Selecting Good Tenants - Rule 1
Step one is defining a "Good Tenant". My definition is someone who pays on time, doesn't damage the property and doesn't aggravate the neighbors with the importance in the same order. For example, you might get a tenant that gets along well with the neighbors and takes fabulous care of the property, but won't pay the rent. What's the point? Remember that we are doing this for an investment. If I've got 10 minutes to decide and only have time to check one thing, I would do a credit check. (I would never get into this situation, it is to highlight the most important check!) I belong to an organization called Tenant Data which you can learn more about at www.tenantdata.com. A credit check tells a lot about a person. I consider a blank report a good thing. I don't exclude people that had bad credit 3 years ago with a squeaky clean credit since. I'm sorry if their X spouse ran up all the bills before the divorce. I'm sorry if they screwed all their friends and family and have no place to live. Facing homelessness might be the incentive they need to reconcile with family and friends. I'm here to help family and friends mend fences! All joking aside, imagine how bad they are going to treat you when they treat loved ones so bad they won't help. I never call anybody a liar when they are lying to me although I may confirm the story in writing just in case I need it later. If it is a roommate situation, I make sure the roommates with good credit can afford the property on their own and I'll ask them how long they all have known each other and if they have lived with each other before. The information on the credit report is confidential so I don't tell one roommate if the other has bad credit, but I assume they know if they have known each other for a long time. I get nervous if a tenants own parents won't co-sign. Another benefit of Tenant Data is they provide Adverse Action Letters with the correct and legal text that provides a space to tell the tenant why they were rejected. I provide minimal detail because the applicant knows the details and I assume prefers not to be reminded of everything. If it was because of a bad credit report, they can view the details at Tenant Data or preferably the actual credit reporting agency. The bottom line is Tenant Data helps us select good tenants and is quick, easy and almost always accessible. This is getting lengthy so I'll stop here tonight and provide more information in the near future. My next post will probably talk about what I consider property damage.