Wrong tenant selection is the reason why many people who are into the business of real estate do not like rental property management. Many have been frustrated by the expensive tenant selection mistakes. Bad tenants might be owing rent for months, some of them enjoy filing lawsuits and some might even be a nuisance to other residents on the property. The problem of bad tenants goes on and on.
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Tenancy management issues can be resolved by simply following simple and practical tenant screening procedures, although selecting the best tenant can be costly, and time-consuming. But in the end, prevention is better can cure, never play with effective tenant selection procedures.
Common Red Flags in Bad Tenants
They Over-negotiate Tenancy and Always say your Rent is High
If a tenant says your rent is high, the chances are that they don’t fit the minimum income requirements of an ideal tenant for your property. This should be seen as a red flag. They have the chance to default and pay your rent late.
They Request for Payment Plan or Pay Rent bit by bit
Although some good tenants do not like to default with rents, many people who always want to pay rent bit by bit have no savings and live from paycheque to paycheque. If people in this category hit hard times, lose their job, or get hit with unfavourable circumstances, they will default on rent.
They hate their Job and Business
It is always good to create rapport with a prospective tenant to your property, try and ask a question as to how a prospective tenant feels about their current business and job. Asking the right questions about their job will allow you to establish their emotive feelings towards what they do for a living and how they do it. The more enthusiastic a tenant is, the better because it means that they are workaholics, and want to stay at that job for a longer period.
They want to Move to the New Property as Soon as Possible
Some tenants might be planning on breaking their current lease and skipping out of their current house without telling their landlord. Some might have had an ongoing dispute with their landlords and decided to trash the place and then get out. Don’t just let your tenant move in without doing the proper screening.
They Complain and Argue all the Time
Red flag tenants complain about everything on your property, they are always controversial, the landlord and the agents are bad, and nothing seems good about the services being provided by the property manager. As a landlord / or property manager, please take note of these kinds of people when you come across them.
Checklists to Consider when Screening your Tenants
Before you start welcoming every Tom, Dick, and Harry into the rental property you need to know what you’re looking for in your prospective tenant, you must create a rental criteria list. You should have a professionally drafted tenant biodata form.
Pre-screen Tenant via Telephone Interview
Put all the necessary questions in your professionally drafted tenancy biodata form, get the prospective tenant on the phone and ask them some questions to make sure you don’t waste their time and they don’t waste your time too. Your question should revolve around the basic rental requirements you wanted for your property. These are the common questions you can ask your prospective tenant;
- Their current living situation
- why do they want to change accommodation
- Their current employment and income.
- Your policies;
- Do they have pets?
- Do they smoke?
- Etc
Corroborate Their story in line with their Telephone Interview Responses
Don’t believe in everything your prospective tenant says, never take everything from them at face value, you can always learn more about them and correlate their stories by using these tools to research them;
Google – You can do a simple google search and see what comes up on the profile of the prospective tenant. Some prospective tenants may have bigger digital footprints than others.
Facebook – When profiling and learning about the social information of your prospective tenant, Facebook can be a good place to check. Search them up on Facebook by using their email or name. You can use Facebook to see a few basic details and their profile picture. They might, for example, say they don’t club, but have a picture of them smoking and clubbing ( Please note, clubbing is not a determinant of a good tenant). I am only explaining this to relate it to tenant story correlation.
LinkedIn – LinkedIn is a professional networking website platform. You can use LinkedIn to check the career history of your prospective tenant.
Get a Reference from a Previous Landlord
Please place a call through to the previous landlord, and ask these questions;
- Do you have any payment with the subject matter tenant?
- Do you have to deal with a lot of complaints and disturbances from him?
- Did the tenant explain why he/she is leaving your house?
- Would you rent to them again?
- Can you say anything about the tenant’s personality?
Final Remarks
After you have done all the due diligence, then you can conclude as per picking the most qualified tenant, It is also important to note that every property is unique and not all prospective tenants will be a good fit for certain properties.
Ensure you have all the proper legal documentation in place for your property. Always aim to look for tenants who can stay for a longer year, especially once you’ve determined they are fit for your kind of property.
Real estate is a business, run your property as a real estate business. Treat your tenants as clients/customers, and give them the best treatment. Evaluate your tenant without any prejudice, and let your tenant selection be a business decision.
Disclaimer
This is an informational article, it is written to hint to you on how to get the best tenant for your real estate investment. Never take it as professional advice, you are responsible for whatever decision you make based on this post. Always consult the right professionals if you need real estate business advice.
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Author Profile
- I am Bolaji Afolabi, a Partner at Globalclique, and a CIO @ Ibugbe and Partners - Pan African Real Estate + Technology + HR Consulting Group. Bolaji is celebrated for his expertise in seamlessly blending human capital with cutting-edge technologies, and also providing professional advisory services.
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