One of the most important steps in managing an income property is properly screening your tenants. We see landlords make this mistake over and over. If someone “seems nice,” they won’t bother checking out their references or looking at their employment or validating their rental history. Those people who “seem nice” are the ones who can do the most damage. It seems unreal, but there are actually “professional tenants” who know how to get into a building and avoid paying rent for six, eight, even 10 or 12 months.
All of that hassle, lost rent, and legal cost can usually be avoided on the front end with proper screening, because you’ll know if they’ve done it before. It’s better (and cheaper) to be safe than sorry.
At LBPM, we screen all of our prospective tenants. We look at their credit report; we pull their public records and check for civil judgments. We verify all the information we receive. But we don’t stop there.
You see, it’s easy to get a quick answer from a screening and background check company that makes you FEEL like you’ve checked them out. But experience has shown us that it’s always better to take the time to do a deep screening of the prospective tenant and verify all the information on an application.
For example, we don’t call the work phone number that’s on their application. Instead, we call the HR department for that company. The difference is that now we know we’re not talking to someone’s friend who answers the phone and is willing to say anything that makes the applicant look good. Calling the company instead allows us to find out if they even know the applicant and if he’s actually working there.
There are a number of specific steps involved in this process, and having a system in place is important. It’s also necessary to follow that system and hold the applicants accountable for what they’re telling you. This type of follow-through can save property owners thousands of dollars over the course of their investment.
LBPM has people on staff who specialize in screening applications and approving tenants. They know what to look for, what to ask, and how to identify little red flags that won’t mean anything to an untrained person.
A property owner who has 20 units might rent two or four units in a year. But we rent hundreds in a month and thousands of units over a year. That means our screening professionals have looked at hundreds of credit reports and conducted thousands of background checks, and they’re trained in finding the best tenants for your property.
If you have any questions about tenant screening, please contact us at LBPM, and we’d be happy to tell you more.