As a property manager or landlord, you will routinely have to perform background checks for potential tenants. What are the red flags you want to be looking for?
How do you know whether or not the potential tenant has to funds necessary for your rental property? First, you should research the average housing costs for that particular area first. It is recommended that a tenant only spends up to one-third of their total income on rent per month, however, research shows that more and more Americans are spending upwards of half of their income on rent.
Long Employment Gaps
Life happens and sometimes when you see a tenant with long gaps between employment, there is a valid reason. However, often times gaps in employment are a big red flag. It shows that the tenant is not good at maintaining employment. If someone can’t maintain a job, they can’t pay rent. Before dismissing someone right away because of this, ask them why. They could have a very valid explanation (sickness, moving, etc.) If they dodge your questions or can’t provide a good reason, you may want to seek out a new tenant.
Ready to Move in Immediately
According to Green Residential, depending on the situation, a tenant who is seeking a very quick move in can signal a red flag. Why? It can signal a lost job, unexpected move, or eviction from their current property. Unless the prospective tenant can prove that they have a reasonable explanation for wanting to move in quickly (e.g., their house burnt down), consider this a red flag. If a potential tenant is looking to move in immediately, ask them specific questions to understand the “why” behind their situation.
Several Convictions in Recent Years
If the applicants have more than 3 convictions for anything other than traffic violations, it is an indication that they cannot obey rules. If they can’t obey the law, what would entice them to follow the rules of the lease? Of course, you want to give people a chance if they are trying to improve their lives but several convictions in recent years is not a good sign for a potential tenant. Use your discretion when it comes to the charges, but be wary of choosing a tenant with multiple recent convictions.
Choosing a tenant is not something to be done lightly. This is the person who will be occupying your property. One of the best ways to weed out to the wrong tenant is by asking the questions above.