Warning Signs of a Potential Problem Tenant : Are They Ready To Give You Money Upfront?
If you are a landlord or real estate agent, you know that checking a potential tenant’s bank, credit, background, landlord references, and employment information can help you determine whether that person would be a good rental prospect. If the potential renter has shown a history of paying his or her rent on time, that person would make a good tenant, right? Actually, there are other signs that could indicate a tenant who might not become a problem.
Everything else about the applicant appears to be okay so we sometimes ignore these warning signs. Many other times, we are in such a hurry to get the unit back on a paying basis, we go ahead and rent to the person anyway.
When your applicant begins to make a series of statements or excuses of why he or she cannot comply with your requests for information, you may have a potential problem renter. In these instances, you really need to explore further and to ask follow-up questions.
Are They Ready To Give You Money Upfront?
There are people who will try to take advantage of your eagerness to rent. An individual may offer as much as three months’ rent upfront if he or she is approved. While that sounds extremely lucrative for you, continue your investigation anyway.
Many times a problematic tenant will try to entice a landlord into accepting their application by offering prepaid rent, hoping that you will overlook spotty credit history, or negative reports, or even just not verify previous rental history, or employment.
Suppose you discover that the person making the offer has just become unemployed. How will he pay the rent beyond the three months? Does his or her bank account indicate an ability to pay the monthly rent? Remind the applicant that he or she will have to complete your tenant selection process before you make a final decision.
Be wary of a tenant who also tries to pay you in cash. Not having viable banking relationships may be an indicator of illegal activities. Also, they may try to come back and say that they gave you more money than you receipted.
Another consideration is that in many states, this also becomes an accounting nightmare, as you may be required to give the tenant interest on the prepaid rent. More importantly, if you don’t, you may face legal penalties and/or fines from the municipality, and may jeopardize the validity of the lease, allowing the tenant to break it early.
Ultimately, as a landlord or property manager, you won’t always know what type of tenants you will be dealing with until you’re in the leasing process. However, Instant Tenant Screening should give you an idea. Past behavior is a likely dictator of future behavior. Remember to always clearly state the expectations and outline the consequences of breaking the rules in the lease agreement. As it is a legally binding document, it can guide and protect most any situation you encounter.
One of the easiest ways to address tenant problems is to avoid them altogether. To ensure you get the information you need we’ve created a download that shows you the 9 Most Effective Methods To Reduce Tenant Problems. Get your download today!
You may want to review some other warning signs of problem tenants as well, see what else you can do to address those issues: