Ironically, I am writing this just a couple of weeks after having problems with a rooming house tenant who seemed to have a split personality. My screening of the rooming tenants usually involves nothing more than a phone conversation, which is not ideal, but simply how that type of rental works.
A regular rental property with longer term tenants is an entirely different beast though. So here are some of my thoughts on screening tenants.
Screening Tenants
As a landlord and a property investor, this question haunts me. When I initially became involved with rental property one of the biggest points that was driven home to me was how important it is to screen potential tenants. Yet, I continually hear stories from other landlords about their problem tenants and how they never completed any screening or reference checking.
Really, what were you thinking? You trust a stranger with a $300,000 asset (or more) and you cannot be bothered to spend an hour calling references and former landlords? Shame on you!
I can understand the rationale of going with your gut feeling about a prospective tenant, but would it hurt to at least call the former landlords, to see if they are leaving on their own, or perhaps were asked to leave? Maybe even, check with their employer to see if they still actually work there? Simple calls like these can make all the difference between having quality longer term tenants of instead finding problem shorter term tenants.
There can be a significant amount of pressure when you own a vacant property, but from personal experience and tales from other landlords taking shortcuts, especially in the screening process, usually backfires. The ugly realization that the mortgage payment is coming up and the property is still vacant seems to be the biggest trigger for these poor decisions. And it makes sense if you have a short term view of the property.
It’s when you realize an eviction could potentially cost a landlord a month’s rent, hours of lost time and often mind numbing frustrations, that you start to understand the real fallout from skipping those screening calls. This is why, if you are a landlord, you simply have to screen.
So hopefully I have impressed the importance of making those calls to you, but how do you make sure you follow up. The starting point is to have a very thorough application form with plenty of spaces for former landlords contact info, employer’s contact info and other references. Our particular form also has a special section they need to sign allowing us to do a credit check on the individuals as well. We do this through a service called RentCheck.
The next important step is to have a checklist you can follow along to ensure you don’t miss any steps. Steps like a) check credit on applicant b) call former landlord(s) and c) verify employment. We use this as our basis for screening potential tenants and include a standard set of questions we always ask the references. Perhaps my favourite of these is “If you were a landlord, would you rent to them?”
Other typical questions would be asking whether they paid on time to the landlord, whether any issues came up in the past and whether the dates and lengths of the previous stay were accurate. For employment references, it’s always important to confirm whether their long term job prospects are good. It might not bode well for future rent payments if their employer is closing up or they are about to be laid off.
As I often have to remind new landlords, owning rental property is a business and you have to treat it as such. So make sure you implement systems that work and that you stick to and your investment should treat you well over time.
Love all your posts–especially on screening tenants! Seems we’ve ‘scared’ off a few prospective ones recently with our ‘pre-screening questionnaire’ and requests for credit checks, but it’s just as well…
Thanks Debb,
It’s great to hear the screening questions are working! It just goes to show how important it can be to weed out potential problems early rather than having to deal with it later.
Bill
It’s simply amazing to us that a landlord would let a tenant into their property without doing any screening, yet it seems to happen very day!
To help other landlords out we’ve put together a pretty thorough video that walks landlords through how to screen tenants. You can find it here, How to Screen Tenants
Enjoy,
The Educated Landlord
http://www.TheEducatedLandlord.com
Being a landlord and dealing with a terrible tenant is very frustrating. We have a house in Edmonton where the tenant was given a 6-month lease (thanks Bill for that hint rather than having them on a month-to-month tenancy and having to jump through the hoops of a very long eviction process – at least 3 months notice required, and very stringent rules as to why you can evict). The lease ended on June 30, 2012 (unfortunately it was a Saturday of a long weekend). The tenants refuse to leave – we verbally told them on June 1 that we were not prepared to renew their lease. Today we filed with the RTDRS to evict the overholding tenant, but the earliest hearing date is July 17. We thought we had the bases covered when we checked references on their application to rent, but it appears they lied about current and previous landlord, employers, etc. and gave us telephone numbers of their friends, who, of course, gave glowing references. Next time I will attempt to visit their current rental address and if it is a case of a basement suite and main floor suite, ask the other tenant for the name of the landlord. Bill was of tremendous assistance when I called him this morning asking for advice – as always he is very patient and gives you the benefit of his years of experience being a landlord. Thank you Bill for invaluable information and your willingness to assist in any way you can.
Thanks Marilyn,
Glad I could help. If you find yourself having problems screening tenants, I recommend you watch the screening video over at the Educated Landlord. You can find it here, How To Screen Tenants.
Regards,
Bill