Every landlord has experienced that uneasy feeling that something is not quite right about a rental applicant, but cannot put their finger on it. They have some reservations about a prospect, but everything from their pay stubs to a great reference from the current landlord appears to check out. Months later, after receiving consistently late payments, they learn why they had that uneasy feeling… too late.
Today’s rental prospects are savvy and know their new landlords will want some reassurance they will pay the rent on time and maintain the rental property in good condition. Some tenants go to great lengths to provide this assurance, albeit mendaciously.
Landlords who are aware of some tenant tricks can safeguard against bad tenants. Here are some common tenant application deceptions, and ways to foolproof the tenant screening process.
Human Resources vs. Direct Supervisor:
Tenants will sometimes offer direct supervisors’ contact information for verification of employment and salary. Never allow this to be the only form of verification. It is very easy for a co-worker to be given a heads up to answer their phones and pretend to be the supervisor. Always insist on obtaining this information directly from HR whenever possible.
Research Local Tax Records:
When a tenant provides their current address and landlord information, be sure to check the tax records for that property to verify the landlord’s name matches the name on the property taxes. In many cases, tenants convince friends or family to pose as their current/prior landlords when they have poor rental histories. Always ask if they pay rent to a management company or directly to a landlord. If they pay directly to a landlord but the name on the tax records doesn’t match the name provided as the landlord, it is an alert signal that something is wrong. Landlords can also do reverse phone lookups which match telephone numbers to names. If the name provided by prospective tenant does not match the name associated with the phone, this should raise a red flag. This is more difficult to do when the landlord is a private owner; apartment complexes can be easily verified.
Beware the Spiker:
A tenant who has previous history of paying $500 per month is suddenly able to afford a $1,500 per month single-family home may very well be forging income somewhere. Typically, an employee’s income does not spike that much in a short period of time. In this case, do not just rely on pay stubs, which can be fairly easily manipulated. Ask to see last two years tax records in addition to pay stubs and check thoroughly for any inconsistencies. And even if the new income does check out, payment shock can cause the tenant to mismanage their newly-improved income, and still default on rent.
Don’t Be Shy:
When interviewing former landlords, ask the hard questions like were there many complaints about the tenant in question? Of course, the standard questions about whether rent was paid in full and on time should be asked, but prospective landlords should also ask about tenant’s communication patterns and how the tenant handled any adverse situations which may have come up. Sometimes the nicest tenants during the application process can turn into nightmare tenants at the first bump in the road.
Another question for the former landlord is whether the tenant followed proper procedures, for everything from placing maintenance requests to following parking restrictions to HOA rules.
General Due Diligence:
Cutting corners during the screening process is simply asking for trouble. Follow up on every reference provided. Tenants already know their chosen references will likely give them a glowing recommendation, however with some unexpected questions, landlords may find out much more than the tenants bargained for. Charge a rental application fee, to sort the non-serious applicants out before wasting further time on screening. Obtain credit reports and criminal histories. Verify the applicant’s identity, income and employment. Check tax returns.
Most problem tenants can be filtered out by diligent tenant screening, and when excuses start arising and it seems like a lot of work, repeat the old adage that “an ounce of prevention is worth a pound of cure.” Landlords who follow these steps can be reasonably secure with their tenant choices and avoid countless future tenant problems.
Tell us how you screen your tenants? Have you tried any of the methods in the article? If so, what was the outcome?