The Art of Picking a Good Tenant vs. a Bad Tenant

Today what we are going to talk about is the art of picking a good tenant vs. picking a bad tenant. A lot of people are always asking us how we get our eviction rate down to less than two percent. I can tell you that the only way we are able to do that is by having strict policies and procedures and not only having them in place but following them.

So we have learned that no. 1, we do not deviate from our plan, whatever we say we will and will not accept, that is it. We don’t go off of our gut feeling; we don’t make any special consideration for anybody. By doing that we’ve learned that we are able to stay out of any type of legal issue with Fair Housing or Discrimination Laws. It worked because we used to have a thirty percent eviction rate and now we have less than a two percent eviction rate and we’ve grown in a much larger in scale.

Some of things you want to look out for when you are dealing with looking at tenants is do they follow through in what they say they’re going to do. If they said they are going to call you back at a certain time on a certain day, do they do that? If they don’t do that now when they’re trying to be the best possible applicant, how are they going to be when they are supposed to pay their rent.

When looking at the credit, we don’t necessarily go by credit score because we want to see who do they owe and why do they owe it, meaning do they have a foreclosure on their credit because they lost a job or do they have bad credit because they skipped out on a bunch of properties and they owe to a bunch of landlords.

Also I would suggest you want to be very careful when you turn people down based on credit score. There’s a lot of information you have to send them in the denial letter when you are basing your decision on credit. So we weigh credit but we do not base our decision on credit.

Also when you look at someone’s past, we feel you are going to see their future. So if you see someone has an eviction or has promised renting in the past statistically speaking you probably are going to have problems with that person in the future and by you putting them in your property you now just inherited that problem.

You always want to make sure you’re very careful because once you sign that lease and you put them in the property, it’s a binding agreement depending on the state where you’re at. It may not be that easy to get them out of the property. So we always think of it as evicting the tenant before we put them in the property.