How to Avoid Bad Tenants in Your Rental Properties

As a landlord, it’s important to ensure you have reliable, responsible tenants — which is why it’s critical to have a robust screening process. While no screening practice can guarantee you won’t have any issues with your renters, there are certain steps you can take that help to reduce the risk of problematic tenants. Good renters are priceless because they take better care of your property so you’ll be less likely to deal with neighbor complaints and you probably won’t have to worry about the expense and hassle of processing an eviction.

Being a landlord isn’t always easy but there are ways to make your property management tasks more streamlined. Below are a few tips to ensure you’re handing over the keys to your property to people who will treat it with care.

  1. Create a strong rental agreement

A strong rental agreement doesn’t just protect you, the landlord, it also protects your tenants and informs them of their rights and responsibilities. Here are some features a comprehensive rental agreement should include:

  1. Names of everyone living at the property
    1. Listed occupancy limits
  2. Lease terms
    1. 12-month, month-to-month etc
    2. Lease end date listed
  3. Description of the property
  4. Terms of payment:
    1. Amount of rent
    2. What date rent is due by
    3. How rent should be paid
    4. List of utilities, taxes, insurance, and repairs tenant/landlord each responsible for
    5. Late fee rules and amounts
  5. Subletting information
    1. Details on terms of a subletter
  6. Deposits
    1. Follow local and state regulations and laws regarding deposit limits
    2. State how much deposit is and under what conditions tenant can get it back
    3. Pet deposit if applicable
  7. Maintenance
    1. Tenant duties regarding any maintenance requirements
    2. Landlord’s right of entry — state how much notice provided to tenants (how much notice you’re required to give tenants is often determined by state law)
  8. Quiet hours etc.
    1. State any neighborhood rules like quiet hours
  9. Landlord contact information
    1. Give your name, number, email, and contact hours
  10. Severability clause
    1. Allows the lease to remain valid even if one portion is deemed invalid
  1. Use a background check when screening for tenants

Want to avoid having to Google, “how to remove cigarette smell”, after allegedly “non-smoking” residents move out? The first step is to formally screen your tenants to check out their eviction history, criminal history, and other registries that may raise red flags.

This will help to disqualify applicants for your rental property who would be a higher risk to rent to. For example, if a prospective tenant has a poor credit score, it suggests that the renter may not be responsible with their money.

With that said, it’s important that you follow the rules and regulations of the Fair Housing Act which states you are not allowed to discriminate anyone in a protected class which includes race, religion, age, disability, and sex.

3. Avoid renters who pay in cash, but make paying rent simple

While straight cash is tempting – after all, cash is king, as they say – you will want to be very wary. Renters who offer several months of rent upfront in the form of cash is usually a bad sign because it means they expect you to stay away from the property for a few months. If you do decide to accept the risk of a cash payer, make sure to check on the property from time to time.

However, what you should do as a landlord is focus on making it easy for your renters to pay you by using an efficient online website or a convenient app. You’ll be much more likely to get rent on time if you make it possible for renters to make their rent payments online.

4. Get references from former landlords

As much as you might like to think that a renter wouldn’t give you fake renter information, double check public records when you’re calling a possible tenant’s landlord references. This will ensure you’re not renting to someone who tricked you with a fake landlord reference.

5. Choose a stable renter

In most cases, you’ll want a renter whose monthly income totals 2-3 times the monthly rent. To verify this number, ask for copies of their most recent pay stubs or tax return. In addition, follow up with their listed employer to verify the prospective renter actually works there and find out their length of employment there.

Takeaways

As a landlord, you’re juggling multiple responsibilities at all times, multiplied by the number of properties you manage. But with the right technology to help you along the way, you’ll be prepared to weed out high-risk renters and find the perfect tenant for your property.

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