7 Ways to Avoid Renting to Bad Tenants
As rent continues to increase in the United States, it’s important to make sure the tenants you’re allowing onto your property can not only afford to be there but that they’re going to respect any rules you might have.
Bad tenants are a rarity, but when they do happen, they can wreak havoc on your property, and the effects can last a long time.
So, how can you avoid bad tenants? How can you ensure the people living in your units are going to treat them with the same care you do? Luckily, we’re here to help you answer that question.
Read on to learn seven of the most effective ways you can avoid a bad tenant experience.
1. Use Your Listing to Pre-screen Tenants
The best way to start looking for an impressive tenant is with an impressive listing.
Set the rent price, come up with a catchy title, include high-quality photos, and also a detailed description. The better your listing, the more likely you are to attract serious renters.
By simply including the rent price, you’re going to start weeding out applicants who can’t afford your unit. To take things a step further, make sure you include a few steps of your screening process. If you can lay out the entire process, that’s ideal.
Being as transparent as possible from the beginning is going to help possible tenants know what you expect from the beginning, and it can help a lot with boundaries.
2. Pre-screen Before Meeting
To weed out the tenants that you know won’t meet your standards, start with pre-screening before you even meet face-to-face. This can be done with a phone or email interview that goes through a few of the requirements. Here are a few questions you can ask:
- Where do you currently live?
- How many occupants will be living in the unit or home?
- Do you agree to a background check?
- Are you willing to fill out a rental application?
- Do you have any references?
- Do you or any of the other tenants smoke?
- How many pets do you have?
The next step is completely up to you, but it’s to invite them to tour the property and to fill out a proper application. This is also where you’ll run background checks and verify any of the information they’ve given you.
3. Ensure Your Property Is in Good Condition
Yes, clean properties appeal to all kinds of tenants, but an unkempt one is only going to drive the good ones away. To avoid losing your ideal tenants, it’s important to keep the condition of your property high at any and all times.
This is especially important, however, during any tours you’re hosting.
4. Know What Information to Ask For
One of the biggest reasons landlords have bad experiences with tenants is an ineffective screening process. To ensure that your screening process is as effective as possible, you have to ask the right questions. You also have to know how to phrase them.
The more information you have, the easier it is to know whether or not they check off all your boxes. Here are a few of the most important pieces of information you should collect when searching for potential tenants:
- Monthly income
- Employment status with verification (bank statements, pay stubs)
- Criminal background check
- Credit score
- Rental history
- Lifestyle information (does it line up with your property? i.e. smoking)
- Contact information for these references
This is your chance to get creative with the pre-screening process. You can tailor this process to your property in order to ensure that every tenant you’re approving matches what you’re looking for.
It’s also easy to be ineffective here, but it’s important to remember that that’s only going to lead you to trouble later down the line.
5. Run a Background Check
While you probably would like to think this isn’t common, renters do lie about things like who they are, what they do, where they work, and even where they’ve lived in the past. Trying to sneak in an extra roommate or pet is also a common problem, and it’s important to do your very best to weed those people out.
This process can be a hard one, and a lot of people know that, so they won’t really hesitate to lie about small things. They know that a lot of properties won’t even bother to check.
It’s important to be thorough when you’re running your background check, however, because it’s going to help you not only identify a tenant’s identity but also help you get to the bottom of a few other things like:
- Prior evictions
- Criminal history at the county, state, and federal levels
- Sex offender status
- Whether or not they’re on any global terrorist watchlists
While the likelihood of a known terrorist attempting to rent one of your units might seem unlikely, it’s still a possibility, and it’s still something you should watch out for. The same goes for if you have children or young adults on your property.
Knowing whether or not any potential tenant is a sex offender is essential. While being a registered sex offender comes with its own rules and regulations, you still want to be sure that person is following the procedures they’re supposed to be following.
6. Have a Detailed Lease or Rental Agreement
Lease agreements are extremely important and downright essential.
They provide clarity for both parties on a number of situations, and they help both you (as the property owner) and the tenant knows any rights and regulations that come with living on the property.
This is where you write out or clarify any and all necessary requirements you have for tenants to live on the property. This is also where you layout any procedures that tenants might have questions on, like:
- Pest control schedule
- How to forfeit the lease
- Limits on occupancy
- Monthly rent and utility amount (if rent covers any)
- How to request repairs and maintenance
- Restrictions you have on the property (no pets, no smoking, etc.)
- Names of each tenant and number of pets
- Renter’s insurance requirements
- Lease term
The list truly goes on for what to include in your lease agreement but one thing shouldn’t change.
The more detailed you are, the more covered you are in case of any damage or emergencies. This document can help your tenants answer any questions they may have when the need arises, and it’s going to give you something to look back on if anything happens.
A big thing for you to also include is the landlord’s right to enter the rental property. Layout the policies you have for different situations (like providing 24-hour notice beforehand, but not needing any notice if an emergency arises, or your ability to sell an occupied rental property) so the tenant is clear on it all before they even move in.
Also, make sure you include any required landlord disclosures your state or county has. You should also make sure your lease doesn’t violate any rent control laws, anti-discrimination laws, or health and safety codes.
Considering an attorney to look everything over beforehand is a great idea.
7. Keep a Written Record of Everything
Finally, the biggest thing you should have is a written record of everything. This is one of the best ways to avoid conflict with your tenants, and it keeps you protected in case anything happens.
While this might increase your workload a bit, and you’re going to need a place to store all these documents, it’s going to save you money in the long run — especially if something does happen and you get stuck with a bad tenant.
It’s also a great idea to take pictures and videos of your properties before and after tenants move in and out. Ensure they include a timestamp as well. This is going to help you make sure that no tenant can dispute or fight any necessary security deposit reductions you might come across.
Avoid Bad Tenants With These Tips
Avoiding bad tenants can be a difficult thing to do, but when you use these tips you allow yourself more of a chance to ensure you’re doing right by you and the tenants you already have living on your property.
With a little caution and a lot of preparation, avoiding a bad rental experience is going to be the easiest thing about owning and managing a property.
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