This is the first in a series of posts focused on the fundamentals of tenant screening – information and advice for those who are new to residential property management, and those who have paid a price for what they didn’t know.
“To Screen or Not to Screening”
We are busy. We (some of us, anyway) have an inflated sense of our ability to “read people”. We operate for years without a problem – reinforcing this flawed notion. Then it happens. A serial evictee with a nice personality stops paying rent. There is damage to the home. Neighbors complain or move out.
You come to your senses. You issue notice. You ask the resident to leave. They blow you off. You hire an attorney who files an unlawful detainer action with the courts. Time passes. The tenant moves out and the case is dismissed – since there is no hope of recovery. Ouch!
And then it dawns on you. There is something worse than a vacancy…. a bad tenant.
The answer, of course, is to thorough vet adult residents. Screen them yourself or hire someone to screen them. Just do it. Tenant screening is a form of risk management. By screening prospective residents – by denying those who are a risk to persons or property – or those with a history of violating the terms of their rental agreement – we reduce the odds that we will fall victim to those things.
Screening is like buying insurance. We buy it, not because we think we will have a fire. We buy it because if we did have a fire – the damage could be catastrophic. You might get lucky – not screen and not have a problem. But if you do have a problem, it can be disastrous.
Depending on equity and cash-flow – non-payment of rent combined with the cost (in time and treasure) of an eviction – can cost you your property.
It takes a number of skills to succeed in property management. It takes wisdom. It takes the courage to carefully screen prospective residents and to walk away from a bad deal. But those who succeed in this business, do exactly that.
Next up: The Application