The most common concern for rental property owners today according to Laura Litten is “ending up with marginal to poorly qualified tenants. This situation usually leads to problems down the road when they do not pay the rent on time which frequently digresses into not just late payments, but partial payment of the rent, and it snowballs from there.”
Litten, Broker-Owner of Heritage Real Estate Group in Annapolis, MD is a 29 year veteran of the real estate industry and has been very involved in property management and leasing during the last several years. In her opinion, even though there are many tools available to perform a thorough pre-qualification of potential tenants, she says that “in a misguided effort to save money with a DIY approach, property owners often end up with exactly what they do not want – a poorly qualified tenant.”
In the wake of the real estate bust which began in 2008, many owners of residential property unintentionally became landlords. People who never intended to be a landlord unexpectedly found themselves in the rental market because they needed to move but were unable to sell their property. No doubt many were under water when they needed to sell or were part of dual income households where there was a job loss or medical disability that caused a reduction in income. Whatever the reason, homeowners who were fortunate enough to hold onto their property have had to learn how to navigate the complexities of property management. Learning how to manage property and keep up with all of the rest of one’s life and priorities can be difficult and time-consuming. And an unqualified tenant can make life miserable for the landlord, eating up loads of precious time and costing thousands of dollars in the process.
Litten looks at many factors that would be red flags to her about a possible tenant. She says, “The typical property owner doesn’t have a comprehensive list of items to consider and so even though they are capable and intelligent people it doesn’t mean they’re savvy about what to look for in a tenant.” She adds, “Even with the right questions and tools, along with many years of experience, it’s not just about the credit report. There are a lot of things to look for that make up a comprehensive vetting process so that a person who passes each test, so to speak is more likely to be a good tenant in paying the rent, paying it on time, not damaging the property and not breaking the various other terms of the lease.”
John Nuzzolese, property management expert and founder of The Landlord Protection Agency, echoes Litten’s opinion when he says “Don’t rent if you’re not willing to screen tenants carefully! It’s just not worth it.”
If the property owner is not going to hire a professional who offers a guarantee, Litten suggests that they should be certain to check credit and look for previous rent defaults and evictions. Second speak with the tenant’s prior landlord to find out about their experience with the tenants. Third, they must take great care not to violate equal housing laws. Lastly, they will need to rely on what most unintentional landlords often don’t have which is a kind of sixth sense or intuition about who is or is not going to be a good tenant. To learn more about property management contact Laura Litten at: laura@heritagebuzz.com.