Your best defense from a bad tenant IS….

Do you know the ONE thing that can be your best defense from a bad tenant? While you can prescreen, call references, order a complete background check, and verify employment, unfortunately bad renters can still slip through the cracks. Then, what?

Having an ironclad lease is truly your best defense against a lousy renter. If there is any room for interpretation within your agreement, then your tenant will give you quite a battle, and the eviction could get expensive. However, having all the rules outlined clearly in black and white will give you a stronger leg to stand on if it comes time to evict.

Make sure the restrictions as they pertain to pets, smoking, subletting etc., are made very clear, as well as the consequences for violating the terms. Also, all of your dates, deposits, and fees must be spelled out so there is no questions what your expectations will be.

Hopefully you won’t have to enforce the negative aspects of your contract, but a good landlord can never be too prepared.

Download a free sample lease and customize it for all of your rental needs.

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Can your tenant REALLY afford the rent?

How do you determine if a tenant will be able to afford to rent your home? Generally, the rule of thumb in the industry is that rent costs should not exceed 30% of the tenant’s take home pay. In theory, this gives them enough money to afford the other costs of living expenses (food, clothing, gas, creditors, electricity, etc).

 

However, a recent survey by the Rasmussen Reports for Country Financial found that more than half of all Americans spend more money than they make for several months out of the year. Also, only half of all people surveyed say they actually have a monthly budget in place.

 

This takes us back to our original question – can your tenant REALLY afford the rent?

 

 

Biggerpockets.com recently recommended that landlords screen their tenants financial records like a lender would at a bank. That means in addition to verifying income, perhaps landlords should also have tenant’s provide information such as:

·         Bank balances & other assets

·         Monthly expenses (living)

·         Liabilities – including monthly payments and time left to pay off (credit card debts, auto loans, alimony, student loans, judgments etc.)

 

By gathering all of this information, you will have a much clearer picture of your tenants financial responsibility, and be able to determine if in fact they have enough means to pay their rent on time. If you find their debt-to-income ratio is just too high (i.e. monthly debt payments exceed 36% of monthly income) then perhaps it might be a good idea to pass on the applicant at this time.

 

For this and more information about interpreting credit reports, and screening tenants please contact ATS Inc. today!

 

Since 1988, ATS Inc has been a leading provider of tenant screening services  for Landlords, Property Owners, Property Managers and Real Estate Professionals.

Do’s and Don’ts Tenant Screening

This one goes out to all of the new landlords, or those feeling hurried with the hustle and bustle of the end-of-the-year:

Do:

Call the tenant’s references listed on the rental application.

Don’t:

Email or text the tenant’s references. You need to speak to a REAL person.

DO: Pick up the phone & speak with references

Do:

Run a credit check.

Don’t:

Ask the tenant applicant for a credit score and take their word for it.

Do:

Verify employment. Check a website, make a phone call and get proof the applicant is employed where they claim to be.

Don’t:

Take “self-employed” as an answer. Request W-2’s to prove there is an actual income!

Do:

Verify identity with license or government issued form of ID.

Don’t:

Ask them about their religion, sexual preferences, or native origin. It’s none of your business and has no weight on your decision to enter into a lease according to the Fair Housing Laws of the United States.

For this and more information about tenant screening, please visit our website at http://www.atshome.com


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Advertising Rental Property Online? Read this FIRST!

If you decide to advertise your rental property on free sites, such as Craigslist, or other real estate boards, there are a few things you should do to avoid headaches that come with online advertising.

First, protect yourself against spam. Do not provide your personal or professional email address in an online ad. Instead, have the messages come to you through web host, either by method of a personal inbox on the site or a forwarding system. You could also set up a designated email address for each property listing and have it send out an “auto-reply” with information about the rental, such as pet policies and tenant screening requirements. Also, attach an application. Only after you have established a dialogue with a legitimate tenant applicant who seems genuinely interested in your rental property, should you then exchange personal contact information.

Secondly, if the site doesn’t offer pictures (or even if does), ask the tenant applicant if they are familiar with the area of your rental property. Suggest they do a drive-by of the home to see if they are still interested in it before filling out an application. This will save you the time and trouble of conducting a background check and tenant screening if the person changes their mind after seeing the place.

Lastly, always make sure to include the rental price in your online listing. The first question on a prospective tenant’s mind is cost. If you don’t want to answer fifty to a hundred emails all asking the same question, make sure to include it in your property listing.

Visit ATS Inc's homepage to find out more about our tenant screening services!

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Landlords Find Boa Constrictor in Rental

Last week, landlords in Indiana received a shock when they discovered a four-foot boa constrictor curled up in the bathroom of a recently vacated apartment. Thankfully, animal control officials were able to retrieve the snake and relocate it to a wildlife refuge area. 

Most landlords and property owners have no problem allowing tenants to live with cats or dogs in their rental unit, as long as there is full disclosure at the time of lease signing. However, perhaps not as many landlords are giving enough thought as to whether or not to allow exotic pets. Have you considered the liabilities that could come with having residents who don’t properly care for them?  For example, some exotic pets carry diseases that can transfer to humans, so do your homework before you allow anything.

Also, before you allow a tenant to keep any pet on your property, make sure it is legal. Some states have laws banning certain primates or big cats from being raised in captivity by private citizens. You should always stipulate in your lease agreement which pets are acceptable – dogs, cats, fish, snakes up to a certain size, etc. 

Don’t forget to also include a pet deposit requirement in the lease agreement. An extra $100 deposit will come in very handy if you have to call in the animal control specialists once the tenant vacates!

Visit ATS Inc's homepage to find out more about our tenant screening services!

Landlords Regret Reality TV Rentals

Recently, a New York property owner rented his Hamptons home to a reality TV show and now alleges the home was destroyed during filming. The homeowners are seeking unspecified monetary damages from the production company amid their claims the furniture, fixtures, and landscaping were all ruined by the reality tenants.

Troubled actress Lindsay Lohan also allegedly found herself in hot water with a landlord. Lohan agreed to let a Bravo network reality show redecorate the home she was renting.  The renovations reportedly cost Bravo $200,000. The actress has been rumored to have many financial issues with IRS, and now some gossip columnists claim Lohan fell behind on her rent and was evicted from the property before the makeover was completed.  Perhaps the landlord should have conducted a more thorough tenant screening of Lohan’s financial situation?

While these landlords might argue renting to a reality television show was more trouble than it’s worth, others might disagree. Some rental properties featured on hit television shows could mean big bucks for property owners. For example, the beachside home made famous by MTV’s Jersey Shore fetched between $2500-to-$4000-a-night after the show became hugely popular.  

Landlords: Would you ever rent out your property for a reality TV show? Why or why not? Comment below!

Visit ATS Inc's homepage to find out more about our tenant screening services!

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Questions to Ask When Pre-Screening Tenants

Before you hire professionals to conduct tenant screening services, you should always do a pre-screen of tenant applicants over the phone or in-person. The following are some questions you must ask during the initial screening to weed out any potential problem applicants:

1.     Make sure they can afford the rent. You need to make it clear how much the monthly rent and security deposit amount are to anyone interested in renting from you. Feel free to ask specifics about the applicant’s monthly income. As a landlord, you are within your rights to determine the minimum amount applicants must earn in order to qualify for residency consideration. A tenant who is confident in their ability to make monthly rent checks will not balk at income questions.

2.     Be clear about how what your tenant screening service provides. Any prospective tenant can lie about how much income they make and whether or not they have been convicted of a crime.  You need to make it clear during the pre-screening that all serious applicants must consent to a thorough background check that will include employment verification, past eviction searches and a credit report. You will find the applicants who haven’t been honest up front will most likely reconsider applying.

3.     Ask if they have any pets. If you are a landlord who allows pets in your rental, explain your guidelines from the beginning. Applicants should be told up-front how much extra the security deposit will be, and if you have any pet restrictions. Do you discriminate against certain dog breeds? Do you limit the number of animals per resident?

4.     Let them know how often you will be doing property inspections. Again, a tenant with nothing to hide will likely agree to whatever terms you set forth in the lease agreement. However, if the applicant had previous intentions of hiding a roommate or sneaking in pets without paying an extra deposit, they will probably be less inclined to go through with submitting a rental application.

Visit ATS Inc's homepage to find out more about our tenant screening services!

Follow ATS Inc on Twitter!