It came back to bite us
Having a well-thoughtout tenant screening process is essential to your success as a landlord.
If you haven’t developed this plan, you should really give it some thought.
Let me walk you through the major parts of our tenant selection process and then show you how not sticking to it resulted in us getting a house back in poor condition for the first time in nearly 10 years of landholding.
Our tenant selection process starts with our advertising. You see, we put very detailed instructions into our ads about when and how to contact us. Namely, prospective tenants have to call us directly on the number listed in the body of the ad, located at the end.
This ensures two things.
No. 1, it makes people read all the pertinent information in the ad, which cuts down on wasted time from callers wanting to know things like how may bedrooms the house has and how much it is per month.
No. 2, controlling how prospective tenants contact us requires them to follow directions. And those who don’t are disqualified.
This tactic lets us know if a prospective applicant can and will follow directions, which is essential for a good tenant.
I mean, think about it: if they aren’t willing to follow simple directions while they really want the house, how likely would they be to follow them once they’re already in it?
The next step is that they must view the property.
We want our applicants to view the house before they send in applications to make sure they really want it. We’ve had people in the past be all gung-ho about the house and want to sign a lease and give us the money ASAP. Then, they’ve found out that their king-size bedroom suite wouldn’t fit once they were actually in the property.
This process circumvents that issue and allows us to spend time reviewing only applicants who truly want the house.
After they’ve seen the property, they must fill out the application, in full, putting N/A in the sections that aren’t applicable.
Applications not filled out completely are disregarded without further consideration. Once again, this is to see if the applicants follow directions well.
Once received, we check the application to make sure it meets some minimum requirements like whether they have been employed for over a year and if they are registered on the sex offender list. We also find out if they have a stable rent history, if they possess home maintenance skills and if they have the required income to obtain the property.
Finally, we set up the inhome interview where I go and meet with the prospective tenants in their current home. The purpose of the interview is to meet them in person, to see how they keep their current residence and to see if I think they can do the four jobs of a tenant, which I have written about here in the past.
Once that’s done, we make our decision and set the formal lease up.
This is our standard procedure. It takes a little bit of effort, but as long as we stick to it, following this protocol has always given us great tenants.
Last week, some tenants vacated a property without telling us. Consequently, we got a house back in poor condition in my opinion. They took most of their belongings with them and left very little trash, but the house itself was filthy.
In addition to that, they had made shelving out of 2x4s and nailed them into our wall with 16 penny nails. Removing those could easily cause wall damage.
Speaking of wall damage, there was a mysterious hole in the master bedroom wall. It was a bit larger than a silver dollar, and it went all the way to the outside through sheet rock and two layers of siding.
We have never had this happen before. We always get our houses back in great, rent-ready shape.
So what happened? To make a long story short, we deviated from our tenant screening process a bit. The tenant didn’t have a stable rent history and hadn’t been on the job for over a year.
But because he was a veteran, we rationalized that we were helping him move into a better situation.
I once heard a magistrate judge say, “You can be a landlord or a social worker ... but you can’t be both.”
The judge was right. Because deviating from our tenant screening process really came back to bite us.