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 10 Steps to Becoming a Good Landlord: Choosing Tenants (Part 2)
By: Darin "Sid" Cameron, CRS
Wed, Nov 29th, 2006 9:57 am

Yesterday we started our discussion on being a good landlord by looking at how you should Choose Your Tenants- which is your most important duty.

We discussed discrimination issues to avoid, and the mistake many new landlords make by rushing the process to get a tenant.  Then we reviewed the importance of a Rental Application.

The next step is once you have a complete application from a tenant you should perform a thorough background check of each applicant.

Many landlords will pay (or charge the applicant) for a third party screening company to run a credit and/or criminal check. The $20 you spend to find out an applicant has excessive credit card debt and a history of not paying their bills is a bargain compared to having your property tied up for months with unpaid rent while you try to evict them.

If you’re going to purchase these services, don’t make them a secret.  First, you may be legally required to get signed permission prior to performing a background check.  But more important, bad tenants frequently KNOW they’re bad tenants!  If you make it clear to them up front at the time you give them a Rental Application that there will be stringent background checks and any past record of not paying bills on time will disqualify them from renting, you might find that a percentage of applicants don’t return the Rental Application.  Don’t make the mistake of thinking of this as “scaring away potential renters,” instead look at it as having saved the time and money of proceeding with the process!

You should also take the time to call the applicant's employer to verify employment and contact the landlord of the applicant's current or previous residence. Don’t be lazy; these are valuable and important phone call to make that can save you months of headaches down the road.  Also realize a glowing review from the applicant’s current landlord can simply be them “trying to pass off their problems” which is why it’s important to go beyond just their current residence.

Another great piece of advice from successful landlords is to not just rely on lawn signs, newspapers or Craigslist ads to find all your tenants. Instead, when you have a property for rent, first contact your friends, family and other current tenants to see if they have someone they recommend.  This doesn’t mean skip your regular screen process, either.  It just gives you another reference point in the battle to find a quality tenant.  Some landlords will even offer current tenants an incentive for recommending strong prospects.

When you do use advertising to find a tenant, make sure to give accurate description and explanation of what you’re looking for- including your monthly rental amount, up front deposits you require, any restrictions you have (pets, smoking, occupancy restrictions, etc) and then provide an accurate description of the property (and if advertising online, include photos).  This is important because it’s all a part of the screening process.  If you don’t want your time wasted by applications that aren’t serious, the best way to avoid them is to make sure they know what your requirements are up front before they call.

Going back to the start of this section, I said you shouldn’t rush this process.  Remember, if an applicant thinks you’re in a rush (or desperate) to get the unit rented, they might also think you’re willing to bend the rules for them. Make sure all applicants know that they will receive full consideration, but bottom line, you will only select a tenant that meets your requirements.

[ Next Article: 10 Steps to Becoming a Good Landlord: Occupancy and Rent ]
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Darin "Sid" Cameron spent 15 years working in the technology industry which in 1998 relocated him to St. Louis. In 2004 he took over web development tasks for Kimberly's real estate team and later became the full-time Marketing and Operations Director in 2005. In 2011 Sid launched two brokerages, The Realty Store, Inc. and Realty Referral Partners, Inc, while continuing to perform marketing and operations for Kimberly's team. Sid holds a real estate broker's license in Missouri, CRS certification and was the first CyberStar in the St. Louis area.
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