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Screening Tenants and Limiting Losses with Bad Tenants

Handling bad tenants is a nightmare for the property manager, and therefore it is much better to have an effective and poignant screening system in place to avoid renting out the property to such people. Here are certain screening procedures that are highly effective.

1.    Background Checks: Thorough background checks are necessary for all prospective tenants. However, be careful you do not violate any privacy laws.
2.    Use of Databases: There are different industry databases that have a listing of bad tenants. For instance, there is a National Tenancy Database, which can be accessed by paying a small subscription, and there is the Landlords Advisory Service, which provides certain searches on payment of a small fee. However, there are certain laws governing the use of information from these databases, and you can check the guidelines at the website of Office of Fair Trading.
3.    Contact Employer: It is important to know how much a person earns to make sure, if he or she will be able to afford the rent. To know about the earning capacity of prospective tenants it is best to contact their employers and talk with them directly. Acquire the details about the employer and talk with the employer over the phone. Inquire about the monthly salary, and the post held by the person. It is also important to know whether the person is a permanent or a temporary employee.
4.    Ask for References: Always ask for the landline number for the references, since most scammers will have multiple mobile phones, and you could be talking to the same person when you call.
5.    Contact the Former Landlord: Talk directly to the former property owner rather than the real estate agent, as some agents may not want to reveal the person to be a bad tenant. Ask why the person had left the tenancy, and whether there were any late rent payments.
6.    Regular Inspections: Even after accepting a person as a tenant, the property manager should have a system in place to carry out regular inspection of the property. However, make sure the proper procedure is followed during inspections to avoid any legal trouble.

Be Upfront about Your Rent Rules

Even after following all the required screening procedures, it is still possible to end up with a bad tenant. In such a situation, there are some chances of losing money, but the priority should be about damage control. The best way to limit losses is to act expeditiously and within the confines of the law. Overdue rent should be tackled immediately, and the tenant has to be made aware about the rent & living policies. Include penalties for late payments in the rental agreement and enforce these terms strictly.

The Final Straw

A bad tenant will make all sorts of excuses for not paying the rent and such excuses should not be considered. However, if a tenant with a sparkling track record puts forward legitimate difficulties, then compromises can be considered to enable the person to make the payment. When rental arrears have exceeded a set number of weeks, the property manager can acquire an eviction notice through a rental tribunal.