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 Tenant Screening

    One of the most important things a Landlord can do to preserve the property value is to carefully screen new tenants.  While you can't do much about the tenants you "inherited" from the previous Landlord, you can make sure that any new tenants are the best tenants for your building.  Just like job applicants, tenants are on their best behavior when meeting a prospective Landlord.  Looks can be deceiving.  The tenant you see may not be the tenant you get.  If you are not careful, the tenant you get may be your worst nightmare.  If you don't believe this - watch the movie "Pacific Heights" - the Michael Keaton character looked like the ideal tenant.

    When you rent a Vacant Apartment (hopefully after you have renovated it, so that you can get the highest possible Legal Rent - see What To Do With A Vacant Apartment), you want to rent it to a tenant who will take care of the apartment, pay the rent on time and not complain.

    While Real Estate Brokers are a valuable tool in renting Vacant Apartments and most of them screen tenants to some extent, keep in mind that it is the tenant that pays the broker and if they do not get the apartment, the broker doesn't get paid.  Therefore, it is in the broker's best interest to get you a tenant - any tenant - not necessarily the best tenant.  If you have a lot of buildings and use the same broker all the time, it is in the broker's best interest to get you the best tenant, so that you will continue giving him or her the listings.  But, if you are a small building owner, with few vacancies, you must make sure the prospective tenant is properly screened.

    There are several aspects to Tenant Screening.  We suggest that you make the prospective tenant pay for the Tenant Screening, in advance, in cash.  Some brokers will deduct this amount from the commission, if the prospective tenant rents the apartment. Some landlords will deduct this amount from the Security Deposit if they rent them the apartment.  Making the prospective tenant pay is completely legal and saves the Landlord money on deadbeats and ensures that the prospective tenant is serious about renting the apartment.

    The most important Tenant Screening tool is a Credit Report.  This will give you a lot of important information, including prior addresses, employer, outstanding judgments and Public Records, bank information, credit history and outstanding credit obligations.  This can be an important tool for the future, as well as for deciding whether to rent the apartment to this person now.  Every once in a while, even a good tenant goes bad - loses their job, has marital problems, etc..  A Credit Report can help you collect, in the event it becomes necessary to get a judgment for outstanding rent.  It can help you to levy their bank account or garnishee their salary and track them down through prior addresses (possibly their parent's address).

    The second item that should be checked is Employment.  How long have they been working at the same job and does the employer expect their employment to continue?  Have they frequently switched jobs?  A prospective tenant may tell you they make $25/hour - but is their work seasonal?  Will they be able to pay the rent if their overtime stops?  Do they travel out of town frequently, which could make access difficult if they will not leave you keys?  Do they work at home?  Do they work unusual hours, possibly causing them to make noise at unusual hours or to complain about noise in the daytime?

    The next very important item to check is references.  But you have to be careful. Friends listed as references will give nothing but praise.  A Landlord looking to get rid of a bad tenant will also give a glowing reference.  If a prospective tenant does not want to give you their current Landlord's information - find out why.  If you cannot reach a prior Landlord for a reference - there may be a reason - many prior Landlords would rather avoid you than tell you the truth about their previous tenant.  If you are particular about how a tenant is going to take care of your apartment, especially if you live in the same building, if it is at all possible, request to visit the prospective tenant's current apartment.  Even though this may seem to be an extreme measure on your part, it may be worth your effort.  This way, you can basically see how they live.  Of course, they will clean up before you visit, but you will be able to see if the "small dog" is a drooling, shedding, howling Shepherd / Labrador mix with a weak bladder, if the teenage son has multi-color hair and plays heavy metal at 172 decibels, if the "couple" of cats mean 17 of them, if they are running a business (such as a Day Care Center or Laundry Service) out of their apartment, and so on . . .

    A Landlord's best defense when renting apartments is proper documentation of a new tenant - it can save you a lot of headaches in the future.  Always make sure to have the prospective tenant fill out and sign the application - they must consent to having you run a credit check.  Always ask for photo identification (make a copy - it may help you later).  Always insist on meeting all other prospective occupants, including children, roommates and pets.  Always make copies of rent checks (and envelopes, if they contain an unusual return address or postmark).

    DHCRexpert.com does complete, unbiased Tenant Screening, usually within 1 hour.  Click here to Order.