Warning Signs to Look Out For When Choosing Your Tenants
Making a mistake in approving rental applications can be costly, so as a landlord you should learn the skill of choosing the right kind of applicant. There are several red flags that you should be aware of. It is important to be extra vigilant when choosing your tenants and processing your tenancy applications. By not processing the application thoroughly and ensuring your tenants are not blacklisted on tenancy defaulting databases your landlord insurance may be void. This is why choosing a professional property manager to assist you managing the property and this process is essential.
Here are several signs you should be mindful of when deciding whether to accept or deny a rental application.
Insufficient Income
This is one of the first things you need to consider. A tenant has to be able to afford the rent. This can be determined by assessing their income against the rent. If their income is too low and they do not have any supplementary funds such as savings in a bank account then the tenant would not be suitable.
Bad Rental Record
It is necessary to check a prospective tenant’s current and previous rental references along with their employment reference.
When checking a tenant’s rental history you need to know whether the tenant has paid rent on time, what was the rent, how long have they lived at the property, was there any damage noted at routine inspections or the vacate inspection, was maintenance reported in a timely manner, how were the tenants to deal with and was there any damage from pets. This also includes previous evictions. If they have a history of eviction, this is a red flag.
Employment History
A steady employment history — that’s what you should be looking for. If there are large gaps in between employers, it’s a bad sign. Multiple gaps in their employment history could signify that the tenants affordability may be an issue in the future.
Conclusively, by communicating with the applicant there may be an explanation or an issue that can be worked around in order to achieve a good outcome for all parties. It is best to be upfront and ensure communication is clear between all parties from the beginning of the tenancy so that when issues arise these can be dealt with effectively.
