The best thing a landlord or property owner can do is find quality tenants. Property management is difficult, and tenants who stick around for a while can boost your profits and reduce unnecessary spending. The cost of keeping a good tenant is much lower than the cost of losing one. Consider all of the advertising, renovating, and additional costs you have to incur when a tenant moves out just to find someone to fill the vacancy. While initially finding good tenants is more difficult than finding lower quality tenants, it’s worth it.
Bad tenants can upset your other renters by being bad neighbors, cost you money by destroying your property, and make you lose out on better tenants because they lied on their application. To help you steer clear of these common landlord headaches, here are tenant red flags to watch out for.
Unemployment or Low Income
Income should be one of the first things you look at on a submitted application. It can tell you the exact information you need to know about your potential tenant’s ability to pay rent on time each month. If your prospective tenant is currently unemployed, they may not be able to get a job, which can affect their ability to pay. Similarly, a tenant may have a low income that makes them high risk for late or unpaid rent.
If you use the three-times rent rule, where you look at income to ensure that a potential tenant makes three times the rent in income, you’ll likely know immediately if your potential tenant can afford rent. However, you may need to do a little math. After all, their income is not their net income, so you may need to calculate their income tax to determine whether it really is enough for them to pay rent on time.
Make sure to verify income by getting pay stubs or bank statements from the applicant so that you can ensure their ability to repay. You can save yourself time and energy by requesting that applicants calculate whether or not they can afford rent before submitting an application.
Lied on Application
The easiest way to determine if an applicant lied on their application is to verify all of their reported information. You’ll already be verifying their income with pay stubs or bank statements, but you should also verify their employment. For all you know, your applicant became unemployed the week before they applied for the rental.
One thing your application might ask for is previous addresses and job history. Your tenant may have lied about those as well, although the implications are less severe since they don’t affect their immediate ability to pay their rent. Even so, if you find any discrepancies on the application, you can bet that they will continue to lie to you throughout the life of their lease, which can cause problems among other tenants or put your property in a bad situation.
Poor Credit Score
Like income, credit score also reflects a rental applicant’s ability to pay. Because a credit score reflects debt and payments of that debt, you can determine whether or not your prospective tenant is financially responsible.
It’s important that they are because you need to know that they won’t skip out on their rent. A low credit score can mean that they don’t like paying off their debts and will likely stop paying their rent at some point. While it doesn’t always mean that a tenant is going to stop paying their rent, leading to their eviction, it’s better not to take the chance in the first place.
While your prospective tenants might not all know what their exact credit score is, you can find out with a rental credit report so that you can determine whether or not you want this applicant as your tenant.
Your application may ask if a prospective tenant has ever been evicted. If they answered truthfully that they had been evicted, they might offer you an explanation that takes away all of our doubts. However, suppose your tenant lied on their application, and you call their previous residence to find out that they were evicted. In that case, the tenant no longer has the opportunity to defend themselves. Past evictions are a major red flag and should be taken into consideration when choosing tenants for your rental property.
Arrives Late to Showing
When someone schedules a showing, it’s safe to assume that they are interested in the apartment. However, if someone arrives late, this could be a red flag. If they don’t call ahead of time and let you know that they will be running late, this could demonstrate to you that they could be someone that can’t be relied on, which is just one trait of a bad tenant. While you should always give people the benefit of the doubt, being late should be something to watch out for.
Don’t get stuck with unreliable, problematic tenants Take the extra steps to vet prospective renters before offering them the unit, your future self will be happy that you did.