In the book “The Book on Managing Rental Properties” by Brandon and Heather Turner, a comprehensive guide to successful property management is presented. One critical aspect they emphasize is tenant screening. In particular, they identify seven types of tenants they will never rent to. Let’s delve into these key insights in more detail:
Prior Evictions: Tenants with a history of evictions pose a significant risk to property owners. Conducting thorough background checks is essential to identify any prior eviction records. This step helps prevent potential issues related to non-payment or problematic behavior that could impact the property and other tenants.
Violent Criminal Backgrounds: Maintaining a safe environment within rental properties is of utmost importance. Screening tenants for violent criminal backgrounds is a necessary precaution. Utilizing background checks helps identify individuals with a history of violent offenses, ensuring the safety and well-being of all residents.
Repeated Late Payments: Consistent late rent payments demonstrate a lack of responsibility and respect for lease obligations. Applicants with a track record of chronic late payments should be carefully evaluated. Allowing such tenants to rent your property can cause financial strain and disrupt cash flow, potentially leading to eviction or costly legal proceedings.
Poor Credit History: A history of poor credit indicates potential financial instability and difficulty in meeting rental obligations. Evaluating credit reports can provide valuable insights into an applicant’s creditworthiness and their ability to manage financial commitments. Consider factors such as credit scores, outstanding debts, and past delinquencies.
Pet-Related Property Damage: While allowing pets can broaden your tenant pool, it’s important to screen for responsible pet owners. Past incidents of pet-related property damage may indicate a lack of accountability. Implementing a pet screening process, such as reviewing pet references and requiring pet deposits, can help ensure responsible pet ownership and minimize potential property damage.
Frequent Job Changes: Applicants who frequently change jobs or exhibit an inconsistent work history may struggle with financial stability and reliable income. Evaluating employment stability can provide insight into an applicant’s ability to meet rental obligations consistently. Requesting employment verification and income documentation can help assess their financial reliability.
Lying on Application: Applicants who provide false or misleading information on their rental applications raise red flags about their honesty and integrity. Thoroughly verify all details provided by applicants to ensure transparency and reliability. Conduct comprehensive background checks and contact references to validate the accuracy of the information provided.
By implementing a rigorous screening process that considers these seven factors, property managers can mitigate risks and foster a positive rental experience. Prioritizing tenant selection based on reliable criteria helps maintain a stable and profitable rental portfolio while minimizing the likelihood of future problems.
Remember, successful property management starts with diligent tenant screening. By adhering to these guidelines and investing the necessary time and effort into the screening process, you can avoid potentially problematic tenants and create a more secure and prosperous rental property business.
(Turner, 2015, The Book on Managing Rental Properties, BiggerPockets Publishing LLC)
