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Keep An Eye Out For These 8 Red flags During Tenant Screenings

Any body in the real estate field will tell you that tenant screening is critical to the success of your property portfolio and property management. Finding the right tenant for your rental is almost like dating, with tenants and landlords both trying to find the most suitable match. Having a bad tenant is like dealing with a pest infestation. No landlords wants to have problems with their tenant sand similarly vice versa. The process of finding good, quality tenants to rent your properties out to can be long and arduous. Although there are guide lines and procedures for how to screen tenants, it doesn’t ever guarantee success. It can certainly heighten your chances of eliminating the ones who are blatantly bad, but at the end of the day, nobody really knows how a landlord-tenant relationship will play out until the papers are signed and sometime has passed. Of course, there are certain behaviours that you should be aware of and further investigate. 

At the base minimum, all tenants should meet the most basic criteria to be approved. There are high-risk tenants, low-risk tenants, and everything else in between. The lower the risk a tenant is, the higher your profit will be because some of these red flags can be disastrous for your property portfolio. 


Whatare some important red flags you should watch out for when screening tenants? Readon to find out how to weed out the good from the bad!



The Prospective Tenant Does Not Have Enough Steady Income And/or Change Job Too Often

This is the number one red flag out of the list. If a tenant does not have enough steady income, how can you expect your rent to be paid on time every month? You should also be careful about taking in a tenant based only on a large deposit.It helps but sooner or later, the money will run dry if he or she does not have a steady job with in flowing cash or changes jobs way too often. A person’s level of income will tell you the tenant’s ability or inability to pay the rent on your property. 


They Display Risky And Unstable Credit Score

A credit score is essentially a numerical expressed based on a level analysis of a person’s credit files, to represent the credit worthiness of a person. No number is more important to prospective home buyers and renters than their credit score. A good credit score is also one of the most valuable assets that a real estate investor can have. A person with a good credit score has a better chance at the negotiation table. While a low credit score will not automatically disqualify prospective tenants, it could hinder one’s ability to secure a home. 


It’s even a bigger red flag if the prospective tenant seems hesitant when you ask for a credit check.Hesitation could be an indication that the person has something to hide. May be they are afraid that you will find something negative in their credit report that will stop them from renting or buying your property, whether it be a poor credit score, large amount of debt, or even a prior bankruptcy. As a landlord,you are not legally allowed to run a credit check on someone unless the applicant agrees to it in writing. Therefore, if the tenant does not agree to you running a credit check on them, you should protect yourself and cross off the tenant from being approved. 


On the other end of the spectrum, a prospective tenant who agrees to a credit check does not necessarily mean that it is green light for everything. Simply consenting to a credit check does not mean that a prospective tenant is a good credit score. You may find things that you did not expect to find. Maybe a tenant has a history of not paying the bills on time and has not managed to rectify the financial problems. Credit reports can give you a rather informative insight in to the tenant’s financial choices, good or bad. 


They Have A Criminal Record

This one is pretty obvious. You would not want a criminal living in your property.It’s so important to do the proper research to find out if a tenant has a criminal past and exactly what they entailed. People with criminal records tend to be very high-risk. Watch out for things like arrests for acting with violence, domestic violence convictions, multiple alcohol-related convictions, sex offences and the like. These are all signs of someone who cannot live responsibly and in a civilized manner. If you decide to approve a client of this calibre, it will only spell disaster for you.


Ifit’ssmaller things like traffic violations, speeding tickets, it may be okay toaccept, as long as the tenant doesn’t have a track record of gettingin to trouble for not obeying rules. If they can’t obey the law, do notexpect them to obey your lease. You could open up yourself to complaints,disturbances and further crimes. 


They Have Bad Landlord References

This one is a bit of a hit or miss because many landlords will ask tenants to leave for whatever reasons, but still give them a great reference because they want the tenant’s trouble to go elsewhere. Other tenants may forge reference by asking for someone to pretend to be their landlord. This isn’t always the case but it does happen, enough for it to be pointed out. 


References from previous landlords should not be the only indication of whether you approve a prospective tenant since the information can be misleading. This is when you put on your detective caps and put your analysis and instincts to good use. You can pick up a lot of visual clues about a person’s life and character through careful observation during even a five minute interaction. 


They Have Untrained And Aggressive Breeds Of Dogs Or Other Animals

There are certain cities that are not animal friendly at all, and Hong Kong is one of those places. It doesn’t matter what breed or size of dog you have, landlords do not like animals and will charge you a hefty pet deposit fee even if they agree to let your pet move in. Generally speaking though, most places around the world are weary of certain breeds of dogs, such as Pit bulls, Rottweilers, Chow Chows , Akitas,Mastiffs, Wolf mixes, or any mix of the above. Most tenants tend to avoid aggressive or large breeds of dogs and animals because of the higher risk of having them on the property. Insurance companies worry about this and will not allow for these breeds also. This isn’t always accurate, but studies show that people who own these types of breeds or more likely to favour riskier lifestyle, and as a result, tenants avoid them all together. 


Large and aggressive dog breeds are worrisome because of all the unknown factors. Is the dog well-trained and obedient? Does the dog listen to its owner? What if the dog bites or worse, kill another pet or person? It may come off as a double standard, but a small dog such as a Yorkshire Terrier has more leeway to be untrained because the damages are not as intense if it happens. A York shire Terrier or Chihuahua cannot in any normal situation kill a human being, but a Rottweiler can easily overpower any full grown adult if it chooses to act out and attack. Large and untrained dogs are also more damaging to a property.These breeds are known for being destructive when not trained properly, from knocking down doors, scaling fences, to hammering holes in the dry walls. It’s understandable that even a dog-loving landlord would want to avoid these breeds at all costs. 

They Move A LOT For No Substantial Reason

Unless the relocations are because of work, anyone who moves too often could pose as a problem tenant. There is always a reason for why someone moves constantly. Why are they moving? Do they have a habit of being evicted from being inconsiderate neighbours? Do they have a history of not getting along with their landlords? 


If there are legitimate reasons, it should be noted as a warning sign. 


They Need To Move ASAP. Right Away!

It can be a huge red flag if a tenant wants to move immediately. Why the rush? Why would somebody need a place so soon? It could be because they were evicted or any other reason. Are they not able to pay rent in the previous place and are forced to move on? Are they running away from the law? Do your due diligence and find out what the reasons are. 


There could also be very legitimate reason for their move. Maybe they decided to move to a new city and need a place to live, or other reasons that are not faults of their own. 


They Are Not Able To Pay The Full Deposit Pre-Move in

if your tenant does not have the full deposit to give you before move in, do not rent to them. You will likely never get the full deposit and end up putting yourself in a very risky situation. 


Your property portfolio is your business, so treat it like a business. If you were a store owner, you wouldn’t sell a product to someone without actual monetary transaction. You wouldn’t let the customer use it for a few weeks and then ask them for money. 




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