Renting to College Students: Landlord Dos and Don’ts

Posted by Teresa on July 14, 2009 under Landlord Tips, Tenant Credit Checks, Tenant Screening & Background Checks | icon: commentBe the First to Comment

college-students on Tenant Screening BlogIn a college town, chances are you could fill your rental properties with students if you chose to. What are the advantages and disadvantages of leasing to college students? What should you look out for?

Students can be good tenants, or bad tenants—just like the rest of the population. They are also willing to pay top dollar in many cases. If you are clear with college students and let them know your expectations, you can be a successful college student landlord!

Since the new school year is coming up quickly, here are some Dos and Don’ts for considering student tenants:

1. Do make sure you have an iron-clad lease. Have a lease or real estate attorney draw it up for you.

2. Do specify that each individual tenant is responsible for the entire rent. Then, if one moves out, the remaining roommates cannot claim they don’t that person’s share.

3. Do remember that the security deposit won’t cover the potential damage that can be done to your property. Make sure the lease assigns responsibility for damages and losses.

4. Do consider the extra maintenance or repair costs when establishing your rent. Repainting, and replacing carpet and more often, as well as repairing damages, should be considered standard operating procedure.

5. Do specify noise restrictions in the lease. College students like to party, and even small gatherings can become out-of-control in no time at all. Let your prospective student-tenants know that if the police are called to your property due to noise complaints, it is grounds for eviction.

6. Don’t allow “squatters.” If your tenants want to have overnight guests, enforce a 7-day (or however many you deem reasonable) limit.

7. Do specify lease dates: is the lease period for the school year or for a 12-month period? Students might think “one year” means August – May! Be sure the tenant knows the number of months they are responsible for paying rent.

8. Don’t allow anyone who is not on the lease to live in the rental unit. Period. You have no protection against their actions if they have no binding lease agreement with you.

9. Do prescreen all applicants to verify employment history, criminal history, and credit history.

10. Don’t allow the students alone to sign the lease. Require co-signers, such as their parents, and conduct proper credit screening on co-signers, as well—before you offer to lease your property.

11. Don’t hesitate to call the co-signers/parents at the first sign of trouble.

12. Do keep the communication open with your tenants—if they’re late, follow up immediately, from day one, to break bad habits. And, if they’re respectful, clean, and quiet (hey, it could happen!), let them know you appreciate it.

13. Do check your local zoning laws for maximum number of residents allowed in a housing unit—but if you follow suggestion #1, your lawyer will know for sure!

Landlord RAQ (Randomly Asked Questions)

Posted by Teresa on July 10, 2009 under Landlord and Tenant FAQs, Tenant Credit Checks, Tenant Screening & Background Checks | icon: commentBe the First to Comment

raq-image on tenant screening blogFrom time to time, we get a handful of rental property-related questions that concern many landlords—but don’t fall neatly into any category. We hope you find one or two that you’ve been wondering about, too!

Q: My rental unit has a jetted tub. If it breaks, am I responsible for repairing it—or replacing it with the same type tub?

A: You might want to consider adding a clause in your lease agreement that states the jetted tub is as is; the tub itself will be maintained for bathing purposes; however, if the jets malfunction, they will be repaired at your discretion only.

Q: I live in a city where only the owner of the property can be billed for the water and sewer service. How can I handle this with my tenants? I’m afraid they’ll run up the water bill, since they’re not paying it.

A: Your lease can state that you will pay for a certain amount of the water and sewer, based on average rates in your area. The lease can require the tenant to pay anything above that amount, to be included with the following month’s rent.

Q: Is it necessary to prescreen tenant applicants if they were referred by a good friend of mine?

A: Not only is it necessary, it is the most important thing you can do to protect yourself, your other tenants and the neighborhood residents. You need the peace of mind that a professional credit and background check will bring you. But just as important, if you don’t follow consistent procedures for each applicant, you could be accused of discrimination. Apply the same rules and follow the same procedures on every single tenant applicant—no matter who recommends them!

Q: What’s the absolute most effective way to advertise my for lease property?

A: Landlords we talk to say that good signs in the yard or window, visible from the street, plus an ad with photos on Craigslist.com, are the two best ways to advertise. Do beware of scams on Craigslist—read the warnings posted on the site and don’t allow anyone you have not personally met send you a check to hold a rental—many scammers operate like this.

Q: What should I do to make my rental property appealing to high-quality tenants?

A: Give your rental the best curb appeal possible! Get rid of unsightly trash, hide the trash cans, trim shrubs and low-hanging branches, and plant some new flowers. Repair any broken windows or screens, and paint the trim if it’s needed. A bright color for the front door is a great way to make the property pop!

Q: How do I know when it’s time to hire a property management company?

A: If you no longer enjoy or have the time to spend on property maintenance, dealing with tenant questions and problems, and finding new tenants, you should research property managers. Base your decision on the out-of-pocket expense; if you decide your time and peace of mind is worth more than what you’ll pay the management company, give it a try!

Rejecting a Tenant Application

Posted by Teresa on June 18, 2009 under Fair Housing Act, Screening and Background Checks, Tenant Credit Checks, Tenant Screening & Background Checks | icon: commentBe the First to Comment

Rejecting Tenant ApplicantWhat are your risks when considering applicants for your rental property? Even in these tough times, you cannot approve every applicant. It’s important to know your parameters when you must reject a potential tenant.

The federal Fair Housing Act prohibits discriminating against tenants on the basis of race, religion, sex, disability, or national origin. Some states have laws making it illegal to discriminate based on sexual orientation or marital status.

Of course there are legitimate reasons to turn down an applicant. Just be sure to document your process thoroughly and to be fair and consistent with each applicant—so you are well prepared if you’re ever accused of discrimination.

Here are some legitimate reasons to turn down a rental applicant:

Income level: It is legal to use a prospective tenant’s income as a basis to approve or reject their application. Be sure to check the income of all tenants on the application to avoid any potential problems.

Bad Credit History: Prior bankruptcies or low credit score are objective criteria for rejecting tenants.

Exceeding Occupancy: You do not have to rent to a family of six applying to rent your one-bedroom apartment.

Inadequate Rental History: You may require a reasonable number of positive rental references, and reject an applicant based on a negative reference from a previous landlord.

Past Eviction: If an applicant has ever been evicted, you may reject the application. However, if he or she won an eviction lawsuit brought by a previous landlord, you cannot hold the lawsuit against them.

Criminal Record: If an applicant has been convicted of a crime, it is probably enough reason to reject their application. Take care, however, to make a distinction between an arrest and a conviction.

Pets: If you do not allow pets in your rental unit, you may reject a pet-owning applicant. However, be aware of how the Americans with Disabilities Act (ADA) views therapy pets. You may have to make an exception to your no-pet rule to accommodate a disabled tenant.

As always, staying consistent with procedures is extremely important—especially when considering whom to approve or reject as tenants. Keep your paperwork in tip-top shape, and follow the same process with each applicant. Favoring any person or type of person over another is a lawsuit waiting to happen.

Your best practice is to run credit and background checks on each applicant. Screening tenants is quick, easy, and inexpensive—and it could potentially save you thousands in legal fees. Use the facts—just the facts—to determine whether or not you approve an applicant.

How to Write an Effective For Rent Ad

Posted by Teresa on May 26, 2009 under Landlord Tips, Marketing for Landlords, Screening and Background Checks, Tenant Credit Checks, Tenant Screening & Background Checks | icon: commentBe the First to Comment

 

pencil-and-paper on tenant screening blog

When it comes to written communication, the “Two Cs” should be top-of-mind: Clear and Concise. This is particularly important when composing an ad for a rental unit. Follow these steps to an easy, effective ad:

1. Attract attention. Make your newspaper ad stand out by adding a border or bold headline. On Craigslist, the descriptor is short, so use creative language: “Amazing house in Oak Tree neighborhood,” “Best $500 apartment in town,” or “Hardwood floors, 3BR, super-quiet” are all ways to capture attention quickly.

2. Be clear.  At a minimum, list the number of bedrooms and baths, the neighborhood, parking information, and the monthly rent. State that you check previous landlords, criminal background, and credit history. You can eliminate unqualified tenants easily with a well-worded ad. 

3. Use photos. A picture is truly worth a thousand words. A photo can instantly tell a prospective tenant whether your rental property is the right place for them. 

4. Don’t skip the details. Do you include utilities with the rent? Say so! Are you okay with pets? Put it in the ad. Are you completely against smoking in your rental home? Tell us! Tell readers about the schools, whether a grocery store is close by, and all about the beautiful landscaping. Brag about your place, and you’ll get enthusiastic responses. You want the most qualified tenants to act upon finding your ad. 

5. Make it easy to respond. Put your primary phone number in the ad, as well as an email address. For Craigslist ads, all responses will be through the site’s secure email unless you add a telephone number in the ad. 

6. State a good time to call. You can certainly list what time you will accept telephone calls from prospective tenants. And if a call is made outside that time, the caller either didn’t notice, or didn’t care that you requested otherwise. It’s a good screening mechanism to find the tenants you’ll get along with best.

An effective ad is the first step in prescreening tenants. You can eliminate the ones you don’t want and attract the ones you do by being clear, descriptive, and detailed in your newspaper or online For Rent ad.

For more landlord resources, including everything you need to know about tenant screening, turn to E-Renter.com. You’ll know that you have the best possible tenants when you prescreen tenants.

Rents Falling, Tenants Moving

Posted by Teresa on March 31, 2009 under Housing Trends, Landlord Tips, Tenant Credit Checks | icon: commentBe the First to Comment

 

Falling Prices no Cause for Panic

Falling Prices no Cause for Panic

The heated rental market of the past few years is definitely over. Rent increases followed housing price increases to unsustainable levels. Reports from around the country show that rents continue to fall.

In New York City, the biggest drop, 8% over last year, was in the category of studio apartments in doorman buildings.  In a city like New York, where rents are excessively high when compared to the rest of the country, that’s significant. Renters in NYC are used to numbers like $3,395 for one-bedroom apartments with a doorman (but you can lose the doorman and pay only $2,632).  It’s a tough, competitive market—but people are finding more rental deals than ever right now.

Renters who signed leases at the height of the bubble are more interested in investigating their alternatives—including moving—than before. Most folks are not willing to pay more, but they are looking for—and finding—similar properties for less money.

Other renters are downgrading to cheaper properties just to save money.  With job security at a new low for many working people, the opportunity to save several hundred dollars a month only makes sense.  Thrift is in, and the ability to sock away money in savings appeals to people who never considered it before.

What could this mean to landlords and property managers? Expect to work a little harder to secure and keep good tenants. It’s a renter’s market, but there are still good, solid tenants looking for rental properties. Make sure your property is in top condition and advertise it well.

In this market, current tenants might ask for rent reductions at lease renewal time. To avoid reducing the rent, think creatively of other ways to keep them. Perhaps you can pay for certain utilities, or upgrade the cable package. If you have a vacancy elsewhere, upgrade a good tenant to a nicer property.  A fresh coat of paint or new carpet could be perks a tenant would stay for.

Some landlords, desperate to keep properties filled, are accepting tenants with bad credit. This “I’ll take anyone” approach is a mistake. Tenants with bad credit could cost you much more money over time than you’ll lose by waiting for a solid tenant. And in this economy, a low credit score is likely to get worse, not better. There is no better time to thoroughly check your prospective tenants’ backgrounds and credit histories.

The rental market will swing back up again. Rents are often tied to jobs, and when job numbers increase again, look for signs that rents are on the increase.  Until then, be patient, don’t panic, and plan carefully. Consider new ways to keep your properties leased; be open minded to new ideas and to all requests from your tenants.  But remember, you are under no obligation to let tenants out of a binding lease, just because they can rent somewhere else for less.

For more landlord resources, including everything you need to know about tenant screening, turn to E-Renter.com. You’ll know that you have the best possible tenants when you prescreen.

Renewing Leases

Posted by Teresa on March 7, 2009 under Landlord Tips, Tenant Credit Checks | icon: commentBe the First to Comment

Renewing Leases E Renter.com

Finding great tenants is a big job. So when you have them, you want them to stick around. If you’re renewing leases, it’s good sign that both parties are satisfied. Avoiding tenant turnover can yield significant cost savings—no major repairs or painting, cleanup, or advertising for new tenants. So, if you have a good track record with a current tenant, and you’re both happy, do what you can to renew the lease, and save yourself time, money, and trouble.

Communication is Important
There is no standard lease renewal process. Most leases are for a specified period of time; if there is no language regarding renewal, the lease expires on the date indicated, and your tenant is free to move out. In this situation, you’ll want to approach your tenant at least two months ahead to inquire about his or her plans. If you want your tenant to stay, make sure they know it! Of course, you have no obligation to renew a lease.

Renewal Language in a Lease
Even better: why not cover yourself and spell everything out in writing? Then, everyone knows what to expect. Your rental agreement or lease could include a “renew by” date, usually 30-60 days prior to expiration, by which your tenant must inform you if they are NOT renewing the lease. If they do not, it is assumed the lease will be extended. You can specify in the lease whether the renewal is for the same time period and under the same terms, or if it is month-to-month or some other length of time.

Be a Good Landlord
It doesn’t hurt to check in on your property regularly—and to check in with tenants when the lease is coming to its end. There may be a repair job needed, or a small upgrade you can provide to entice your tenants to stay. If you care about your tenants, make sure they know it!

Renew the Credit Check, Too
It’s a good idea to recheck a tenant’s credit when renewing the lease. Be sure you are in compliance with the Fair Credit Reporting Act if you do.

Checking Tenant Credit and Criminal History

Posted by Teresa on March 5, 2009 under FCRA Issues, Tenant Credit Checks, Tenant Screening & Background Checks | icon: commentBe the First to Comment

Be Certain Your New Tenants are Credit Worthy

 

Steering Clear of Problem Tenants
Managing rental property is no easy task. Why make it harder than it already is? After all, your properties are only as easy to manage as the tenants who live in them. Employing best practices consistently on each and every rental is the key to managing income property smoothly—and avoiding discrimination issues, too. One way to avoid trouble is to check potential tenants’ credit and criminal history.

Is it Legal to Check a Tenant’s Credit History?
Absolutely. Renting property brings monetary and legal risks to the property owner. You need to mitigate risk wherever you can, and checking credit history is a great way to do so. As part of the rental application, your prospective tenant can agree to a credit check with a signature. You’ll know for sure if the applicant is a good risk—or one to stay away from. Even a tenant with a great credit history can miss paying rent on time—but again, the idea is to lessen that risk by choosing the best possible tenant.

Remember that all information you learn from a credit report must be held in strictest confidence, and never shared with third parties. Your applicant may have a right to the report—check your state’s guidelines and the Fair Credit Reporting Act (FCRA) to be sure you are compliant. If you reject an applicant for credit reasons, you must advise them in writing. Consider having a reputable, professional tenant screening service handle your background screening to ensure you are within the guidelines of the FCRA.

What Will a Tenant Screening Credit Check Tell Me?
The credit check will reveal how promptly the applicant pays credit cards and loans, plus any outstanding judgments or bankruptcy filings. Look for a good record of responsible finances, and see if the applicant appears to be living beyond their means. Conservative spenders will be more likely to survive an emergency or job loss without major upheaval—like breaking your lease agreement.

The credit check will also reveal previous addresses—compare these with the application and investigate any inconsistencies. There could be a simple explanation—or the prospective tenant could be hiding something.

Is it Legal to Check a Tenant’s Credit History?
While you don’t have a legal duty or obligation to do so, you may certainly include criminal history in your tenant screening process. Keeping your property, other tenants, and yourself safe from potential damage is well worth it. These reports typically cover records at the county or national level; different reports are available in different states. Check with a professional tenant screening company for details.

The important thing to remember is to be consistent: screen all applicants in the same way, each time. Making an exception could be reinterpreted as discriminatory—and it could literally open your doors to potential problem tenants. A clear policy of running criminal background checks on all applicants is the best protection for you, your other tenants, and the community.


Next Post: Renewing Leases

Should You Pre-Qualify Tenants?

Posted by Teresa on February 14, 2009 under Tenant Credit Checks, Tenant Screening & Background Checks | icon: commentBe the First to Comment

The perfect tenant might not exist, but there are plenty of good, even ideal tenants out there. You know them—they’re clean, quiet, and pay their rent on time, every time. How do you sift through the prospects and make sure you’re renting to the one of the good ones? It’s simple: take the time to pre-qualify tenants.

Five reasons why you should pre-qualify tenants:
  • Today’s economic environment: Don’t rent without knowing a potential tenant’s credit history. The current economy makes this essential.

  • Avoid nightmares: Even the well-employed can be nightmare tenants. A good income never guarantees good behavior, so check personal and rental references of each tenant applicant.

  • Screen out the criminals: Check each applicant’s source of income. If a potential tenant’s income source is unclear or worse, not legitimate, you do not want them as a tenant on your property.

  • Mitigate your risk: Proper tenant screening can prevent a predator from becoming your tenant and your liability.

  • Reduce tenant turnover: Know what you’re dealing with going in, so you don’t have to watch tenants move out due to liens, overextended credit, or other legal issues.

  • Remember to be thorough when pre-qualifying—require written applications from each adult who will be leasing your property.

     

    It’s easier than you think to ensure that you have the best possible tenant—before you sign the rental agreement. Decrease your headaches and your losses by pre-qualifying every potential applicant.

     

    Find landlord resources, including everything you need to know about tenant screening from E-Renter.com.

    Next post: A Welcome Package for New Tenants 

    Screening Credit and Background Information Becoming More Difficult

    Posted by Teresa on October 29, 2008 under Tenant Credit Checks | icon: commentBe the First to Comment

    As regulations are put into place to decrease fraud and to protect individual privacy, it is becoming more and more difficult for landlords to complete critical and effective tenant screening. Even property management companies can have difficulty keeping staff trained and implementing procedures to comply with the Fair Credit Reporting Act (FCRA).

    A good alternative is using a professional tenant screening service. It’s important, also, to be sure that the service you choose is reliable, accredited, FCRA trained and compliant, and has proper security measures in place.

    Also review the information provided to you in a tenant background search to make sure it covers all the information you need.

    Illegal Tenant Discrimination

    Posted by on March 8, 2007 under Tenant Credit Checks | icon: commentBe the First to Comment

    State and federal fair housing laws make it illegal to refuse an applicant rental accommodation, a rejection that is based on the grounds of race, religion, ethnic background, gender, or simply because the applicant has a disabled child. In addition, certain state and local laws forbid discrimination based on marital status, sexual orientation, or age of the rental applicant.

    As long as decisions comply with these laws and are based on legitimate business criteria, landlords have the freedom to choose from amongst prospective tenants. That is, a landlord is legally entitled to reject any prospective tenant with a poor credit history, insufficient income to pay the rent, or one, who is responsible for past misbehaviour, such as, damaging property, since business wise, such a person would be a bad risk. As well, if a landlord has a valid occupancy policy limiting the number of people per rental unit, a policy clearly tied to health and safety reasons, then again is sufficiently legal grounds for rejecting a tenant’s rental application.

    What a landlord must remember is that selection standards, such as, the requirement for a minimum income and a good credit report, is to be applied equally to all tenants.

    That apart, landlords should make themselves cognisant with all rules and regulations before drafting tenancy leases or rental agreements. They must also take all necessary precautions, such as, tenant screenings, background checks on prospective tenants, including making certain all rental lease clauses are adhered to, as insurance for a litigation free landlord / tenant relationship. A simple click of the mouse and any landlord or property manager can visit www.e-renter.com for tenant screening and background check services. www.e-renter.com, the best tenant screening agency in America!