Your success as a landlord is only as good as your tenants are. You can spend months finding a property and another few months fixing it up, but all that work will quickly go down the drain if your tenant does not pay. Instead of rushing in the first halfway decent application that comes your way, you need to spend the time and get the best tenants possible – even if it means waiting a few extra weeks. Some may view this as an unnecessary waste of time and possibly money, but this could be the best thing you do for your rental property.
If you are not following up on a tenant application, you are basically keeping your fingers crossed and hoping they pay every month. Think of renting to someone the same as you would hire someone for a job. You certainly wouldn’t take what they have on their resume as gospel without doing a background check and making a few phone calls. If you are lazy with this process, you subject yourself to renting to a tenant that might not even have a job or came from a recent eviction situation. A little research could reduce the turnover rate. All it takes is a few clicks of a mouse or a few minutes on the phone. In fact, if you don’t want to do this yourself, you can find many companies who will handle this task for you.
Depending on the size of your rental portfolio, it may make sense to enlist the services of a large company that will screen any prospective renters you have on site. Even if you want to do a one-time background check and screening, you can find this as a cost. If you want, you can pass this cost along to your renters in the way of an application fee that may be deducted from the first month’s rent if everything checks out. However you want to do it, you need to do something to protect your investment. It is not being paranoid not to believe everything that is on an application. Just by suggesting a background check and a fee you can weed out whoever is serious and who has something to hide.
Many landlords and property owners have heard horror stories about evictions but don’t believe it will happen to them. No background check will ever guarantee a perfect tenant but your chances are much less likely if you do your homework. An eviction can set you back months and will tie capital up for however long the eviction process takes. If you do fall victim to a bad tenant you will look back at your application process and kick yourself that you did not do more. For the $40 and less than twenty minutes placing calls to previous landlords and employers you can do everything you can to know that you have the best possible tenant.
You can either do a little bit of work before a tenant moves in or have to deal with the consequences for the remainder of the lease. With all of the other work you do to secure the property you need to spend the time to keep your rental investment running smoothly. A little renter due diligence can make all the difference.
