Do These Things Before You Give out the Keys to Your Vacant Apartment
Don't "Rush to Rent" Your Apartment
If you are a landlord or property manager, pre-screening a rental applicant is mandatory. The more you pre-screen a rental applicant's history as a tenant, the lower the risk of making a poor choice of tenant. If all you want is to fill your vacant apartment and get the first month's rent in the bank, any process will suffice.
You want to have a tenant that will be able to stay a long time, respect your property, respect the neighbors, and pay the rent on time every month. Something more than a money order for the first month’s rent and security deposit, three pay stubs and a letter from the current landlord is required. You also want to know how the tenant treated previous occupancies.
You want to not only have a good tenant in your home or building. You want to be repaid for all the money you have invested into fixing up your vacant apartment. The longer your tenant stays and pays the rent every month, the sooner you will recover your investment. The cost of painting, making repairs, and verifying all of the applicant’s information is tax-deductible as a property expense. The investment is repaid by the positive, long-term occupancy of the apartment.
There is a real financial cost when you cut corners by not taking the time to confirm the rental applicant's information. You cannot be certain of any potential renter when you don't spend the money to do a credit and landlord check. A landlord should never give out the keys to the building with only minimum confirmation that the person or family will pay the rent and be responsible. Handing over the keys after a lease is signed, just to get the vacancy filled could cost you future legal fees, extensive repairs to the apartment as well as the building. It could even sully the reputation of your building and yourself as a landlord.
Why do you need to know so much about a rental applicant? Why spend from $75 to $150 per person checking so much background information? After all, you don’t want to become a private detective just to fill a vacant apartment. And, after having an apartment vacant for even a month, verification costs may be a struggle to pay for information. So, why do you want to verify every piece of information given to you by your rental applicant? Information will take some time to gather. Time you may feel you cannot afford to give toward the process.
Let’s look at an example situation. Let's assume you rented out your two bedroom vacant apartment recently without the benefit of a credit check, previous landlord or other verification checks. You showed the apartment, and relied on the tenant's information to you. Every piece of information you received about the tenant was verbal. Maybe you rented the unit to that particular person because one of your good friends recommended her.
Well, the tenant has been in the apartment for about three months, and has not paid the rent for last month or the current month. The tenant tells you she has lost her job since moving in, and could only afford to pay the first month's rent and security deposit. You now have to go through the legal process to get her out. Something that should have been started at least before the end of month one, but you waited.
When the constable is sent to serve the eviction notice, he reports to you that he counted seven people living in the apartment. Also, the apartment is a wreck. Now you have to evict more people than you thought, and anticipate that your re-renting expenses will be extremely high. In addition, you will incur costs to take the tenant to court, and move the tenant out. If your property is in a state like Massachusetts, you will also have to pay to put the tenant's belongings in storage for three months.
Don’t be in such a “Rush to Rent” the apartment so much that you fail to qualify your rental applicants. A friend can't confirm another friend's rent paying habits or overall tenancy behaviors. What you need to know as a landlord goes farther into an applicant's history than a friendship, even if the applicant is your own friend.
Verify everything that is put in writing by a third party, not the candidate. As a landlord, you must make good business decisions based on verified and confirmed facts. You cannot rely on verbal information. You cannot cut corners because the interviewee says he plans to pay you four months rent in advance. It could be the only rent you’ll get. Spend the tax-deductible money and take the time to confirm what is written on the rental application. Ask a lot of questions. It’s the responsible thing to do for the benefit of your property and/or for your other tenants.
Do you get a credit report for every rental applicant?
Do you do a landlord check?
This content is accurate and true to the best of the author’s knowledge and is not meant to substitute for formal and individualized advice from a qualified professional.
© 2011 Carolyn Gibson