The biggest mistake a landlord can make is not properly screening the tenant. This mistake can be very expensive, so it’s important to get the screening process right.
At Lorac, when we get an application, we immediately screen for credit through all three credit bureaus. We do a criminal background check as well, which is sometimes even more important than the credit report. We also go to what we call the Rent Bureau, which tells us if there is any pending litigation against the tenant in the 52 states and territories. You have to remember that if they didn’t pay the last landlord, they’re not going to pay you either, no matter what kind of story they try to tell you.
Our application is four pages long and very thorough. Applicants need to provide their social security number, their email addresses, previous addresses of the places they have lived and three references who are not related to them. Most importantly, we require information for prior landlords. This is critical, and the applicant’s former landlords are the most important people you’ll be dealing with during the screening process.
When we send out a verification to previous landlords, we will ask if rent was always paid on time, or if the tenant had ever been late on rent. We ask how many times the tenant was late. We ask if the tenant ever paid with a check that was returned for insufficient funds. It’s important to ask the landlords if they would ever rent to the tenant again and what kind of condition the property was kept in during the tenancy. Landlords are usually very accurate in their information. If they had a good experience with the tenant, they’ll say they were sorry to lose that tenant. If not, they will be very honest about why it wasn’t a good tenant experience.
To avoid costly mistakes as a landlord, you need a great property and a great tenant. You can have the best property on the market, but if you don’t screen properly, you won’t get a good tenant. That will cost you a lot of money.
If you have any questions about how to avoid this mistake, or you’d like more information on how we perform our tenant screening, please contact us at Lorac Realty and Property Management.