Flipping through channels the other night I stumbled across an episode of “I Love Lucy.” I was welcomed by that familiar phrase when Ricky comes home and announces himself by exclaiming “Lucy, I’m home!” This was followed by them sharing dinner and some friendly husband/wife banter until they retreated to their bedroom where they slept in different beds. This created a stark contrast in my mind of how much has changed over the years. As a landlord for the past 25 years I have witnessed enough changes to make my head spin, especially when it comes to discovering information about my prospective tenants.
Pre-internet we relied on calling past landlords and current employers. More than once a landlord told me stories about how the tenants car leaked oil on the driveway and the kids broke the ceiling fans imitating Tarzan. From employers I never saw a paycheck stub, but instead relied on a phone call to verify income, hours, and length of employment from a willing employer. The days of trusting a handshake and the good word from a friend seem archaic.
Fast forward to today and we see that the old ways are gone. Employers will barely confirm an applicant works there, let alone share any valuable information in fear of violating a person’s rights. A call to large multifamily housing units go nowhere on the advice of the management companies’ attorneys. You’re lucky to find out if the applicant lived there and when they moved out. You can outsource this function to others, but they have similar or less success and charge you to perform the verification. Now, the once powerful tool of effective employment and rental verifications have been neutralized, leaving you guessing about how your future tenant is going to take care of your place and pay the rent month after month.
Hope is not lost… when the rules of the game change, we must adapt to find ways to succeed in the business we love. Asking the right questions and properly analyzing the responses are still highly effective tools in identifying the right tenant for your property. The more questions someone answers, the easier it will be to see if they are stretching the truth. Once you have the application, spend some time on these items below; it will pay big dividends.
Employment Verification:
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Require a copy of the applicants last 2 paystubs. Faking one paystub might be easy, but two might be a little more difficult as all the numbers must match up on the year to date totals. Check the math. If they claim to have worked for their current employer for a year but in August their YTD total is $1000, there might be a problem.
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Call the employer, not for an employment check, but just to talk to the applicant. This is simple and inexpensive way to confirm they currently work there. It’s important to look up the phone number online and disregard the contact information that was provided on the application. You never really know the number they gave belongs to the company and not their best friend.
Rental Verification:
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Check the local jurisdiction courts for eviction records. Past landlords might not tell you much, but a public record eviction filing will give you concrete evidence on how (or if) they pay their rent. Even if the file is dismissed, their pattern of late payments warranted filing the complaint. In my book that is still late rent.
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Require a utility bill with their name on it, including the address of their prior residence. It is way too easy for someone who has been evicted to move in with family and deceivingly adopt the family address as their own, allowing them to hide the eviction address. More than likely they hesitate to show you a utility bill with information on it from Mom’s house.
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If possible, run an address history with your screening provider to uncover all the applicant’s prior addresses. You can also look on the credit header for past addresses.
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Ask the applicant about their experience with a previous landlord. What did they like? What would they have liked to be different? Seems innocent enough but if they are willing to dump on the last landlord, they will eventually dump on you. You have to ask yourself…what makes me any different?
Having access to every tool we can in this industry is paramount to our success. Across the nation, legislative sessions result in more restrictions on our industry and an increase in taking away our ability to protect our investments. Recently the government has given us the contradictory guidelines to treat all applicants the same yet perform an individualized assessment when considering the qualifications of a tenant. Which is it?
We do our best, we follow the rules the best we can, and in the end…we win! Even in this ever-changing landscape, being a property owner is the best game in town. Times have, and will continue to change, but with an educated, hands-on approach, we can find that right tenant the first time. Tenants and landlords want the same thing, to sleep well at night, whether we are in separate beds or not.
About the Author
David Pickron has been a licensed private investigator for over 20 years, specializing in tenant screening for real estate investment owners and property management companies. His company, Rent Perfect, an Investigative Screening Company, helps clients onboard tenants from the initial background check to leasing and payment collection. You can learn more by visiting www.rentperfect.com or calling 1-877-922-2547.