Property Management Blog

Guide to Avoiding Bad Tenants | Harrisburg Property Group

System - Wednesday, September 26, 2018

Guide

You take pride in the quality of your properties and the residents who live in them — you just wish that sometimes certain tenants did, too.

Understanding how to avoid terrible tenants can feel a bit like playing property Russian roulette. As a manager or owner yourself, it falls on your shoulders to thoroughly find, vet, sort, and verify the good renters from the bad. This inevitable part of the job can lead to many headaches — and, in worst-case scenarios, legal battles, and corrupted property portfolios.

In our tenant screening services for Harrisburg, Pa., and the surrounding areas, we've collected dozens of tricks and tips to pick the right tenants for your properties. We've condensed some of the best into a guide so you can steer clear of bad tenants who glitter but aren't gold.

1. Keep Your Ads Professional

Let's start off with an avoiding-bad-renters tip well within your control — your property's advertisements.

Terrible tenants or those with a history of rental abuse strategically look for ads signaling easy prey. This isn't a scare tactic to make you second guess your online and print posts. But it is an easy and effective practice to preemptively invite good renters and mitigate the bad just by using the right language.

Ensure all of your ads, digital and print, appear clear and professional. Use industry language and upscale property details, high-quality photos and even a management logo to signal your professionalism as a property owner or manager.

Do not mention if your property has been vacant for extended periods of time, advertise numerous price reductions or state you're looking for an "immediate tenant." Sure, these might be true, but making such information public is like taking bad renters' hands and personally inviting them to start a lease. Serious and responsible renters respond to serious and responsible advertisements. The opposite is also, unfortunately, true.

2. Conduct a Strategic Prospective Screening

Many property owners understand the importance of a prospective screening yet struggle to find natural ways to initiate them. Yet these first impressions are essential, not only because they give you a gut sense of someone, but because you can begin to ask the right questions and inquire about the right details that will scare away bad prospective tenants.

Conducting an early strategic meeting is the best way to assess red flags before lengthier vetting procedures. Employ the following early meet-ups depending on what works best for your schedule and comfortability:

  • Face-to-Face Meeting: Perhaps most constructive, a face-to-face meeting with a prospective tenant allows you to review the lease's overall rules, rental income restrictions and answer any questions they may have on their end. You're also afforded the most direct interactions with prospective individuals, which many managers know can prove invaluable.
  • Phonecall: If a brief face-to-face meeting isn't possible, opt for a phone call. These can give you the time to explicitly relay lease expectations and get a sense of an individual's communication style and personality.
  • Email: The courteousness and promptness of an individual's emails can say a lot about their potential as a renter. Consider email as yet another way to screen applicants in an early and easy manner.

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3. Avoid Yes or No Questions In-Person and In Rental Documents

Does your lease or rental agreement have the tenant check a generic list of yes or no boxes? If so, you're missing a prime way to sift good tenants from bad — and to do so at multiple points.

Consider all the ways you can craft questions throughout rental documents and in-person interactions to provide extra insight. For example, rather than inquiring if the prospective individual has enough money to cover the first month's rent, application fee, and security deposit up-front, ask when they will be sending you these deposits. Instead of asking if they've rented in the past, ask for past landlords' contact information and addresses.

As one of the more under-the-radar tips on avoiding bad tenants, it's this tailored lease agreement language again playing a huge part in early information gathering. Yes-or-no questions only go so far in making confident and comfortable resident decisions.

4. Use the First Showing to Steer Clear of Bad Tenants

There are so many ways to use the first showing to learn about the potential and pitfalls of a tenant. Seasoned property managers to first-time owners alike can likely brainstorm many items to look out for when showing a space to someone for the first time:

  1. Timeliness: It's not exactly a ringing endorsement if a prospective tenant arrives late to their pre-arranged showing. While this doesn't make them a bad person, it does tarnish their impression as a responsible and proactive candidate you want to rent to.
  2. Demeanor and appearance: Does the prospective renter appear happy to be there and genuinely interested in the lease? Or do they carry a "let's-get-this-over-with" mentality that's as stand-offish as it is alarming?
  3. Shoes on/off: An industry trick as old as renting itself, many managers assess the conscientiousness of renters by if they remove their shoes or not after entering the room. Decide for yourself if this means something and take note of other ways they interact with the space.
  4. State of their car: Perhaps even more telling than the shoe trick, see if you can sneak a peek into the potential tenant's car. Is garbage strewn about, wrappers and bottles on the floor and forgotten items stuffed into the back seat? It's likely the way they treat their vehicle reflects the way they'll treat their home.
  5. Reactions when discussing rules of lease qualifications: How they react when you review lease rules and requirements will say a lot. Is the individual terse or responsive, casual or engaged, or perhaps even visibly annoyed or verbally hostile with you? You don't need to settle for those who are the latter.

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5. Write a Rental Application That Protects Yourself From Terrible Tenants

At this point in the vetting process, you should already have some indication of what kind of tenant an individual will be. Application documents are not the first place you want to be gleaning this information — or the last. Instead, use them as an opportunity for depth rather than breadth.

The best rental applications will ask for the following information:

  • Full name, birth date, and social security number 
  • Applicant's current job 
  • Applicant's monthly income and proof of income
  • Applicant's supervisor and their contact information
  • Current address and proof of address
  • Rental history, typically the last two to three places of residency
  • Landlord references
  • Other character references outside of family
  • Next-of-kin or primary and emergency contacts 
  • Permission statement to run full credit and background checksy
  • Any additional informationy you may need to gather an informed renter's profile, such as pets, lawsuit history, and if they've sued past property managers.

Remember to go beyond blanket "yes" or "no" language for the majority of your questions. If an applicant skips or keeps a section blank, don't jump to conclusions. Dedicate form space for them to detail extenuating circumstances or offer explanations for things that may not look great on paper.

6. Don't Slack on Research and Rental Application Verification

Again, this tip to avoid bad renters is well within your control — actually conduct a full-scale background screening.

While at times screenings might seem alarmist and time-consuming, conducting the following background research is the only way to connect the dots with incoming tenants. It backs up their application and gives you confidence that you're renting to someone worth your time — all because you yourself have put in the time to thoroughly screen.

  • Look them up on social media: This nifty little trick isn't just for hiring managers. Landlords can learn about a person's lifestyle and what kind of renter they might be from a simple Facebook, Twitter, and LinkedIn search.
  • Income and supervisor follow-up: While it would be nice to trust the number the applicant reports, do your homework and call their employer directly. If an applicant is self-employed, a freelancer or works as part of the growing gig economy, you'll need other means to verify income. Request a copy of last year's tax returns, employment contracts, bank records or even the contact information of freelance clients so you can double check numbers.
  • Job follow-up: Does the job or company named on the application actually exist? Yes, it seems unbelievable, but we've heard some landlord horror stories. A simple Internet search should suffice.
  • Past landlord follow-up: Just as you contact supervisors, reach out to their most recent landlord or two. Keep questions open-ended rather than yes or no, and ensure you're getting a sense of the prospective tenant's personality and responsibility. Note that if the tenant hasn't rented before or has moved around a lot, that's not an immediate red flag. Just ensure you get a plausible explanation on why.
  • Thorough background check: Conduct a nationwide criminal background check either on your own or with the help of a tenant-reporting agency.
  • Nationwide eviction history report: These can be run through a number of agencies, ensuring you have the real picture of an individual's rental past, plus match the information they provided on their application.
  • Full credit report: Both the tenant background check and a full credit report can be run by partnering with a credit bureau directly or a tenant-reporting agency.

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7. Include a Two-Way Mandatory Move-In Report

Move-in reports are a great tool to further solidify trust with your tenants.

First, you'll want to conduct a private report immediately after the previous tenant has moved out. You'll thoroughly review and take note of the condition of the space, documenting relevant findings. Then, have the new tenant conduct their own report as early as possible after they settle in. Review the two reports together for discrepancies.

A mandatory two-way report achieves a few things. For starters, if the tenant balks at having to review the reports side-by-side, this could be an indication they may be challenging down the road. Second, it provides a written and binding agreement that can be consulted later in the event of property damage disputes. Third, it gives you even more time to assess their character, grow familiar with their disposition and see how they handle themselves in a situation of responsibility. All win-wins on how to avoid bad tenants.

8. Conduct Regular Rental Site Inspections

Last but not least, it is essential to set up and maintain an annual or biannual site inspection schedule.

These schedules are not meant to be intimidating or overbearing on your tenants. This is a sure way to actually discourage good tenants from applying to live in your properties. Instead, occasional site inspections are meant to bolster mutual respect for a space, both on your end and the tenant's. Most renters will understand this.

Ensure you draft and communicate your site inspection schedule with tenants immediately, then stick to it. While many landlords conduct a standard 24-hour's inspection notice, you can set yourself apart and further emphasize the responsibility you bear as a landlord by having a set inspection schedule. While under certain circumstances, landlords can enter residencies without that 24-hour notice or set schedule, these cases are rare and not something you want to operate under.

9. Partner With a Property Management Company With Experience in Tenant Relations

Finding a property management partner will not only assist you with nearly every aspect of tenant applications, screenings and lease drafting — but it will lend greater peace of mind for all parties involved.

Opt for management companies with rooted experience in the actual areas your properties are located. Geographically experienced rental management companies are generally more familiar with state and local property statutes, fair housing laws, tax codes and more, which vary by region.

You'll also want to note their portfolio of managed properties. A company with a vested history in commercial real estate, not residential rentals or single-family homes, is likely not the right fit for you. They can also provide the following services to lighten the daily load of your landlord obligations:

  • Thorough tenant screenings, including background checks, credit reports and eviction history
  • Property accounting services, from managing rental payments to municipal account payments
  • Lease preparation with accredited legal counsel
  • Maintenance and emergency repairs, ideally around the clock
  • Tenant eviction 

Manipulative individuals or those with a track record of lousy leasing habits tend to stay clear of properties with an explicit management company relationship. Since these companies offer an extra layer of procedural and legal protection, it is much less likely that a bad tenant can get away with noncompliance.

Explore proper management companies in your area to see who fits your service needs and regional expertise. In many cases, you'll wonder how you ever got by without one.

Experienced Property Management Partners and Tenant Screenings in Harrisburg, Hershey and Beyond

Landlords in Pennsylvania have enough on their plates without the added anxieties of dealing with bad tenants. Harrisburg Property Management Group understands this. For years, we've been helping property owners in Harrisburg, Hershey and other Central-Pennsylvania regions attract and retain their dream tenants — without bending over backward to do so.

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From Pennsylvania tenant screening to lease preparation drafted with our knowledgeable legal counsel, we can offer some of the state's leading compliant property management services. Contact us today to see how we can help you find the perfect tenants for your hard-earned properties.


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