There are an endless number of red flags that may signal a potential problem tenant. You or your manager must be looking out for them and be prepared to react to them in an appropriate manner. Remember, be alert, be skeptical, and cross check information. A few red flags:
- Refusal of a prospective tenant to completely fill out the application. It’s you job to review the application before the applicant leaves the scene and request that all information be complete. There will be tenants with wonderfully-creative reasons why they cannot do this…poor memory, a previous landlord went out of business, died, or moved out of state, an employer who’s full name they never knew, references or relatives who’s addresses and phone numbers they do not have. Ask the applicant to come back with the completed application when they have that information. Some of these reasons may actually be true, but as a professional business person, you must have the information you need before they move into your rental.
- Refusal of a prospective tenant to provide necessary documentary proof of information on the application. This includes social security numbers, car license number, and driver’s license. If you allow pets, included would be the dog/cat license, proof of vaccinations, and perhaps proof of spay/neutering.
- Inconsistencies on the application itself or between the application and something the prospective tenant has said.
- Information that, upon verification, appears to be false or inconsistent.
- A prospective tenant that appears nervous or in a rush to move in. He or she tries to dissuade you from verifying the application and encourages you to trust him. Tenants who turn out to be unreliable often use a great deal of charm in those first contacts with a prospective new landlord, mentioning mutual acquaintances, hobbies or interests in common, suggestions that they want to plant flowers or “help fix the place up.”
- An applicant without a bank account may indicate a lack of financial stability or that they move around a great deal. Most small landlords advise against accepting cash for the first month’s rent and security deposit. A tenant without a bank account can sometimes be a sign of serious problems later on. It is now becoming more common for a landlord to ask that rent be put on a direct payment plan with the bank. Landlords generally offer a 3-5% discount on the rent for direct payment to encourage the tenant to fill out the forms with their bank and make those arrangements.
- An applicant indicating he is self-employed, but provides no documentation substantiating a legitimate business (that is, business license, bank account paperwork, business address, a tax statement in that business name). Business cards are easy to have printed and should not be considered documentation.