Over the years I have learned a lot about searching for new tenants. When my wife and I purchased our first rental property over ten years ago we had to learn the hard way about what it takes to find good tenants and starting off on the right foot. Below are ten things you can do to avoid some major headaches:
- Never take just their word. I cannot tell you how many times I’ve had folks lie to me with a smile. Some are even good at it to the point they should be professional actors and actresses. Have them fill out an application and get copies of ID’s and pay stubs. This would be a good start in verifying if they are being truthful or not.
- Never accept work in lieu of rent payment or deposit. I have found this is one of the mostly likely to go sour with landlord/tenant relationships. They will either not do the work, or worse, do the work to poor standards. This will especially get tricky if you have to evict them later.
- Never show a property to a surrogate. Yes we live in a busy world, yes they even may be out of town or off shore, but there is NEVER a substitute for the person who will actually move in and pay the rent. Parents are notorious for this when searching home’s for their kids, but unless they are paying the rent and deposit, don’t waste your time showing it to the them, friends or loved ones. Ultimately it needs to be a relationship with you and the actual person living there…no exceptions.
- Never sign a lease electronically. Unless you have a state of the art authentication software do not accept applications or sign a lease electronically. There is too much cyber theft going on and I would always want to see the person applying, match the face to the name on their ID, and match the ID to their paystub.
- Never leave any adult names off of the lease agreement. If there are two adults moving in, make sure there are two names on the lease. If there are four, then four names on the lease, etc. If they say that the other person doesn’t “need” to be on the lease or “comes in from time to time”, then you may want to kill the deal right there. This is common for those who are trying to sneak in a relative or friend with a checkard past.
- Never accept money after signing the lease. The old saying about “money talks and ____ walks” is true to form with regards to making sure you get all monies before or at lease signing. I learned early in my real estate career that folks don’t always follow through with their word and I was left “holding the bag” with a now vacated apartment and no monies. To make things worse, I had to file an eviction to get them out which added to my loss of lease and more monies out of pocket for court costs.
- Never accept a personal check for the security deposit. You may find this hard to believe but there are folks out there who don’t care if you lose money. I remember having a gentleman pay a $1000 deposit only to stop payment on it when he changed his mind. Unfortunately I had yet to deposit it and when I did, I didn’t get a notice from my bank until ten days later. Needless to say it cost me almost a full month’s worth of rent. Try getting them to pay using a cashier’s check or money order.
- Never wait for your tenants to switch over the utilities. Out of sight, out of mind. It may not be intentional but tenants will milk every megawatt of power you leave on for them. Tell them at lease signing the utilities will be shut off the next day (or two if you are feeling nice) and immediately call your local utility company and schedule the shut off after lease signing. If the tenants do what you told them to do then they will have no interruption of services. If they didn’t do what you told them to do, shame on them.
- Never make empty promises or threats. Credibility is key when dealing with tenants. If they feel you are not being truthful, or worse, that they can push you around, it will be a long lease period for you. If you say no pets allowed, make sure you don’t allow pets. If you say the home will be ready by a certain date, make sure it’s ready by that certain date. If you follow through with your word, tenants will respect and trust you.
- Never hold a property without a full deposit. Even if they are the “perfect family” do not fall into the habit of holding a property for someone who wants it. I always tell folks it’s on a first come first serve basis. If they really want it, or better yet have the means to pay, they will do so. Do not enable folks to take advantage of you.
written by C. Gabriel Lewis
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