There are people out there who will not pay your rent, no matter what. Make sure you don’t rent to them.
Our main screening method is to get a credit summary. This has worked very well for us. That’s because you can see if the prospective tenant is paying her bills. If she pays others, she will pay you. If she doesn’t pay others, she will not pay you. Don’t make it any more complicated.
We visited a banker recently who asked us why we weren’t having all the problems other landlords he knew were having- especially during this recession.
We told him we screen prospective tenants based on the credit summary. Isn’t that what he does? Isn’t that what any one in business does? Why was he so surprised?
Case in point: A few months ago, I mentioned a man who looked at one of our condos. I “interviewed” him for about 20 minutes during which time he demanded a washer and dryer and wanted me to come down on the rent.
“You can’t give me a washer and dryer?” he asked. “I’ve been talking to another landlord with another unit in this building and she has one.”
My reaction? He’s trouble.
Why? He couldn’t seem to tell me where he worked or what he actually did for a living.
He asked for an application. I was not surprised when he didn’t fill it out. “Could I take this with me?”
“Sure,” I told him knowing full well I would never see him again.
Well, about five minutes later a perky real estate agent in a Mercedes showed up to show him the “other unit”.
We all ran into to each other on the sidewalk.
“What do you know?” the guy said laughing,” both landlords meeting.”
He seemed to think it was all pretty amusing.
I had two reactions. The good part of me wanted to warn her. Nope. She’s a big girl. She can take care of herself.
Fast forward a few months.
I just happened to pass by the door of the unit he rented. There’s now a sheriff’s summons sticking out of the screen.
Moral of the story: Get a screening system and stick to it. Make sure what you are doing is legal for your area, but find out where the tenant works, what kind of income he has coming in, and if he actually pays his bills.
People who are responsible make very good tenants. They will pay you on time and they won’t tear up your properties.