Renting to complete strangers is a very risky proposition; however, when you are having a huge property, you cannot limit your tenant prospects to known contacts, friends, and family. It is therefore very important in property management to know how to find the right tenants. Here are certain strategies to weed out the bad ones.
One of the most important duties of the property manager is to conduct a thorough background check on all prospective clients even when other information seems to be in order. According to a recent psychological study, it was found that most people lie about their background and try to hide things. Start with investigating criminal history of the prospective tenant.
Even though breaking the traffic rules is a crime, the property manager has to be concerned about serious crimes. These include drug dealing, robbery, and list of violent crimes. It is also very important to see if the name of the person is listed in the sexual predator or sexual offender lists. It is also possible to find out many things about people by checking their online presence on social networking sites.
Checking rental history of the prospect from past property owners is important; however, this will not always be an accurate pointer. Some property owners or managers have been known to provide a false positive report, simply to get rid of a tenant who has been defaulting on rent payments. Secondly, first-time tenants like students or people from other cities will not have any rental history, and therefore it is best to check their financial background and creditworthiness.
Credit History and Financial Background
Even though it is not easy to maintain a perfect credit history in these hard economic times, property managers should set clear parameters for checking creditworthiness of a person. Ask for credit reports and credit scores, since these are fantastic indicators about the finances of a person. Finances can also be gauged by checking employment history and seeing whether the person holds a bank account. Checking with the individual’s current employer can reveal financial aspects about the person. Tax returns from previous years will also provide useful information about the financial background of the person.
A cleverly designed questionnaire can reveal many interesting things about a person and it is possible to see if the person is lying. If the prospective tenant leaves certain questions unanswered, it should definitely sound the warning bell in those aspects. Here are some important questions that should be included in the questionnaire:
§ Do you have a good credit score?
§ Where are you employed?
§ Do you have a rental history?
§ Do you have pets?
§ Have you ever been arrested?
§ How many individuals are going to live on the property?
§ Are they family members?
§ Are you willing to sign a lease?
§ Do you have a bank account?
§ When are you planning to move in?
§ Do you have any disabilities?
§ Have you ever been evicted from a building?
If the prospective tenant does not know how to answer one or some of these questions or if you receive a form back that has one or many of these questions unanswered, that often is a warning sign. If they refuse to answer some of these questions, a red siren should be going off in your head. Silence does not personify honesty in this case.