Whether you put your primary home on the rental market or maintain one or more rental properties for investment, the wrong tenant can be a disaster. You don’t want to scare off a potentially good tenant with too many questions, but you also don’t want the problem tenant to slip through. Homeowners rent out their property for a number of reasons, including extra income and difficulty selling a home in a slow market. Whatever the reason, you need a tenant who complies with all of the terms of the lease. You can avoid joining the group of homeowners who have horror stories to tell about rental property by requiring and checking references and asking the right questions.
Although property owners have several tenant-screening resources, including eviction searches, criminal-record checks and credit reports, the reference check remains an important part of the process. Your rental application also is important, but a prospective tenant can enter false information. Talking to homeowners or property managers who rented to an applicant can reveal the facts. A past reference often is more helpful because a current reference might withhold some information if he hopes to get rid of a bad tenant. Prepare for the reference calls by writing down your questions or using a form. Add questions to the list if you have specific concerns about an applicant. Be aware that some property managers only answer generic questions, such as rent amount and length of tenancy.
Confirm Reference Identity
Confirm the identity of the person providing the reference by asking the name of the individual and management company. Ask a private homeowner whether she is related to the applicant and, if not, how she knows the person. Ask the reference for the address of the property she rented to the applicant and the name of the property owner. If you have concerns about the identity of the reference, check property ownership with your local property tax office.
Lease and Tenancy
Include questions about the date the applicant moved in, was there a security deposit paid and the length of the tenancy. Ask whether there was a lease and whether the lease was month-to-month or yearly. Who were the occupants listed on the lease and did the applicant have a co-signer? Did the applicant have pets or roommates not listed on the lease? You will want to know whether the reference ever tried to evict the tenant and whether the tenant ever broke a lease by moving out early or without notice. Ask about complaints from neighbors, smoking habits, property damage, cleanliness, criminal or questionable activity and any violations of the lease or homeowner association's rules.
Rent History and Employment
Ask specific questions about the amount of rent, increases and the applicant’s payment history. You will learn about the consistency and responsibility of the tenant with questions about bounced checks, failed debit transactions and how often the rent was paid late. Ask the reference what he knows about the applicant’s employment, but call the applicant’s employer to get factual information. Information about the applicant’s salary, raises, promotions and length of time on the job tells you whether she can afford the rent, has job security and is likely to change jobs often.
Vacating the Property
Find out when and why the applicant is leaving or left the previously rented property. Did the applicant give proper notice? Ask about the condition of the property after the applicant left. Did the applicant leave the property clean and remove all personal items? Ask whether there was any damage beyond normal use, the applicant left any bills behind and whether the reference returned the applicant’s security deposit. Include a few questions about the reference’s overall experience renting to the applicant. Conclude your conversation by asking whether the reference would rent to the applicant again and if not, why.
Gail Sessoms, a grant writer and nonprofit consultant, writes about nonprofit, small business and personal finance issues. She volunteers as a court-appointed child advocate, has a background in social services and writes about issues important to families. Sessoms holds a Bachelor of Arts degree in liberal studies.