Tenants who give you nightmares keep you up at night. You are proud of the quality of your properties and the people who live in them, and you wish the residents took the same pride in their homes as you do.
You are responsible for thoroughly finding, vetting, sorting, and verifying the good renters from the bad renters. This includes determining whether or not they pay their rent on time, whether or not they treat their rental units with disrespect, and whether or not they falsify background information during the tenant screening process. These concerns can cause you, as a current landlord, a lot of headaches and, in the worst case scenario, legal battles and corrupted property portfolios. If you're in this position right now, you should try to avoid them.
If you talk to enough landlords, you'll eventually hear some truly terrifying tales about their professional tenants. They go from one landlord to the next and rip them off, leaving in their wake a trail of ruined rental properties and significant financial losses.
How come these terrible renters always seem to get away with it?
It is not as easy as it may seem to get rid of a difficult tenant. Tenants who cause problems have a tendency to rent from smaller landlords because they believe these landlords will be more accommodating to their needs.
The tenant who is causing problems should prioritize finding a place to lay their head as their first order of business. It's possible that they never had any intention of becoming a problem tenant, but now that it's too late, they'll need to come up with some creative solutions.
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Tenants who are known to cause problems will typically avoid properties that have on-site management or leasing offices. This includes large apartment complexes that are run efficiently. They are aware that there will be an excessive amount of scrutiny, and that following "standard" procedures will result in their application being denied.
Maintain an Air of Professionalism in Your Ads
Let's begin with a piece of advice that is entirely under your control: the advertisements for your property.
Tenants who do not pay their rent on time or who have a history of doing so look for advertisements that signal that they will be easy prey based on the language used and the design of the advertisement.
This is not a scare tactic designed to make you question the efficacy of your marketing efforts, both online and offline. Rather, it is a simple and effective method for attracting good tenants who have credit scores that are spotless and who have undergone background checks.
Make sure that all of your advertisements, whether they are printed or digital, have a clean and credible appearance. When describing rental units, you should use industry terms and language that is more upscale. You can demonstrate your professionalism as a property owner or manager by including high-quality photos and even a management logo on your website. You should also include the contact information for any property management companies that assist in the oversight of your complex.
Do not state that you are looking for a "immediate tenant," advertise multiple price reductions, or mention that your property has been vacant for an extended period of time. It is possible that these are accurate, but disseminating this information is analogous to shaking the hands of problematic potential tenants and personally inviting them to begin a lease. Serious and accountable tenants are more likely to respond favorably to serious and accountable rental ads. On the other hand, the opposite is also true. Your dream home can become a reality when you work with MJS Construction Group, because we offer the finest selection of dual occupancy options.
Frequently Asked Questions About Tenant
Tenants who are problematic typically pay their rent late or don't pay the full amount due. They frequently fall behind on some of the rent, and it is never completely paid off until the end of the lease. The best tenants keep open communication with their landlords about any and all issues that require attention, including requesting permission, negotiating lease terms, and reporting maintenance issues.
A tenancy database, also known as a "bad" tenant database, is another name for a tenant blacklist. a tenant blacklist. Information about tenants is gathered and stored in these databases, which are managed by private companies. They are a tool that real estate agents and landlords can use to evaluate potential tenants after they have submitted an application to rent a property.
If your tenant is more than six months behind on rent payments or if the terms of your agreement with him specify that he must do so, the first thing you should do to evict him is to have his lawyer serve him with a notice to vacate the premises. The statutory requirement to give notice of intent to vacate applies to the termination of any and all types of periodic tenancies.
Monthly income at least 5 times higher than the rent you're charging. Good credit score. Steady history of employment, without regular upheaval. Complimentary references from previous landlords and current employer.
A landlord can blacklist the tenant with credit bureaux at this point. In general, if the tenant does not resolve the arrear rental within 20 days, the landlord can consider cancelling the lease, and suing for the arrears.
Conduct a Strategic Prospective Tenant Screening Process
A significant number of current landlords and property management companies are aware of the significance of tenant screening, but they struggle to find screening methods that are both natural and comprehensive.
These preliminary background checks are critical, as they serve as your organization's first line of defense against problematic tenants.
The most effective method for identifying potential red flags prior to engaging in more in-depth screening is for landlords to schedule an early meeting with prospective tenants. You can give any of the following a shot, depending on what fits your routine and how comfortable you are with it:
- Face-to-face meeting: A face-to-face meeting with a prospective tenant gives you the opportunity to review the written lease, rent payment and collection protocol, income restrictions, and tenant jobs, as well as answer any questions the prospective renter might have, such as whether or not you require renters insurance. This type of meeting is likely to be the most fruitful. You will also have the opportunity to have direct communication with this individual, which, as all managers are aware, can be of great benefit.
- Phone call: If you can't get together in person for a quick chat, consider giving them a call instead. These allow you the opportunity to convey the stipulations of the lease in a clear and concise manner while also providing insight into the communication preferences and character of the individual.
- Email: A person's ability to communicate courtesy and promptness in their email correspondence can reveal a lot about their potential as a renter. Think about using email as an additional screening method for potential tenants early on.
Avoid Yes or No Questions In-Person and in Rental Documents
Does your written lease or rental application contain a standard list of questions that can be answered "yes" or "no"? If this is the case, you are passing up a fantastic opportunity to differentiate between good and bad tenants, particularly those who will be prompt with their rent payments.
Think about all of the different ways you can formulate vetting questions that are specific while still being brief across all of the lease documents and in-person interactions. For instance, rather than asking the potential tenant if they have enough money to cover the first month's rent, application fee, and security deposit all at once, you could instead inquire about when they will be sending you these deposits. Instead of asking if they have ever rented before, you should ask for the contact information of any previous landlords they have had.
A little-known strategy for avoiding tenants who are a nightmare is customizing the language of the written lease agreement and the rental application. This is also an important factor in qualifying. The use of yes-or-no questions can only take residents so far in the direction of making decisions that give them confidence and comfort.
Use the First Showing to Steer Clear of Bad Tenants
There are a lot of different ways to use the first showing to find out about a tenant's potential as well as their potential problems. When a prospective tenant is being shown a space for the first time, experienced landlords and property managers should keep the following in mind:
- Timeliness: it is not exactly a glowing recommendation when a potential tenant arrives late to their showing appointment. Although it does not in and of itself make them a bad person, it does tarnish the impression of them as a responsible and proactive lessee who you would like to rent to.
- Demeanour and appearance: Both the prospective tenant's demeanor and appearance are important factors to consider. Does the prospective tenant seem pleased to be there and genuinely interested in the rental unit? Do they maintain a positive attitude and ask questions throughout the entire tenancy agreement, application form, and background check process? Or do they have an attitude of "let's get this over with," which is cold and unnerving to those around them.
- This is a trick that has been used in the rental industry since the beginning of shoe rental. A common way for managers to gauge the responsible nature of renters is to observe whether or not they take their shoes off upon entering the room. Make your own decision regarding the significance of this, and pay attention to the other ways in which they engage with space.
- Condition of their vehicle: Check to see if you can get a glimpse inside the prospective tenant's vehicle. Is there litter lying around, empty wrappers and bottles on the floor, and items that have been forgotten crammed into the back seat? It is highly likely that the way in which they treat their own vehicle is indicative of the way in which they will treat your unit.
- Responses when discussing the rules and qualifications for leasing: The manner in which an individual responds when you review lease rules, tenant credit scores, the collection of rent payments on time, and any other renter requirements says a lot about that individual. Is the person curt or responsive, casual or engaged, or possibly even visibly aggravated or verbally hostile? You don't have to accept the less desirable option.
Write a Rental Application Protecting From Terrible Tenants
At this point in the process of screening potential tenants, you should hopefully have some indication as to the type of tenant an individual will be. The rental applications themselves are not the only source of this information, nor are they the final one. However, they are invaluable for conducting in-depth research into the applicant's history, qualifications, and the likelihood that they will pay their rent on time.
The following information is typically requested on the best rental applications:
- Name, date of birth, and social security number of the individual
- Applicant's current job
- Proof of the applicant's monthly income as well as the applicant's monthly income
- Supervisor of the applicant and their contact information should be included.
- Current location and address verification are required.
- Rental background, including the typical most recent two to three places of residence
- References from landlords
- References to other people's personalities from outside the family
- Primary and secondary contacts, also known as next of kin,
- Statement granting permission to conduct full credit and background checks, including a check of the applicant's criminal history
- Any additional information regarding the potential tenant that you might require in order to compile an accurate profile of them, such as whether or not they have pets, a history of legal action, or whether or not they have sued previous property managers.
When asking questions, it's important to avoid using the binary "yes" or "no" language entirely. Do not immediately draw conclusions about an applicant simply because they skip a section or leave it blank. Provide a space on the form for individuals to explain things that may not appear to be in the best light on paper and to detail any mitigating circumstances that may apply.
Don't Slack on Research and Rental Application Verification.
One more piece of advice that lies squarely within your sphere of influence: Carry out a comprehensive background check on the individual, including a credit check and an eviction report.
The only way to verify a tenant's application is to carry out the background checks listed below, despite the fact that tenant screenings can sometimes give the impression that they are overly cautious and time-consuming. It validates their responses and provides you with the peace of mind that you are renting to someone dependable, all as a result of your support for a comprehensive screening process.
- Do a search for them on social media: This nifty little trick is not only for those in charge of hiring employees. A quick search on Facebook, Twitter, or LinkedIn can tell landlords a lot about a person's lifestyle and the type of renter they might be able to expect from that individual.
- Income and supervisor follow-up: It is tempting to put faith in the number that the applicant reports as their income; however, you should do your research and contact the applicant's employer directly. You will need to find alternative ways to verify an applicant's income if they are self-employed, work as freelancers, or are employed as part of the expanding gig economy. In order to verify the accuracy of the numbers, you should request a copy of the tax returns from the previous year, employment contracts, bank records, or even the contact information of freelance clients.
- Follow-up on the job: Does the company or position listed on the application still exist? There are some landlords out there who have a bad reputation, and we've heard some horror stories about them. A quick search on the internet ought to do the trick.
- Follow-up with previous landlords: At the same time that you communicate with the managers, make contact with the employees' two most recent landlords. Make sure that you are getting a sense of the prospective tenant's personality as well as their dependability with regard to paying rent by asking open-ended questions rather than yes or no questions. Although this is not necessarily a cause for immediate concern, it is something to keep in mind if the prospective tenant has never rented before or has moved frequently. Just make sure that you get a reasoned response to your question.
- Conduct a nationwide criminal background check on the prospective tenant either on your own or with the assistance of a tenant-reporting agency to ensure that they do not pose a risk to your property.
- It is possible to obtain a report on an individual's nationwide eviction history by contacting a number of different agencies. This will ensure that you have an accurate picture of the individual's rental history and allow you to compare it to the information they provided on their application.
- Full credit report You can conduct a tenant background check as well as a full credit report by partnering with a credit bureau directly or working with a tenant-reporting agency. Both of these options are available to you.
Include a Mandatory Two-Way Move-In Report
Move-in reports are an excellent tool for fostering further trust with prospective tenants of your rental property.
First things first, as soon as the previous tenant vacates the premises, you should initiate a confidential report utilizing landlord forms. You are going to examine the rental unit in great detail and make careful notes about its condition, paying particular attention to any issues that go beyond the scope of typical wear and tear. The next step is to give the new tenant as much time as possible to settle in before conducting their report. Together, you should look over the two reports to find any inconsistencies.
There are many advantages to having a mandatory report that goes in both directions between a landlord and a tenant. To begin, this could be an indication that the tenant will be difficult in the future if they refuse to review the reports side by side. Second, it provides a written and legally binding rental agreement that can be referred to in the future in the event that there are disagreements regarding property damage. Third, you'll have even more time to evaluate the tenant's sense of responsibility and initiative, which is a win-win situation when it comes to avoiding problematic tenants.
Conduct Regular Rental Site Inspections
In conclusion, but certainly not least, it is essential to organize and continue conducting annual or biannual inspections of rental units.
These inspections are not intended to be intimidating or oppressive for the occupants of your rental property in any way. They are a method to reduce the number of tenants who apply to live in your properties who have a history of being problematic. Instead, the purpose of the sporadic site inspections is to strengthen mutual respect for the space, on both your end as the landlord and the tenant's end as the occupant. Tenants who are good to work with are aware of this.
Make certain that you provide tenants with written documentation as well as advanced notice of the site inspection schedule, and then adhere to the schedule. You can differentiate yourself from other landlords and further emphasize the responsibility you bear as a landlord by having a set inspection schedule. While many landlords give a standard notice of inspection that is valid for twenty-four hours, you can do this. Although there are situations in which landlords are permitted to enter residences without providing a 24-hour notice or adhering to a predetermined schedule, these scenarios are extremely uncommon and should be avoided at all costs.
Partner With a Property Management Company With Experience in Tenant Relations
Finding a property management partner can help you with almost every aspect of the tenant application process, including tenant screenings and the drafting of leases, regardless of whether you are just starting out in real estate investing or are an experienced investor. It will help all of the involved parties experience a greater sense of calm.
Choose property management companies that are based in the area in which your properties are located. Local rental management companies are more familiar with state and local property statutes, fair housing laws, taxes, ordinances, legal advice, and the logistics of real estate investment, among other things, which vary by region. This makes them a better choice for managing rental properties. MJS Construction Group offers the widest variety of home builder services available in Melbourne, and they can assist you in constructing the home of your dreams.
You should also take note of their selection of managed properties in their portfolio. It is highly unlikely that you will find success working with a firm whose primary focus has been on commercial real estate rather than residential rentals or single-family homes. In addition to this, they are able to offer the following services to alleviate the day-to-day burden of your current obligations as a landlord:
- Comprehensive tenant screening, including but not limited to background checks, credit reports, and a review of previous evictions
- Accounting services for properties, including management of monthly rent payments and monthly payments to municipal accounts
- The preparation of a written lease agreement with recognized legal counsel and advice
- In an ideal world, maintenance and emergency repairs would be performed round-the-clock.
- The eviction of tenants and the recording of eviction reports
People who are known to be manipulative or who have a track record of poor leasing habits typically avoid properties that have an explicit management company relationship. Because these companies provide an additional layer of procedural and legal protection, it is much less likely that a problematic tenant will be able to get away with non-compliance. This is because of the added layer of protection.
Investigate the property management firms in your region to determine which ones offer the services and regional expertise that best meet your requirements. In many circumstances, you will find yourself wondering how you ever managed without one.
Maintain Good Relationships With Your Tenants
You should do everything in your power to avoid having a tense relationship with your tenants. Always make an effort to keep things civil and respectful, and ensure that you are acting responsibly on your end.
Tenants should also expect that there will be times when events occur that are beyond their control. For instance, if they were laid off from their job and then needed to find a place to rent that was cheaper, they might find themselves in this situation. In situations like this, you want to have a positive relationship with your tenant so that they can open up to you about something like this without feeling awkward.
In conclusion, if any of your tenants have any requests, particularly those related to the upkeep of the property, you should ensure that you respond as quickly as possible and do what you can to maintain a positive relationship with them.
Respecting the Tenant
It is very important to respect the tenant if you want to reduce the amount of risk you take on as a landlord. Many renters have negative feelings toward the property management companies that oversee their buildings because they believe the companies do not handle maintenance requests effectively or do not respond to tenants' requests in a timely manner. They may not take as good of care of the property as they should because they have the impression that the management company is not concerned about their health and safety. We are aware that if we handle repairs in a timely and appropriate manner, tenants are more likely to report other maintenance issues in the home, which helps ensure that they are maintaining the property.
If you respect the tenant, then the tenant will respect the property and the terms of the lease, which is not in your best interest as a landlord to have a tenant who is unhappy in your rental property.
We have found that having a comprehensive screening procedure, educating the tenants, and treating them with respect all contribute to creating a win-win situation for everyone involved. These are the factors that significantly lower the likelihood that you will have a tenant who does not pay the rent or who is willing to cause damage to your property.
The only way to ensure that you won't end up with a bad tenant applicant is to screen them carefully and turn them down!
After you have secured a tenant for your property, these steps won't be of any use to you. Once a problematic tenant has moved in, the only way to remove them from the property is to evict them, which can be a lengthy process and can be very expensive.
Instead, you should invest some additional time up front to screen them, conduct interviews with them and their contacts, and conduct as much research as you possibly can. One hour of your time now could save you months of frustration!
If you give the advice that we've given in this blog post a try and put it into practice, the chances of you having troublesome tenants will go down. We can put you in touch with a number of highly qualified attorneys who specialize in real estate law if you have any questions or concerns about renting out your property.