How to screen a tenant who never had a landlord before?

Question

Hi there,

Every body knows you have to screen your new tenant.

One of the points is to check the previous landlords of the tenant.

What can you do if the tenant sold his house and wants to rent your house? Can you do any check?

What if it is a young tenant who left his eldery home? Can you call his mother??

What if the tenant is deforced and is gonna leave the house (his or her own house). How can you check the living standards of the tenant in this case?

Best Regards,

Dennis

Michele Fischer · Answer

In all these cases, I would run their credit report.  A credit report gives valuable information in addition to the actual credit score.

If they sold their house, does that address jive to the credit report?  How long does it show them living at that address?  You can also go to the county records and do an on-line parcel search to verify that they are truly home owners.  Same with the divorced applicant.  Some landlords try to have a meeting at the current residence to see the inside of the house, but we just drive by the outside if it is nearby.  If they have been homeowners they are pretty low risk to destroy the house or not pay; the bigger risk might be that they move soon (that it is a transition home rather than long term).

If they are an applicant who has never lived away from his parents, this is a high risk applicant.  They don't have experience, they likely want to move before having an established income record, and there are a lot of unknowns.  Use the credit report to verify the address history, call the parents and friends as personal references (ask questions about how responsible they are or to verify information on the application), and request additional deposit or co-signers to limit your risk.

Neil Schoepp · Answer

@Dennis Meppelink

I am really not that concerned that he is coming from a place where he doesn't have a landlord. I would screen him just like anyone else. Below are a few of the things I take into consideration during the screening process.

In this specific case I would do my best to verify his story of not having a landlord. Home sales are public records, he moved from home then where is home lets talk to mom, dad, uncle whoever? Divorced then the house will or was in his name. You should be able to get a grasp if his story shakes out or not.

A couple of other screening techniques I learned while lurking around here on BP.

If he arrives in his vehicle is it a mess or well maintained?

Does he speak appropriately and respectfully?

When he fills out his application is it neat and completely filled out?

As part of my screening I talk with his references and employer.

Find a reason to visit his house. Follow up question, drop paperwork off to him the reason doesn't really matter what comes next does. While there what is the condition of the exterior grounds? What do you see, hear and smell? When the door is open what does it smell like? Is there a mess. If you are invited in then ask yourself this. If he were to offer me a sandwich right now would I accept or is this place so gross that...... Well you get the idea.

You can only do so much and make the best decision with the information you have. Mistakes will be made we cannot be right 100% of the time, but these suggestions should give you some ideas on things to look for.

Oh yeah and always check Facebook. I have learned some very interesting things with a five minute search.

To your success.

Neil

Neil Schoepp · Answer

well I'm going to be the one. Fair housing.

You may agree with it or not. You may feel it's your property and you can do as you wish.

At least know what the law is.

A good place to start for an overview is Ultimate guide to tenant screening this will give you an overview of discrimination among plenty of other ideas and a link to the fair housing website.

You say don't give them a reason. I actually address this below (Mike Butler) but understand you can make 100% purely innocent "mistakes"

So let's play this out for a second......

You receive a phone call asking about a property you have for rent. During your conversation you ask if the caller has any children.  You then for whatever reason either legit or because it's my property and I can do what I want, decline their request to rent. They then sue for discrimination.

You have a prospective tenant who walks with a severe limp and clearly has trouble with stairs. You have three properties available one is a second floor walk up, one is a SFH with five steps leading to the front door and the last is a ranch with no stairs. Which do you show/offer him. Yep you guessed it all three.

I just want those reading this to understand that there are very real fair housing laws in the USA. Those laws are enforced and you should work with in them.

One last point. Mike butler makes a great suggestion in his book landlording on autopilot. Never deny an applicant. Speak to the applicant tell them a problem arose with their application, explain the problem and what they need to do to fix it. Then put their application on hold until they resolve the problem. What percentage of applicants actually get back to you? In the meantime move onto the next application.

I'm not a proponent of being scared. Just please understand that the laws are out there you may get hit with it or not but I like sleeping at night. Do you?

Thomas S. · Answer

The biggest fear landlords have is saying no. Too many think if they have an applicant they need solid reasons to reject fearing this applicant may be their only one. Or they are simply ill equipped personally to turn people down. The fact is a landlord does not need a reason to reject, they can say no for any reason or without one.

You look for every sign of cause, attitude, appearance, family situation, back ground, any reason at all. High risk applicants are recently separated or divorced, young single parents, welfare, first time renters, self employed, poor credit. Some will say you may not discriminate or violate fair housing. This is not true you may do as you wish to protect yourself you will simply be taking a very small risk in doing so. If you do not give a rejected applicant a reason to file a complaint you are not at risk.

Account Closed · Answer

I think co-signers are worthless.  They don't guarantee a problem-free tenant, even if they personally pay the rent every month.  There are lots of other ways tenants can be problem tenants.  I've got stories on that one lol.

Plus, they only give you someone else to sue, after you evicted the problem tenant.  And then, only if the reason you are suing has to do with money.

The baby daddy moves in, they park all crazy blocking other tenants, there are knock down drag out fights and the cops get called, they smoke cigarettes in the unit against the rules and drop cigarettes all over the carpet, resulting in burns everywhere - or a burned down apartment building, on and on.  But, hey, the co-signer probably paid their rent every month just to be sure they didn't move back home LOL.

If you take a co-signer, be sure they're also only on a month-to-month agreement, so you can kick them out for all and any other reasons.  Because odds are really good, you'll be wanting to kick them out.

People who need co-signers have lots of issues other than credit.  The credit is just an indicator of an irresponsible mess that wants to move into your building and become your problem.

Account Closed · Answer

I agree to screen like crazy.

Also, I never took tenants who only had relatives for references.  For students, if they were full-time students in good standing, I would make an exception.

That said, I avoided undergraduates like the plague.  Party craziness, lots of damage. Grad students are usually good - especially law students and engineering students.  MBA students didn't cause problems, but didn't usually stay more than a year at most.  I heard med students are also great.  Find any reason to turn away a music or theater major - drama!  noise!

I also found any legal reason possible to avoid a freshly divorced person.  These guys will move in a matter of months - if they even stay that long.  And the ex will be around having screaming arguments and drama.

And, if you do take a chance on any of these types of tenants, just do month to month rental agreements, in case they turn out to not be so cute, once they are your tenants :-)

Spencer Baptista · Answer

I prefer using a renting software site by Rentler.com which allows Landlords to run background checks with their upcoming tenants through Experian. Even if people have never rented before, they still have a credit history. Their credit history can help you make a prediction on the financial side of things if the tenants will qualify to rent your property. Rentler helps a ton to resolve this uncertainty. They also have an easy payment system to collect rent from tenants. It really helps if you have one or two rental properties or even a complex. I refer Rentler to all my clients.

I hope this was helpful.

Also Look up rentler.com/rentability

Ian Walsh · Answer

I would get a cosignor.

Bhekizwe M. · Answer

learning a lot. one needs to be astute and penetrating with their rental property

Thomas S. · Answer

I do not bother screening, I suggest they find a landlord that will accept them and if in the future they wish to reapply, after a couple of years, I will consider them. I have no reason to take any risks as long as my units are getting multiple applications. I only look for reasons to reject. There are thousands of landlords that will accept those I reject.