You’re a landlord—maybe even a landowner. You’re living the American dream. A passive income on the horizon promises a brighter future, one filled with cash and not stress, minimal work (minimal tenant screening) and maximum return. It seems simple enough. Buy a property, rent it out, and let the money pour in. Well, we’re sorry to tell you but it’s never that simple, and being a landowner can actually be worse than your current full-time job.
Maybe you wake up to a three am phone call demanding you unclog the toilet. Maybe you spend over five thousand dollars to evict a particularly testy tenant, only to gain entry and find an apartment devastated by meth lab remnants, crusty and unruly squatters, and rampant rodents scurrying across cracked floorboards.
Exhaustive tenant screening is incredibly important. However, it’s difficult to know who’s right and who’s wrong. It’s tough to gauge who will leave you breaking down your own door, and who will guarantee you unrivaled peace of mind and stable prosperity with no strings attached.
That’s why we at Tenant Evaluation (with over four decades of combined experience) put together the three steps every landlord should take to ensure they are never forced to deal with raucous renters, shrill squatters, or lewd lessees. Take note and take care, or ignore at your own risk:
Although following the law may seem obvious, it’s difficult to do if you’re unaware it exists in the first place. Many, too many, first time landlords full of gusto and naiveté purchase a property intent on raking in cash and filling their vacancy, but if their tenant screening process falls outside the confines of the law, they could (and very likely will) be subject to a $16,000 fine for first-time offenders. That’s putting you in the red before you see any green, and for those without stacks of money in the bank, the endeavor could be over before it even begins.
Do your homework. Check out the Fair Housing Act. Read up on what you need to know before Uncle Sam makes an unexpected—and unwelcome—appearance in your mailbox. If that’s not enough, here’s a link to Fair Housing charges dating back to 2004. See for yourself the ramifications of what is generally just simple ignorance.
Not just a background check. We’re saying definitely check out credit, criminal and eviction histories, yes, but also sex offender history, lien searches, suit searches, bank verifications, character verifications, landlord verifications. Don’t forget the terrorist watch list and Interpol’s most wanted list. Not to mention, you should search all of these things both nationally and internationally.
Many tenants have a less than ideal international renting history that slips under the radar of unsuspecting domestic landlords. Don’t be a victim of careless searching and poor tenant screening.
Again, it may seem apparent, but it’s harder than it looks. Credit reports are difficult to understand beyond a superficial level, and many of us quit when tenants explain their seemingly understandable reason for a lackluster score. Rental histories can be extensive, especially if they’re exhaustive, and although one can see why current landlords don’t want to reach out to previous landlords for verification, that doesn’t make it okay not to do so.
You need to both collect and understand the appropriate information. You’re entrusting this tenant with your future, and it can either be a step on the way to your dreams of wealth and security, or a detrimental blow to all you’ve accomplished thus far. It simply isn’t worth it to save a few hours and not check. Your time is valuable, but your real estate is more so.
Tenant Evaluation understands this and provides all of the above services (plus more) securely and at no cost to you—seriously. It’s actually free for all landlords and real estate brokers. For more information on tenant screening, tenant management, and the impending tenant revolution, check out our website. We know you know that’s free.