Education and news for smart DIY landlords!
Like any business, landlording comes with risks. One of these risks is accepting a tenant who plans on taking advantage of you. Here's the reality: Tenant scams happen to any landlord who isn't careful. For example, the landlord who has no proper tenant screening process in place.
Bad tenants can do damage to your rental and make you lose money in different ways. So today, let's explore how you can avoid being a victim of tenant scams.
The devil is in the details. Some landlords only check a tenant's credit score. Don't. It's important to pay attention to a prospective tenant's payment history. Get some insight into the person's spending patterns. Is he often late on payments?
Read more: How to Verify a Prospective Tenant's Proof of Income
This type of tenant scam happens when a tenant has a guest who takes up residence in your rental without your knowledge. Another scenario is when someone who views the rental and signs the lease won't be the same person who'll occupy the rental.
Make sure that your lease includes a clause that indicates that a tenant is not allowed to move someone else or add a roommate without asking your permission. Violation will result in the termination of the tenancy.
Knowing that a rental has appliances attracts more tenants. Landlords aren't legally required to supply appliances, but some do to entice renters. The problem with this is that you can also invite tenants who steal.
The best way to avoid this scam is to create an inventory of the appliances that are already in the unit. Do a periodic inspection to let tenants be aware that you're keeping an eye on the rental.
Read more: Top 7 Amenities That Tenants Look for in a Rental Property
Steer clear of tenants who intend to pay you in installments just so they can move in. Always require them to pay the security deposit in FULL before they move in. Indicate this in the lease as well. You want to protect your business from tenants with financial difficulties who could eventually stop paying rent or end up damaging your property.
When finding the right tenants, it's crucial to not jump to conclusions right away. Take time to evaluate everyone who asks about the rental. Conduct a pre-screening over the phone. Does the person sound frantic or desperate? Have they filed for bankruptcy recently? Why exactly are they moving? What kind of work do they do?
Whether you're new or old to the landlording business, always protect your interests. Tenant scams may be common, but also remember that not all tenants are trying to fool you! Educate yourself and gain access to our landlording resources at our Landlord Prep Online Academy. See you there!
If you’re ready, make Landlord Prep your go-to resource for landlording education. Here, we offer a complete DIY landlording course to get you on the right track. Join our academy today. If you want, you can check out Flavia’s real estate investing webinar first!