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Warning Signs Of a Potentially Bad Tenant

July 5, 2020

Every landlord wants to have a fantastic tenant; your rental investment is one of your most valuable assets after all.

Whether you’re planning on managing the property and tenancy yourself or you have an agent looking after it for you, as a landlord you still need to cover your bases to make sure that the tenant you have in mind is a friendly, responsible and honest person. Is the tenant listed on a national tenancy database like TICA? Or are they a reliable, trustworthy person?

No landlord wants to have problems with their tenants, and the process of finding a good tenant begins with the interview process. There are certain personality traits and comments you need to be aware of. The last thing you want is if the tenant refuses to leave at the end of the lease!

Check out some of the common signs listed below to help you filter out the good from the bad and find the perfect tenant without too much trouble.

Lying on their application

Your real estate agent will have their own professional process for screening applicants, but if you’re doing it yourself this is where the importance of a thorough tenant check comes in.

You cannot take a tenant’s word and not cross check their application because they seem good on paper. You could be setting yourself up for disaster.

Ensure you follow up on their rental history and get in touch with several referees.

Low income earners

You need to make sure that the tenant can afford the unit – will their weekly income cover the rental cost as well as their cost of living and other expenses?

As a general rule, rent should account for about 30 per cent of a person’s net income. Anything greater than this can lead to rental stress and a higher chance of arrears.

Past addresses

If someone has had three or more addresses in the past five years, you may want to avoid them, or at least consider their application carefully.

While some personal circumstances and situations may have called for the moves, a tenant who doesn’t stick around for long may hinder your profits if you need to pay for more advertising and getting a new tenant in in the not so distant future.

Debt or bad credit

If they have a lot of debt (credit cards, store cards, car loan) this could pose a problem as paying rent on time might not be your tenant’s top priority.

A credit check is also a great indicator of whether a person is a good renter. A low score often means this person doesn’t pay their bills, or if they do, they don’t pay them on time.

Hagglers and pushiness

Believe it or not this happens way too often. Most rental properties are in line with the going rate, so there’s rarely ever any room for negotiation. It’s ok if someone tries to get a reduced rate on the off chance, but when they relentlessly try to haggle, it’s often a warning sign.

Being impatient or too pushy should be red flagged. Be wary of potential renters who give you a big sob story and keep pushing you to let them move in straight away – they may be trying to get you to fast-track their application and overlook something they are trying to hide.

A good tenant knows there is a process to follow, and will wait their turn.

Bad references

This goes without saying, if they have copped a bad reference from a real estate agency or a private rental agreement, don’t even consider that rental application. Be wary of too-good-to-be-true references, and don’t take references on their face value. Always check.

Previous evictions

If you come across an eviction notice it can certainly raise a big red flag. If they have broken one lease they might break another.

The search through a tenancy database by your agent should reveal obvious problems in your prospective tenant’s rental history, such as sloppy payments, major damage, and situations where a share house has gone drastically wrong.

Employment

You want them to prove they have had a steady background of employment. Watch out for large employment gaps and question why – there is most likely a good reason, such as long-term travel, but it’s always good to ask.

First time renters

This can be tricky, because they will have no rental history or rental references, and they will likely have been living at home until this point. Check and double check personal and work references, credit and debit checks, and if no other red flags come up – go for it.

Late arrivals

When tenants turn up significantly late to a viewing and don’t even acknowledge their tardiness or provide an apology or reason – be warned. It’s rude and unprofessional and speaks volumes about their personality.

Appearance

If you meet a sloppy person and whose personal hygiene is poor, it’s safe to say if they can’t take care of themselves, they certainly won’t take care of your property.

Also, lots of tenants lie about their smoking status during viewings. But if you can smell it on them, they probably are a smoker.

Every landlord wants a hassle-free tenancy period over a number of years, and a tenant who will love your investment like it was their own home. Avoid those red flag candidates and move on to those applicants who have a proven record of social, financial, and long-term stability.

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