Thoroughly screening prospective renters is an essential part landlord due diligence. Not only will it help fill your properties with more responsible, prompt-paying tenants, but it can also prevent some major headaches over the long haul.
When you have a less-than-stellar tenant who doesnâ€™t pay rent on time or violates their lease to the point where eviction comes into play, it creates hassles (financial and otherwise) that no landlord wants to deal with.
Filing paperwork for an eviction not only takes up your valuable time… but with sheriff fees, court costs, and legal fees factored in, it can also suck up a couple hundred to a few thousand dollars!
And once you get the eviction ball rolling, the tenant wonâ€™t likely be too pleased with you. So oftentimes theyâ€™ll take their frustration out on your property by inflicting damage that can surpass their deposit amount. After all, once they realize they wonâ€™t get their deposit back, what do they have to lose?
Plus, going through the eviction process, which in some states can take up to three months, could cost you around $1,500 to $5,000 in lost revenue… making eviction a very expensive endeavor.
So what are some best practices for screening tenants in hopes to avoid these pricey headaches?
First, announce up front in your ad that references, background, and eviction history will be verified. This will help weed out some of the unqualified candidates who think they can slip through the cracks unnoticed.
Next, be sure to pull credit reports and criminal background checks from a trusted source. You should be able to conduct a thorough state and nationwide search for less than $25 and pull a credit report for $20 at most. This is not the time to skimp on costs… so run every type of search available. Because, as you can see from above, evicting a renter is extremely expensive. Better to spend $45 up front than to spend thousands after the fact.
Additionally, if itâ€™s at all possible, drive by their current residence and check out the condition of the property. If their yard is littered with old newspapers or kids toys… or if their driveway is overflowing with vehicles, it can be a good indicator that theyâ€™ll treat your property the same way.
And lastly, take the time to verify references. Require that the prospective renter list previous landlords in addition to personal references. Double check any gaps in their residential history. Some people wonâ€™t divulge an address if they donâ€™t want you to contact the landlord. If they claim they didnâ€™t rent, but lived with their parents instead, be sure to get the parentâ€™s contact info to verify this.
A few simple safeguards can go a long way in helping you find renters that youâ€™ll love to work with… and save you a lot of headaches and possibly thousands in lost revenue.