Let’s face it. Handing over the keys to your client’s investment property to a complete stranger is pretty scary. They’ve entered a contract for 6 months, 1 year, maybe more with someone you just met or maybe haven’t met except on paper. Now, they, their spouse, kids, dogs and who knows what else are moving in.
Did you do everything you could to screen them? Did you talk to employers? Look at paystubs? Check references? Check their credit worthiness? Confirm they are not habitually being evicted? Search for a criminal background?
An agent representing a Landlord can get burned when they don’t do the legwork necessary to land a top-notch tenant who will pay rent on time, take care of the property and not increase the Landlord’s exposure to liability. A Property Management Company has the resources and personnel to locate and check out tenant applicants.
Here’s a couple of things you can do to protect yourself:
Have a standard, written application. Use TAR Form 2003 – Residential Lease Application. Be sure to ask questions about things your client Landlord wants to verify – Employment? How long? Salary? Current Landlord? Credit history? Smoke? Pets? In-home business?
Help your client decide upfront who will be approved and who will not be approved. Someone with a prior bankruptcy? Eviction? Criminal history – felony/misdemeanor? Review with your client what Fair Housing Laws say about age, race, sex, familial status, sexual orientation, religious affiliation? Disabilities? Service animals? Refuse to work with any Landlord that wants to discriminate on any basis that violates Fair Housing Laws.
Set boundaries that the applicant must agree to up front, in writing, and publish them with your listing – Follow HOA rules and regulations. Pet weight and number limitations. No smoking in the house. No smoking on the deck. How often to mow/water.
Property Management Companies perform background checks, credit checks, tenant history checks, and more to do everything possible to weed out bad tenants. A good property manager uses a standardized application, has published tenant selection criteria, and the experience to write an enforceable lease for the protection of the Landlord and Tenant.
Guest blog courtesy Shirley Johnson, 3G Properties.