions. You’ll find that not only are you out the unpaid rent, but you end up in the negative from the additional costs of cleaning, repairs, and litigation fees.

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PMI JCM Realty Group


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