No one wants an irresponsible tenant. People that damage property and miss their payments are every landlord’s nightmare!
If you want to prolong the life of your property, the best way to do that is to rent to people who take care of the house when you’re not there. However, finding these kinds of tenants isn’t a matter of luck.
A detailed tenant application process leaves you choosing from the best pool of applicants. As you fill your vacancies, be on the lookout for these four warning signs. If you see a red flag, it’s time to move on to the next applicant.
1. Low Credit Score
Probably the easiest warning sign to spot is a low credit score. Unless there’s been a medical issue, a score below 600 requires more research and investigation.
Look at the applicant’s credit report for these types of details: Do they pay their bills on time? When did they last pay towards their student loans?
If they don’t pay their DirectTV bill and haven’t paid student loans in two years, find another candidate. These habits carry over to rent, and patterns of late payments and collections are red flags.
2. Mismatched Tenant to Space Ratio
If you have one person renting a large house (four or more bedrooms), dig a little deeper. More than likely, other people who’ve been intentionally left off the lease will live there too.
For example, we’ve had to evict a tenant with eight people living in a five-bedroom house – and only one person on the lease. When we did the six-month property inspection, we found beds in every room. The tenant made a bunch of excuses about having frequent guests, but when we talked to the neighbors, they confirmed the “guests” definitely lived there.
When you see a large gap between renters and capacity, always ask for details.
3. Past Evictions
If applicants have past evictions, you should be hesitant to rent to them. We recommend looking into it even if an eviction has been paid off. They were evicted for a reason – find the cause and then decide if you want to move forward.
It’s possible they had the eviction 5+ years ago and have proven themselves a reliable tenant since that time. In those circumstances, we’re willing to consider them. But in most cases, an eviction signals a red flag and, most likely, a denying factor.
4. History of Late Payments
Talk to previous landlords when vetting your applicants to find out if they’ve had late payments or non-sufficient funds. We keep a form on our current tenants that tracks the history of payments, and we send this same form out to references for our applicants. Some tenants always pay rent, but they also always pay late.
For example, let’s say a landlord calls to check payment history for one of our previous tenants. When we pull up his form, we see he had ten late payments, two non-sufficient funds, and three eviction calls within a year. He always paid eventually, but that’s not the type of tenant a landlord is looking for.
Rent should be paid on the first of every month, not the 10th or 15th. If they have a history of paying late, they will continue to pay late – it’s not suddenly going to click for them to pay on time.
Invest the time to find out more about your applicants as you fill your vacancies. By checking credit, references, and job history at the beginning, you’ll save yourself the time and money a bad tenant costs.
Need help dealing with trouble tenants in your rental property? Send us a message here.