Investing in a rental property is an excellent way to generate passive income, but it comes with plenty of challenges. A big priority for any landlord is to find a great tenant who pays their rent on time each month and takes care of the property like it's their own.
A good tenant screening process helps real estate investors find good tenants, but what should owners look for to spot a potentially bad tenant? Property managers say a terrible tenant can cost a landlord a lot more than any rent you might collect before they have to be evicted. In this blog post, the best property management company Jacksonville, FL offers discusses some warning signs a property owner should look for to protect rental properties from bad tenants.
Beware of These Signs
Many people may appear to be honest, reputable individuals when applying for your rental property. However, they may turn out to be less reputable than their first impression implies. Other prospective tenants will employ creative deceptions to keep you from finding out about their shady histories, cunningly working their way to signing a lease agreement before you find out who they really are.
It might be hard to hear, but property owners often are better off with no tenant for a few more weeks than placing a bad tenant who can damage your property and cash flow. Property owners know the signs of a bad tenant. The best property management, Jacksonville, FL, offers recommends a proper tenant screening to reveal information about a tenant before they become a problem.
Let's look at some of the outward signs of a bad tenant that should show up during the screening process.
1. Criminal History
A criminal background check is a crucial first step in any screening procedure. While property owners must avoid a blanket policy of denying any applicant with a criminal past, the types of crimes an applicant committed should be considered.
Someone who got arrested for graffiti as a teenager may not be as much of a liability risk in your property as someone with an armed robbery on their record. Check with a property manager to review a criminal history report and apply legal criteria regarding criminal history for your screening and approval process.
2. Rental Hoppers
If a potential tenant has two or three addresses in as many years, it might signify they are a problem. For example, they may be someone who fights or argues with neighbors or someone who frequently fails to pay their rent. Whatever the case, people who move around a lot can be a red flag of a bad tenant. Contact former property owners to find more information if you see several addresses for a potential tenant on a lease application.
3. A History of Unemployment
Unemployed tenants aren't always a bad sign. A tenant may be looking for another job or recently moved to the area. However, even if there is a valid reason, there is still no guarantee they will have money for the rent in the future.
Do your due diligence if a potential tenant says they are self-employed but refuses to say what they do or provide some documentation. While many renters run their own businesses or work full-time in the gig economy, they should provide documentation to verify income.
4. Wants a Quick Move-In
A person in a hurry to sign a lease agreement might indicate that they need to find a new place because they are dealing with an issue with their current landlord. The cause for their quick turnaround may be anything from severe damage to their current rental unit or trying to sneak out of a lease agreement early without paying.
Proceed With Caution
If you see any warning signs we mentioned here, it's a good idea to check with a property management company in Jacksonville, FL, to help secure qualified tenants before they cost you more than you bargained for.
Some of the ways a bad tenant can be a costly mistake for property owners include:
- Late rent or nonpayment. Late rent payments cost landlords time and money. In extreme cases, bad renters lead to costly eviction proceedings.
- Causing severe damage to the property. Preparing a rental property for a new tenant is already costly enough. Unexpected damage to a property can put you behind on your real estate investing goals.
- Creating problems with other renters. As mentioned above, bad tenants sometimes cause issues with neighbors. When your rental home gains a reputation for housing bad renters, you'll struggle to find success in the neighborhood.
- Make unnecessary requests. A bad tenant can become an expensive problem by making unnecessary maintenance requests, then withholding rental payments until you comply.
While not every warning sign indicates a bad renter, property owners must pay attention to red flags. Work with a property manager to analyze tenant screening reports and place excellent residents!
The Best Property Management Company Knows the Signs
The best property management Jacksonville offers knows the warning signs of a bad tenant—and the signs of an excellent renter! Partner with a residential property manager that has the experience you need to avoid bad tenants. Spectrum Realty Services knows how to screen tenants and delivers property management services to avoid bad tenants before signing a lease agreement.
If you need additional help with finding quality tenants, download our free Tenant Screening Checklist.