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How to Avoid Problem Tenants

Selecting the Right Tenant

The single most important element of property management is the ability to select the right tenant to rent or lease a property. Depending on whether the property owner outsources that task of selecting tenants to a property management company or does it themselves, having an in-depth process in place to completely vet the potential tenant can save a great deal of trouble that can occur after a lease agreement is signed.

Credit and Criminal Background Check

The first step in a comprehensive tenant check is to perform a credit and criminal background check. Many landlords and nearly all property management companies charge an application fee to cover the costs of this type of check. A credit and criminal history check can give an indication of the type of person who is applying to rent the property. Individuals who have recent credit issues might indicate a potential problem committing to financial obligations. If credit issues are several years old and no new issues are present, then the landlord might assume that the individual has made a strong effort to correct their previous issues.

Criminal background activity is a different and more serious matter and careful considerations must be made as to the severity of the crime and how long ago it occurred. Obviously, someone recently imprisoned is more of a risk than an individual who went to jail several years ago and has been a lawful citizen ever since.

The idea is to find the best possible tenant to rent the property, so caution in this area can pay off in the long run and help avoid having to file a notice to quit in the future. It is better to be patient and find the right tenant than rush into signing a lease agreement with someone who has a questionable background.

Legitimate Proof of Income

The next most important consideration is legitimate proof of income that states the individual can afford to pay the rent every month. A potential tenant should be able to provide some form of written proof of income, whether it is a letter from their employer or a copy of their tax return.

Landlords should use caution in this area as well since it is not difficult in today's computer age to forge documents and create an advantageous proof of income. A follow-up phone call to an applicant’s place of work is always a good idea to confirm the information presented in writing.

Are References Useful

While character references can be helpful, they must not be used to shift the decision either way since even the most shady of characters can find someone to act as a personal reference. More importantly, getting a reference from previous landlords will be much more valuable in helping to paint a picture of the kind of tenant the individual has been.

Most landlords will not hesitate to give a detailed accounting of the type of tenant the person was, especially if the experience was negative and the individual left the landlord with unpaid rent or damages. Likewise, any positive experiences the landlord had with the tenant will be revealed. It is a good idea to always get any reference information in writing with an address and phone number of the landlord. A follow-up phone call to the landlord is also a good idea just to make certain the information in the letter came from them.

Whether the landlord is renting the property on a month-to-month lease basis or the term of the lease agreement is for a long period of time, it is important to conduct a thorough investigation into the tenant's background to ensure avoiding renting to a problem tenant. In the end, a face-to-face meeting with the tenant in their current home can tell a landlord a great deal about the individual and how they keep up the property. This is a good final check to perform just prior to making a decision.

A proper background investigation can be a time consuming and tedious endeavor, but this effort is minimal compared to the problems that might be suffered trying to evict and recoup damages from a problem tenant.

Use Real Estate Forms To Help Protect Yourself

Using the proper documents such as a lease agreement can help you avoid problem tenants, or at least have steps in place to deal with them. Create your real estate documents now.