As a landlord, you need to know how to do proper screening and successfully screen select and a tenant. Once you are at the point that you have an application in, you want to be careful. Maybe you’ve heard a horror story or you know someone who ended up with a difficult tenant who cost them time, money, and lost rent.
This is a valid concern, and you need to be careful. Rental laws are structured in this country, and especially in California and the Bay area, so that regardless of who is right or wrong, you must follow proper legal procedures. If you don’t, you can end up with large legal bills.
Conducting a Background Check
Make sure you do a proper background check. This includes criminal, credit, employment, and rental history verification. Rental history is especially important. Don’t call the property they’re living in now. If they’re a horrible tenant, that landlord might say anything to get them out. Go back two or three landlords.
The criminal and background checks can be done by outside companies for a nominal fee. If this is your only property, it’s a big investment for you, and may be funding your retirement. So, it’s important that you take care to protect yourself. Call the references and the employers. Look for red flags.
Recognizing Red Flags in the Screening Process
One of the most common red flags may seem counter intuitive, because you want a tenant right away. If you’re like most people, your first fear is a bad tenant. Your second fear is a long vacancy. No tenant is better than a bad tenant. You want to take the two weeks of vacancy instead of putting a bad tenant in place who will later be difficult to remove. A big red flag is someone who wants to move in right away. If someone is willing to submit an application but wants to move in tomorrow, be wary.
Even if the tenant is honest and has no hidden agenda, it still shows a lack of proper planning. In California, 30 days is the minimum notice you can give or receive before ending a tenancy. So, if the prospective tenant hasn’t found a place in 28 days, there’s a real lack of planning. That doesn’t mean they’re bad people, it’s just a huge red flag we always watch out for.
Do Your Due Diligence
If applicants need to move that quickly, they could have an eviction coming down the pike, or maybe they’re getting kicked out of their last place, or they’re trying to hide something from you. There might be a previous eviction or a criminal charge, and they want the lease signed before you can do any real checking.
Before becoming a property manager, I owned several rental properties. There was one tenant who gave me a sad story about how she was relocating and needed to move in right away. It felt good to give her a break. Four months and $20,000 later, she had stolen my washer and dryer. We had to evict and have the sheriff let us into the property. We found she had cut and glued the pay stubs she gave me as income verification. Anyone can be fooled, so be careful.