As a landlord, you have many responsibilities, but the most important is to yourself and your property—which means you need to know how to avoid bad tenants before they sign a lease. Once a tenant has taken up residence in your rental unit, it can be costly and time-consuming to have him or her removed, so you should aim to head off any problems before the first box is moved in.
Other than protecting yourself with a detailed written lease, you can avoid becoming a victim of late or unpaid rental payments and property damage by taking the following precautions in choosing tenants:
1. Require potential tenants to fill out an application and provide sufficient identification.
Think of your rental unit as an opportunity for which renters should have proper qualifications. On your rental application, you should require potential tenants to provide:
Full name and any aliases or names previously used (including maiden names)
Social Security number
All the above information for other proposed occupants
Current and last two addresses (including landlord's name, contact information, last amount of rent paid, and reason for leaving)
Current and last two places of employment and salary
Other sources of income to be considered
Information on vehicles owned (make, model, year, color, license plate)
Other major expenses (car payments, student loan payments, etc.)
Copy of driver's license or other photo identification
Two or three references and/or emergency contacts
2. Perform criminal background and credit checks.
These days, background and credit checks are easily and quickly performed, but do be sure that you let potential tenants know that you will be performing these checks; aside from this being the right thing to do, you may also be able to weed out bad tenants simply by making it known that you will be running checks on their criminal backgrounds and credit.
Some notes on credit checks:
If a rental candidate says he has no previous credit record to check, you might want to avoid the situation entirely; in such a case, there would be no way for you to confirm his record of making payments in full and on time.
If someone's credit record comes back with large gaps, be sure to ask about them as it may mean your potential renter has offered a false name or number somewhere along the way.
If the cost of credit checks concerns you, consider charging potential renters a small application fee to cover your expenses.
3. Check references.
Don't just ask potential tenants for references and then be satisfied that they bothered to fill in some names and contact information. Be sure to follow up with each and every person listed by the tenant, and trust your instincts with the information you're provided.
Keep in mind that the best references in this situation are not personal friends and/or roommates but previous landlords—even better if it's not the current landlord, who could be so ready to get rid of that tenant that he or she might not paint a true picture. Past and present employers can also make for reliable references depending on the type of work the potential tenant does and the length of employment.