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Bad Tenants And How to Avoid Them

You’ve already made a wise investment and purchased a rental property that ticks all the boxes in terms of location and amenities. The next step is to find the right tenants to enjoy it! Yet a major challenge as a landlord is avoiding bad tenants, who could end up costing you thousands in property damages or lost rent. Everyone has heard horror stories of bad tenants leaving the property in a sad state, filled with trash, or even destroyed. Another issue is finding tenants who will always pay the rent on time. Although these types of tenants are not common, putting a screening system in place can save you stress and possibly costly consequences down the road.

Before you advertise your property, you’ll want to know your landlord rights and potentially get in touch with a property management company who can help facilitate the screening process. Many real estate agents specialise in rental properties, and can help you make short work of avoiding bad tenants. They have the professional skills and databases to know what to look for and what to avoid. You can start the process of contacting and comparing agents by choosing to register at LocalAgentFinder, to find out more about what your options are.

Leasing agents have extensive experience performing background checks on applicants, making them a good source of information. They know how to see through bad tenants who know how to work the system. In most cases, bad tenants will have had problems with rentals in the past, which is why screening is so important. The following are a few aspects of the screening process that will help weed out troublemakers.

Perform a Credit Check

A sparse credit history doesn’t necessary mean that an individual will be a bad tenant. For example, recent graduates who have just entered the workforce won’t have a long line of established credit. Many agents choose to run a credit check as part of the screening process nonetheless, because it is usually safer to choose a tenant who has good established credit. An applicant’s past history can be a good indicator of what to expect in the future, and can show whether late payments are a pattern.

Screeners will look to see if these late payments were a one-time deal or persistent, and how recently they occurred. Another part of the credit report that is open for scrutiny is the applicant’s past addresses. It’s important to verify that these correspond with addresses provided on the application form, to find out if the applicant is trying to hide something.

Employment Verification

Perhaps even more important than a client’s past is their future ability to pay rent. If nothing else, you’ll want to choose a tenant who has a current, steady source of income. Most property managers will ask to see the applicant’s pay stubs for the past few months, and will also ask for employment references including the current employer. When verifying this reference, it may be better to look up the company’s number in the phone book rather than relying on the number provided by the applicant. This helps ensure that the screener is actually speaking to the applicant’s employer, rather than a friend. During this phone call, the applicant’s role at the company and their employment status can be confirmed. This approach may seem extreme, but it’s important to remember that many applicants know their way around the screening process.

Contacting Previous Landlords

One of the best ways to find out what someone is like as a tenant is to get in touch with their previous landlords. This will help you find out more about the condition that previous rentals were left in, as well as whether or not the applicant had pets or long-term visitors. One good screening question to ask is whether or not the landlord would rent to the applicant again. If there’s any hesitation in their voice, this could lead to more questions to find out why.

Use a Tenant Database

Many professional property management agencies have access to a tenant database. These are run by private companies, and show whether or not a tenant has had any legal actions filed against them or if there are any other red flags that have been officially reported. When selecting a real estate agent or property manager using the free dashboard service at LocalAgentFinder, you’ll want to ask about access to tenant databases.

Documenting Property Condition

In addition to using a qualified agent to screening tenants, another way to protect your property is by taking detailed photographs of your property before anyone moves in. It’s best to do this with a digital camera, providing easy access to files. A copy should be provided for the tenant, as well as yourself. If you are using a property management company, they will also need to retain a copy of these photos and may even take them for you. These photos can be used as a deterrent from making any false claims regarding damage later on. They can be used as evidence should your property show signs of damage after a tenant moves in.

Short Term Lease Options

If you’re on the fence about a candidate but want to give them a chance, you could consider offering them a shorter lease. This could be a good option for someone with very little established credit but steady employment, such as a recent graduate. If you only have the slight reservation of the limited credit history, you could offer six month lease as a trial period. The contract could then be extended or terminated according to both parties’ needs. This is one option to discuss with your real estate agent or property manager when looking for tenants.

Consider Landlord Insurance

With proper screening procedures in place, chances are that you won’t need to use it. However, landlord insurance is another option to help protect your investment. This insures your building against loss, theft, or damage. There are also policies that specifically cover the cost of unpaid rent or legal costs for chasing up on this lost income. Because these policies will differ, it’s best to compare your options carefully to find the right fit.

By following these basic screening principles, you can take the proper measures to protect your investment from bad tenants. Advertising your vacant property and screening applicants can be a time-consuming process, which is why so many landlords choose to work with real estate agents or property management companies. By putting the screening in the hands of professionals, you can improve your chances of finding good tenants and fostering a rewarding tenant and landlord relationship.

What’s next?

There are over thousands of real estate agents currently registered at LocalAgentFinder, many of whom deal with rental properties. Learn how it works and use this resource to compare agent proposals in order to find the right agent to handle your tenant screening needs.

LocalAgentFinder View all articles by LocalAgentFinder

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