How To Avoid Renting To Nightmare Tenants     

Renting out a property can be a rewarding investment opportunity, providing a steady stream of income and a means to grow your real estate portfolio.

However, the success of your rental business hinges on one critical factor: the quality of your tenants.

While many tenants are responsible and respectful, there are a few unfortunate cases that can turn into landlord nightmares. Dealing with problematic tenants can lead to significant financial losses, unnecessary stress, and damage to your property.

To safeguard your rental ventures and maintain peace of mind, it is essential to implement a comprehensive screening process that enables you to identify potential red flags and avoid renting to nightmare tenants.

In this article, we will explore key strategies and best practices to help you navigate the rental landscape successfully, ensuring a harmonious landlord-tenant relationship and long-term profitability.

1. Check their Social Media

Once the potential tenants call you to express interest in the property, take down their name and phone number. Nine times out of ten, they have a social media that you can look at. A lot of the time you can get a good feel for the kind of person they are from their social media.

Be sure to look for posts containing profanity, memes containing profanity and/or drug references, posts complaining about a previous landlord, and pictures of a very messy room in their house. Social media includes Facebook, Instagram, and Twitter.

If their profile is private on Facebook, a lot of times you can just click the photos tab and see pictures that other people have posted of them. Every clue is valuable when selecting a tenant.

2. Get a copy of their ID, and Perform a Background Check

Always get a copy of their ID. You need to make sure they are who they say they are. Then proceed to ask their permission in writing to perform a background check.

Once received, proceed with the background check from a reputable site, which is one with good reviews. The service charge for this is usually $40-$50. This is payable by the potential tenant.

This background check should show any evictions, violent felonies, nonviolent felonies, and more. Although a background check will show a lot, it does not catch everything. In Oklahoma for example, you can also check the state court records for their name.

I have had this catch things such as protective orders and assault charges, that the background check failed to pick up. Sometimes there was an eviction suit filed, but dismissed, this could also be a red flag.

3. Perform a Credit Check

Always perform a credit check at the potential tenant’s expense, they are worth their weight in gold. They are usually $35-$50, depending on the provider.

This will provide you with information on how well they pay their debts, any bankruptcies they’ve filed, and the like. If they are past due on a lot of accounts, this is a red flag that they will also be past due or not paid on your rental property.

There is also room for grace on this, if they can explain what happened, and are honest with you about it, that counts for a lot. Maybe the issue was their ex-husband or wife was bad with money. Maybe they were uninsured and occurred a large medical bill. These are items to take into consideration.

4. Take a Glance Into the Window of Their Car

Is their car messy? This could be a good indicator of how they will treat your rental property. And this is the car they own, so one could argue they will treat your property even worse.

Are there french fry bags all over the floor, stains, clothes, and trash everywhere? You do not want your investment treated this way.

5. Verify their Income

On the application, be sure to have a spot for their income. Ideally, you want their income to be 3X what the monthly rent payment is. However, you can’t always just take their word for it. At the very minimum require four weeks’ worth of pay stubs to verify their income.

Call their employer, and talk to HR to verify that they work where they say they work. Don’t use a phone number provided by the tenant as this could be a friend, find the phone number yourself if possible on Google. If the HR team states that they don’t work there, that is a huge red flag.

While I do recommend calling an employer, I don’t bother with landlord references. Many times the previous landlord will just say what you want to hear to get you off the phone or to get rid of a bad tenant. I have learned these calls are not worth the time.

6. Meet Them at Their Current Residence to Fill Out the Application

This will show you how they treat their current property, most likely a rental. If it smells bad, is very messy, has stains on the floor, or has dog or cat odors, then this is a sign that they will not be a good tenant at your property. Take a special look at the bathroom, and the kitchen, as these cannot be picked up as quickly.

A yard that is not mowed, and trees not trimmed, are also not the best signs.

Don’t give the potential tenant too much notice that you will be by, twenty-four hours at the most. You could text them and say that you are in the area and could stop by right then. While there, ask to use the restroom.

7. Trust Your Gut            

I would argue that this is the most important item on the list. I have found that even when everything looks great on paper, it is still best to trust your gut. If your BS meter feels high, then a lot of times that has proven for me to be correct.

The Purpose of All This

The purpose of finding a tenant is not to see how fast you can get your home filled. The purpose is to find a respectable tenant who will pay on time and treat your property like their own.

Going too fast, or not going through the proper steps could ultimately cost you way more time in the long run than doing your due diligence at the beginning.

If you don’t feel comfortable doing all of this yourself, hire a property manager such as this one. They will have their ducks in a row on finding a tenant within the framework of your local laws.

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