How do you avoid bad tenants? And find the best tenants possible.

Think about this. There are a lot of displaced homeowners that need to rent due to their house being foreclosed on. This doesn’t mean that you should rent to them. With a little forethought you can be confident in your new tenants. When considering new tenants, think carefully about the following:

1. Income and Debt Ratios – Can they afford your rent when combined with all their other bills?
2. How far is the commute to their job? – This is a critical factor as the price of gasoline rises.
3. How long have they been on the job? – This is crucial but what is even more important is the likelihood that they will have a job. These are the questions you should ask the human resource person when verifying employment. If this is a new job, do they have a history of brief periods of employment?
4. Landlord References – Most landlords will not give a good recommendation for a bad tenant. But some will, just to get them out. That’s why you should always go back two landlords and ask the question, “Would you rent to them again?” Also, ask if they are related to the applicant and how they got to know them.
5. Family Makeup – You must be careful not to discriminate. But the reality is, you should not rent a three bedroom house to a family of ten.
6. Personal References – Most times applicants will use someone that they know will say something good about them. A good question would be to ask the personal reference if they will cosign for the applicant and then forward them an application. This will smoke them out in a hurry.
7. Vehicles – Would you rent a nice house to someone that had two cars but both were 15 years old? You would if you wanted oil all over your driveway. You have to know the financial makeup of an applicant before you rent to them. Dependable transportation and if they have automobile loans are very important when considering the likelihood of getting paid on time.
8. Visit their current residence – This is a critical piece to the puzzle for determining who your prospective tenant is. As a business practice, our team visits new tenants current residences to confirm how they take care of the place, landscaping, pets and family. If they don’t take care of the place they live in now, they won’t take care of yours either.

The key to quality property management is to do your due diligence on applicants before they ever step into your rental house. There is no reason to waste time on people that haven’t paid in the past or those who lie on their applications.

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