Your landlording task will be greatly simplified if you invest a small amount of time at the  beginning of the process. That is the key. Look for danger signals, and simply do not rent to people no matter how personable, who exhibit those signals. Watch out for:

• Unwillingness or refusal to fill out a written application.
• Inability to remember current or former landlord's name or phone number, or refusal to supply that information.
• Lack of landlord references or references who cannot be contacted.
• Using parents or employers as references, but no landlords.
• No bank account.
• No job or a claim to be self-employed for the past few months only, with exceptionally high income.
• An attempt to negotiate for lower rent or to barter a portion of the rent in exchange for services (a sign the prospective tenant cannot afford the place).
• A request to pay the security deposit in installments.
• A family obviously too large for the place you are renting.
• Overly aggressive pressure to move in earlier that you'd like.

Some of these points are self-explanatory, but a few require special explanation. When a  prospective tenant cannot supply you with landlord references, that could be a sign that they have been evicted or have a dispute with their landlord¡ªobvious danger signals. In checking landlord references, also be aware that the current landlord might have a strong incentive to provide you  with a positive reference because of the need to get rid of the dead-beat tenant. The most important reference to check is the landlord previous to the current one.

The lack of a bank account is a very strong negative indicator. Most people naturally operate out of a checking account, even those who have just moved to town. You should be suspicious of people who want to pay their rent in cash, and you will discover that such people tend to be chronically late with payments or short part of the rent. Having a bank account is a good sign, indicating that the person is operating within the system and is able to keep an account going without bouncing  checks all over town.

You can recognize the signs that people can't afford the rent you are asking: Their families are  too big for the house, they want to reduce the rent, or they want to barter part of the rent. All of these are unacceptable. You should never negotiate with people about rent levels once you are satisfied that the rent is reasonable. And you should never, never do business with tenants. Bartering rent for work or exchanging rent for some service is a mistake that will backfire on you. It is impossible to reverse the agreement: and you give all of the advantages to the tenant: If the work they perform is unsatisfactory, you have no choice.

One of the more subtle signs to watch out for is the complete con. The person pulling it probably  is being evicted and needs to find another place immediately, but you will be told there are no  current references because the applicant has been living with mother. Calling a tenant's mother to  check is a waste of time; mothers never give negative reports about their own children. The  prospective tenant will pressure you for permission to move in immediately, and will express great enthusiasm for fixing up the place, doing some inside decorating, ambitiously working in the yard, and other similar expressions of ambition, all designed to fool you into thinking you have found  the perfect tenant. In truth, though, the individual will probably be late with the rent every  month, never work in the yard or fix up the house, and adopt a nasty attitude toward you  immediately upon moving in.

All of the danger signals should warn you about problems of affordability, personality, or other  qualifications. Remember: People do not willingly look for a new place to live when they are out of  work and out of money. Anyone who does not have the funds to pay a full month's rent and the required deposits is probably in trouble with the current landlord and will probably end up being a problem for you as well. You might not be getting the full story, and you probably are not getting  the real story either.

Without exception, do not enter into an agreement with someone who cannot give you present and  prior landlord references. Everyone has to have lived somewhere, and you should not take the risk  of renting to someone who has been a problem tenant. Anyone who has not been a problem tenant will gladly provide you with references. Also, you should make it a practice not to rent to a first-time  tenant, someone who claims to have been living with parents and to be looking for ones own place  for the first time. Being a responsible tenant is something people learn as part of a process, and  that process is expensive for landlords. Let someone else provide this "life experience."

Set a policy and enforce it: No renting without complete references. No exceptions. That will help  you avoid many, many problems. You should know that there is a form of adverse selection in the  tenant market, meaning that many people looking for a place to rent have problems where they live  now. And many of those problems are caused by the tenants. So in the range of applicant you will  interview, there will tend to be many people to whom you would rather not rent.

Another policy you should enforce without fail: Always get a written application. Simply stating  this rule screens out many deadbeat tenants. When they hear that you need them to fill out an application, many people don't even show up. Figure 10.1 is a sample application form you can use  to capture information you need to have. Design a form that works for you or modify this form for  your own needs.

Be sure to require Social Security number and driver's license number or other identification. If  anyone is unable to supply you with this basic information, don't waste any further lime. Having  this information helps you qualify people, because virtually everyone needs to be able to present  basic identification, in addition, if you go so far as to require a credit check from applicants,  you will . need identification numbers to get the report. Many people do not check credit on the  theory that good credit does not necessarily make a good tenant, any more than bad credit  necessarily defines a bad tenant. But one of the pieces of information you can discover in most  areas rerunning a credit check is whether the applicant has ever been evicted or had a judgment  against him or her for unpaid rent. This is valuable information.

 

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