Landlords take a risk every time they rent to a new tenant. While the payoff in terms of income can be very rewarding if all goes well, there is always the possibility of having tenant disasters where things go very wrong. How can landlords avoid tenant disasters?
The following is an overview of five of the top tenant disasters that a resident can bring – along with tips on how to avoid these scenarios.
1. The Tenant Gets Behind On Rent Payments
This is a major worry for all landlords. The main reason for renting out property is to make income from it. When a tenant doesn’t pay, the landlord loses money each month. Whether the tenant is chronically late with the rent or goes into default, the net effect is a nightmare tenant. The best way to avoid renting to a tenant who is a financial disaster is to use professional background screening for credit checks and get a sense of their history. Current income should be verified and a late fee enforced on all late rent payments.
2. The Property is Extensively Damaged
This is perhaps the biggest fear of landlords regarding entrusting their properties to strangers. There is no guarantee that a tenant will be respectful of the property. However, landlords can look into the history and track record of potential renters. Calling previous landlords and checking eviction records can yield valuable insights about their potential future behavior.
3. The Property is Left Filthy
Tenants who do not keep the unit clean during their stay and do not clean it after they empty it of their belongings create another nightmare scenario for landlords. It is disappointing to see a property in total disarray. However, these tenant disasters can be remedied with a professional cleaning service. Collecting an adequate security deposit will help to cover any necessary cleaning costs.
4. A Tenant Commits a Crime
Renting to dishonest or violent people will most likely result in tenant disasters. Whether the crime is a domestic incident, illegal activity or violence against another tenant in the building, a crime will bring unwanted energy to the rental property. It can also raise landlord risks and liabilities. Tenant screening of all potential renters can help to identify those with a criminal history so that landlords can determine if an individual is prone to undesirable behavior.
5. A Property Remains Vacant For Months
Vacancies are another way that landlords can lose a substantial amount of income. Having a tenant break a lease is one way this can occur. Including a penalty within the lease such as loss of the security deposit can discourage broken leases. On a one-year lease, landlords should require one to two months advance notice from tenants who will be moving out. This will allow time for advertising the property and screening new tenants so that the vacancy can be filled efficiently.
Having rental properties always involves a degree of risk. Landlords can never be sure how a tenant will treat their property and lease terms. However, professional tenant screening can eliminate a lot of the guesswork. Landlords should strongly consider screening each and every candidate to help them avoid these and other tenant disasters.