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Old 09-28-2005, 06:21 AM
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Default Landlord Tip of the Week

It's amazing. Too often landlords have no
concrete idea of whom they will accept as a tenant. The
result is that they accept just anybody, or they rent on
"gut instinct." Both methods are fraught with danger.
A third method is taking your property off the
rental market for a month or two, because you didn't get
any decent applicants and are afraid to either rent
to any of them or turn someone down for fear of a
Fair Housing complaint. Then you lose one or two
months rent--and needlessly.<br><br>We know what happens
when you rent to the first person who shows up with
cash. That's the last cash you'll see from him. And,
you can end up spending a lot of your own cash to fix
the damage that he or she did, plus paying the
mortgage out of your own pocket because of the rent you
never received.<br><br>The gut-instinct method has
worked for some landlords for many years, without them
getting burned. They have been lucky. It is perilous two
ways. The first is related to the "rent-to-just-anybody
system" of landlording: you pay because they don't. The
second is that you reject a perfectly acceptable,
possibly even sterling, applicant because he or you had a
bad day or didn't quite hit it off. A corollary
result is the Fair Housing complaint because your
rejected a member of a protected class because you had a
"bad feeling" about him or her, but accepted another
applicant who was not a member of a protected
class.<br><br>Rental standards avoid all three of the problems I've
just described. In fact, having printed out rental
standards does three things for you:<br><br>One, it
self-screens applicants. Properly done, you will eliminate a
large percentage of the unqualified applicants from
even asking to rent from you. When they ask for a
rental application, you give them one and with it a copy
of the rental standards. Many times when they read
them, you never hear from that applicant
again.<br><br>Two, it gives you an idea of the minimum standards you
will accept for a tenant. No more guessing and using
how you feel to decide.<br><br>Three, properly drawn
and managed, rental standards protect you against
Fair Housing complaints far more than if you do not
have standards.<br><br>Reasonableness<br>Standards are
kind of like Goldilocks when she tasted the porridge,
they can be too strict, too easy or just
right.<br><br>Too strict standards can mean you end up making
yourself a lot of extra work and losing a good tenant
because your standards didn't fit the property. Not every
rental property is going to attract applicants who have
ten years of increasing responsibility at one company
and a previous tenancy lasting seven
years.<br><br>What kind of rental standards are reasonable? You have
to choose. But standards you include are things that
show that the applicant will be a good tenant, not
just that they meet some standard.<br><br>If you have
some properties that attract low-income people or
first-time renters, probably the kind of housing that has
the greatest number of bad tenants, one way to
accomplish that is by using standards that leave options for
qualifying.<br><br>For example, you might use the following reference
criteria:<br><br>At least one of the following types of references is
required of applicants:<br><br>1) A satisfactory current
landlord reference of at least three months in
duration.<br><br>2) A satisfactory past landlord reference of at
least six months' duration in the past two
years.<br><br>3) A referral from a social service agency which has
a partnership agreement with the property
manager.<br><br>4) If no or insufficient landlord references, then
satisfactory personal references (such as teachers, coaches or
ministers), and/or participation in a housing readiness
program may be acceptable.
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