My phone has been ringing off the hook for the past two weeks. Lots of calls for rentals. I currently have rentals available, so this is a good thing. BUT BEWARE...at this time of year, as years in the past, the rental calls tend to be a little bit different than at other times of year.
Why, you ask?
Many people filed rapid refunds on their income tax and have a wad of money in their hand, today. Many are moving because they have to, some because they want to. The tone of the phone conversations tend to be very different at this time of year.
Now, I'm not a stickler on credit for perspective tenants, on the rental properties that I own. I never have been. I believe that bad things happen to good people. Many people have found themselves in precarious positions, especially in the past couple of years. I have placed 5-6 tenants in rentals over the past couple of years that got caught up in the mortgage foreclosure mess, and they pay their rent on time every month and they take care of their rental homes. I have no objection to taking a larger deposit to consider a tenant. I don't do last month's rent.
But, I also know there are questions that perspective tenants ask that are 'red flag' questions.
"How much to get in?" This means that's all the money they have and all the money they'll ever have. You'll never get another dime out of this tenant once they move into your property.
"I have first, last and security today." Yeah, because you haven't paid the rent in the place you're living in and you're being evicted.
"I can give you 3 months upfront. Would you still have to pull my credit?" This one is a no brainer. They figure they'll pay their way into the property. They are hoping that the lure of upfront money will keep the landlord from pulling their credit and seeing just how bad it is.
"Can I move in tomorrow?" I really don't care for this one. How many people can move tomorrow? Are they being evicted? My question usually is, "Do you currently have a lease?" And they say 'yes, but it doesn't matter, I can move anytime I want to.' HMMMM. This means they'll do the same thing to me, and break their lease with me. No thanks. I like the ones that tell me their lease expires in 30 days, and they'll need to wait till then to move.
"If it's not ready, I can do the rest of the work for you." Again, in too much of a hurry. And 90% of the time that additional work nevers gets done.
"I've been renting from my mom for the last 3 years. I pay her $700 a month. She'll vouch for me." I had the mom of a perspective tenant call me last week to tell me how wonderful her son was. As the conversation progressed, it was apparent that mom wanted junior out of her house yesterday.
And, beware of the perspective tenant that calls over and over and over again. I have had tenants try to reach me 6-8 times in an hour. Leave me one message and I will get back within the hour. If you call me this many times BEFORE you rent, then what happens when the toilet gets plugged when you are living in the house? No thank you!
Be cautious at this time of year, in the more affordably priced rentals. Many have received their income tax refunds and are out shopping for a rental.
BE CAREFUL: THAT INCOME TAX REFUND MAY BE THE ONLY MONEY THE LANDLORD EVER RECEIVES! I've seen it happen to a handful of landlords. So, prescreening is essential! It so important to continue to ask questions to get a better understanding of a perspective tenant's complete situation.
FOOTNOTE: Every situation is different, and as I always say, every perspective tenant must be considered on a case by case basis. I prescreen all callers. If I didn't I would be running around showing rentals to unqualified tenants; a waste of their time and mine.
This article is authored by
Sandy Shores, Melbourne FL Realtor
Brevard County Real Estate & Investing
Palm Bay Florida Real Estate News
that for you
Boy it's going to be interesting! So many people are needing rentals because of the loss of their homes, so their credit is going to be bad, but how do you tell the ones who are flakes from those that are just unfortunate. It's going to take a lot more discerning.
I don't do rentals but my company does a lot of them so I get calls while at the office all the time. Glad I can transfer the call to someone else.
I suppose I would be a "stickler about credit" if I represented home landlords. The landlords shouldn't have to pay for the financial difficulties of tenants who were not properly vetted.
Tough call, but when the landlord goes under, the rental unit is off the market. Tenants have put properties in foreclosure.
It's tough out there.
Hi Sandy!! It looks llike you have a lot of experience in spotting the bad apples tenants! Good post! and good luck to you in finding the right ones to fill your vacancies!
I am handling an application for one of my client's rentals right now. One applicant does not have credit the other has a judgement from the place she lives now. How can that be?
Karen, You are so right. We must be extra cautious in screening perspective tenants today. So true.
K.T., I can't blame you. The bulk of the rentals that I do, are my own. I am very picky if and when I do rentals for clients. I turn down more than I take, as often time landlords have unrealistic expectations as to what makes a good tenant.
Hi Lenn, We have to be so cautious in today's market - so true. And, like you said a non paying tenant can put a landlord right out of business.
Hey Miss Mary, Thanks for the always warm wishes. I just have to be careful! Hope you are well and warm today and free of mountain lions.
Angelia, The tenant has a judgement from the place that she lives NOW? That seems odd, doesn't it? What is the date on the judgement? If she had a judgement, usually that would be handed down at the same time as an eviction, for non payment of rent or damages, I would think. And, the tenant would be out of there. Have you spoken to the landlord of that property? And have you confirmed that is the real landlord? What is he saying? Sometimes (or not) they can shed some light on the subject. Did you ask the perspective tenant about the situation? What are they saying? Why are they moving?
Sandy,
As always, this is a great post. People need to beware and be aware of what can and does happen in the rental business. You are a wealth of information and I thank you for sharing.
Ann Hayden in windy Wildwood, Missouri
Wow Sandy, You have learned how to read between the lines very well. I feel lucky that I have but one rental left, a fantastic renter of 4 years and the fact that when she leaves town for up to 3 months with her job, she pays her rent up front. I don't remember how to read between the lines anymore...
I had a four plex and I think you stole those quotes from me if I didn't know better.
Sandy, I think this is very good advice and it sounds like you are aware of the losers ways around giving a credit statement!
Another thing to do is keep the rent just a bit high for the area, you will get a better clientele!
As expected I'm not the only getting those frantic calls from potential tenets wondering "how much to get in" I agree that it has a lot to do with the season. People who need to get into a house quickly usually scare me a bit. Granted each situation is different. Generally I find that these people do not make good long term tenants.
Hi Sandy
After reading your post; you are on top of the rental situation.
Good luck and success
Lou Ludwig
Sandy, Great post! Every investor needs to keep up their personal guard even if they are considering a tenant.
Great article. As the economy takes its toll, more and more people will have spotty credit. Best to also run a criminal background check from a reputable tenant screening company.
M Jones