For a lot of people, there is a major draw to becoming a landlord and having someone else payoff your mortgage. However, perhaps the biggest fear that those same people have in becoming a landlord is that they will end up with a terrible tenant. Everyone has heard the horror stories of tenants that put their landlords through the ringer. However, much of that drama and unnecessary stress an be avoided by screening carefully and avoiding these red flags.
Your Potential Renter is Not Currently Employed
The truth is that everyone can go through a bad time or have some bad luck, but for you as a landlord this is a business and you have to protect it. A potential tenant with no job and no income is not a great candidate and is likely a headache waiting to happen. This is not meant to sound harsh, again everyone hits a bump sometime, but this is a business and a huge financial investment on your end. You need to make sure that the rent will be paid.
Your Potential Renter has a Low Income
Much like the first point, this one is pretty simple and straightforward. If your tenants do not make enough money to cover the rent there is going to be trouble. Now, there are always exceptions. Students for example might not make much money while in school, however, they can often get someone (like a parent) to co-sign the lease. Ideally you want your tenants to have an income that is anywhere from 2 to 3 times the cost of rent.
The Rental Application is Incomplete
If a potential tenant cannot be bothered, or is uncomfortable filling out the entire rental application, there is a problem. As a business owner you need to protect your investment. If someone is not willing to answer reasonable application questions, they are basically waving a big red flag in front of your face.
Another Note: Once someone has filled out an application it’s up to you to check his or her references and confirm all the information. If you find any inconsistencies you should be worried. After all, someone with nothing to hide has no reason to lie.
Your Potential Maintenance has Exceptionally High Expectations
Never underestimate the importance of your gut instinct. If someone is particularly rude or demanding right from the get go it generally does not bode well for future interactions. Remember that once you have let someone in it can be awfully tough to get rid of them, so if they give you a reason to think they won’t be good tenants, don’t do it.
The Potential Tenant has been Evicted in the Past
Hands down this is the biggest red flag there is. Getting evicted is a BIG deal. As a landlord it is an absolute last resort. Therefore, if someone else felt the need to evict this tenant you know that there must have been a darn good reason for it. This is not a red flag that you will want to ignore. When you see that they have been evicted, call the old landlord and find out what exactly happened.