One of the common public misconceptions of income producing properties is that tenants are always going to trash the place and you are going to have to count on spending thousands of dollars every time someone moves out to get your unit back into shape. We at Home & Condo Rentals have seen too many instances of first time investment homeowners relying on intuition and a handshake to make decisions on who they accept as tenants. No one wishes this were still an acceptable way of doing business more than us as we still believe someone’s word is their bond, but the unfortunate reality of this approach is that there are too many people that know exactly how to play the system these days and while you might be ok nine times out of ten, it only takes that one time to put a sour taste in your mouth. While nothing is a guarantee in life, there are some things that every investment property owner should do prior to renting their home that will give them the best protection possible from encountering these types of circumstances.
Conducting a thorough credit/background check prior to accepting an applicant is one of the single most important things a landlord can do. If the applicant generally pays all their bills on time and doesn’t have any accounts that have gone past 60-90 days delinquent, it is generally a good indication that they are financially responsible and will pay their rent on time. When doing the background check, it is important that one looks at the type and seriousness of any offenses the potential applicant may have. Any convictions related to burglary, larceny, theft and so on, have a direct effect on the property and should be cause for one to take pause.
Evictions check: Checking for prior evictions is another thing that is important for a landlord to do. If someone has had an eviction in the past, it would once again be a good reason to take pause and investigate with the applicant to find out what the circumstances were.
Following up with prior landlords can give insight into whether the applicant paid their rent on time and if they were a desirable tenant. Most rental owners do not report to credit bureaus so things like late rent payments will not be reflected on a credit check. This is why it is important to call current and prior landlords to collect information on the tenant that is not reflected in those checks. When calling a prior landlord, there are only a few questions that can be answered (ie: did the tenant pay their rent on time and would the current landlord re-rent to them). If the current landlord indicates they had regular late payments, further investigation with the applicant is warranted. If the current landlord indicates they would not re-rent to them, one would have a strong case for denial of the application.
Listening is one of the strongest tools a landlord has. At the end of everything, the most important thing a landlord can do on top of all their checks is ask open ended questions, shut their mouth and listen. It is amazing how often people will contradict themselves and essentially talk themselves out of a deal if you simply listen long enough.
It is important to remember that nothing in life is a guarantee and just like any investment, there is risk involved with becoming an investment property owner. Doing a thorough credit/background check sets up your success for the future and gives you the best chance of success with your new tenants. These are all essential things that we do here at Home & Condo and have found overwhelming success with.
Thank you for taking the time to read our blog. This is the fifth in a series that we hope will help educate both owners and tenants in the Venice, Nokomis, Osprey, North Port and Englewood area. Once again, if there is ever a question that anyone has, please do not hesitate to call us.
Thanks and have a wonderful day!!
The Home & Condo Staff