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Six Tips for Avoiding Problem Tenants

Owning investment properties is an excellent strategy for building wealth and creating cash flow, but many would-be investors shy away from rental properties because they don’t want to deal with problem tenants. This is unfortunate, because there are several steps you can take to minimize the likelihood of renting to a problem tenant and eliminate much of the headache of rental property ownership. Of course, the easiest way to eliminate the headache is to outsource the work to a Fort Lauderdale property management company, but you can absolutely do it yourself if you prefer to be more hands on. If that sounds like you, here are six tips to get you started down the road to healthy, hassle free tenant relationships. 

1.) Ask for references. More importantly, check the references!

Your rental application should include a section for at least three references. This should be required. If your applicant refuses to supply references, that should be a red flag in itself. Additionally, they cannot be any old reference. A minimum of two of these references should be the applicant’s two most recent landlords (i.e. their current landlord and their previous landlord).  

All too often, we hear stories about landlords who collected references but never bothered to take the time to follow up. In our experience, it is not uncommon for applicants to provide false references or inaccurate contact information. Therefore, it is critical that you actually take the time to call the references and confirm that they all check out. 

2.) Run a credit check. 

Make sure to run a credit check on every applicant you are considering for your property, and be sure to notify the applicant and secure their permission to pull their credit history before you do it. Pay attention to the applicant’s FICO score, history of late payments, outstanding collections, and past bankruptcies. 

Generally speaking, applicants with FICO scores in the mid- to high-600s and above make the best candidates, but it’s important to treat everyone fairly and dig in to each applicant’s credit history. Outstanding collections should be judged on a case-by-case basis. For examples, collections for unpaid utilities bills should be a bigger concern than collections for unpaid retail credit such as a Nordstrom store card. At this stage, you should also be verifying the total amount past due on any late payments. Also be sure to check for unpaid or active tax liens—most credit reports will include this in a “Public Records” section of the report. 

3.) Verify income and proof of employment. 

Cross-check the provided proof of income with the declared income on the applicant’s application. Acceptable proof of income might include official pay stubs, W2 forms, social security income stubs, tax returns, and bank statements showing regular deposits from an employer. 

If your applicant works in a cash industry (e.g. bartending), be sure to contact the employer directly. You can also ask the applicant to submit a letter from his/her employer with the employer’s name, address, phone number, and a statement of the applicant’s on-the-books and off-the-books income. 

The verifiable income should approximately match the applicant’s declared income. Be wary of applicant’s who lie about their earnings in an effort to make their application appear stronger than it is. 

4.) Check social media.

It’s always a good idea to Google your applicants and check out their social media profiles. is a great resource for searching Instagram and Twitter. Make a note of anything that is suggestive of potentially destructive behavior, including excessive drinking, partying, smoking, drug use, etc. Also make a note of any undisclosed pets or large animals. 

5.) Conduct a criminal background check.

By law you cannot reject an applicant due to felon status alone. However, an applicant can be rejected if he/she committed a felony within the past seven years. If the felony occurred prior to the last seven years, then you may wish to dig deeper in your screening of the applicant. Violent and sexual crimes should raise a red flag, as should applicants who have been recently charged with the sale, manufacture, distribution, or intent to deliver drugs. 

Minor offenses, such as a single speeding ticket or parking ticket, may be overlooked. However, serious traffic offenses (DUIs, reckless driving, driving without insurance, driving without a license, etc.) or numerous repeat offenses may be cause for concern. 

6.) Verify your applicant’s identity.

It may sound obvious, but don’t forget to verify your applicant’s identity. This is as simple as obtaining a copy of their driver’s license, passport, or other government issued photo identification. If the tenant is unwilling or unable to provide proof of identity, then move on to the next one. 

Managing rental properties can be difficult enough without having to worry about problem tenants, so try to simplify your life by thoroughly screening every applicant. Remember, it’s always easier to manage a vacant unit than a nightmare tenant, so don’t just accept the first applicant who comes through the door. If you’re not confident screening tenants yourself, then consider hiring a local Fort Laurderdale property management company.