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As a landlord, one of the biggest challenges you may face is dealing with problematic tenants, especially those commonly referred to as "professional tenants."
These tenants are skilled at exploiting loopholes, manipulating the system, and causing headaches for property owners. However, by implementing the strategic measures tips we outline here throughout the tenant screening and management process, you can avoid attracting and retaining these tenants. Today, we'll explore effective strategies to keep professional tenants out of your rental property and set yourself up for a successful, long-term tenancy.
Understanding Professional Tenants
Professional tenants are not your average renters. They often possess a combination of traits and behaviors that set them apart, including a history of problematic tenancies, a propensity for rent evasion, and a knack for exploiting legal and financial loopholes. These people may have a track record of causing property damage, engaging in illegal activities, or harassing landlords and neighbors.
Some red flags will be obvious during the screening process while others are liable to fly under the radar. It’s important to develop a thorough screening process for all tenants you are considering for your rental property. By familiarizing yourself with the characteristics and tactics of professional tenants and implementing a robust screening process, you can better protect yourself from the risks and liabilities these tenants present to you and your property.
Screening and Selection Process
One of the most effective ways to prevent professional tenants from leasing your property is by implementing a rigorous screening and selection process. This involves thoroughly vetting prospective tenants in various ways such as background checks, credit reports, and references. Each step in this process is meant to evaluate a potential tenant’s character, reliability, and history. It’s important to look at an individual’s tenant criteria from many angles which means your screening process should include these central steps:
Pre-Screening Criteria
Establish clear pre-screening criteria such as minimum credit score, income level, rental history, and criminal background check requirements.
Application Form
Provide a comprehensive rental application form that collects necessary information including personal details, employment history, rental history, and references.
Credit Check
Obtain permission from the applicant to run a credit check to assess their financial responsibility and history of debt repayment.
Income Verification
Request proof of income such as pay stubs, employment verification letters, or tax returns to ensure the applicant can afford the rent. It’s standard practice to require tenants to have a monthly income that is at least three times the rent. If the tenants themselves don’t meet this threshold, you may consider allowing them to add a cosigner to the lease who would be responsible for meeting the financial obligations if the tenants were no longer able.
Rental History
Contact previous landlords to verify a tenant’s rental history, payment punctuality, and any past issues with the applicant as a tenant. This is a reliable way to get firsthand information about an individual’s trustworthiness and ability to care for a property that’s not their own.
Background Check
Conduct a criminal background check to identify any history of criminal activity that could pose a risk to other tenants or the property.
References
Contact personal and professional references provided by the applicant to gain insights into their character, reliability, and behavior outside of a tenancy.
Interview
You may consider scheduling an in-person or virtual interview with the applicant to discuss their rental application, clarify any concerns, and assess their suitability as a tenant. This step is less common among landlords but can be an effective way to gain a deeper understanding of a potential tenant.
Red Flags to Watch For
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A well-designed screening process will unearth the red flags that a landlord needs to know about before selecting a tenant. While it’s impossible to learn every detail about a potential tenant before selecting them, by understanding the main red flags to watch out for, you can be near certain that you have found a good tenant.
The main concerns to watch for are:
Poor credit history
Insufficient income
Unstable employment
Negative rental history
Criminal background
Inconsistent or false information
Refusal to provide information
Poor communication
Lack of respect for property
Overly aggressive or “desperate” behavior
Unwillingness to sign a lease agreement
Clear and Comprehensive Rental Agreements
Once you’ve found a tenant that passes your screening process with flying colors, it’s time to draw up an ironclad rental agreement. A robust rental agreement is your first line of defense against professional tenants.
Make sure your agreement is clear, comprehensive, and legally enforceable. Include provisions that address common issues such as rent payment terms, property maintenance responsibilities, and dispute resolution procedures. Consider incorporating clauses that deter professional tenant behavior, such as restrictions on subletting, unauthorized occupants, or illegal activities. We always recommend that you consult with a legal expert to ensure your rental agreement complies with local laws and regulations and provides protection for your interests and your property.
Regular Property Inspections and Communication
After your new tenant moves in and their tenancy officially begins, it’s important to maintain open communication and conduct regular property inspections. These measures are essential for preventing problems before they escalate.
Schedule periodic inspections of the property to assess the condition of the interior, exterior, and amenities and identify any potential issues early on. Use these opportunities to communicate with your tenants, address their concerns, and reinforce lease obligations. This kind of regular check-in builds a positive relationship with your tenant and encourages compliance through a shared understanding that you are aware of the goings on at your property.
Implementing Strict Rent Collection Policies
Consistent rent collection is crucial for maintaining a stable rental income and deterring professional tenants from exploiting the system.
A few best practices to follow are:
Establish clear rent payment terms and deadlines, and communicate them effectively to your tenants.
Offer a streamlined, easy-to-use online portal where tenants can pay their rent and communicate with you or your property management team.
Offer electronic payment methods and auto payment settings to streamline the rent collection process and reduce the risk of missed or disputed payments.
Consider offering incentives for on-time payments or penalties for late payments.
With clear and strict rent collection policies in place, you communicate to your tenants that rent evasion will not be tolerated. Proactive measures such as offering an online portal and electronic, automated payment methods go a step further in setting tenants up for success and discouraging non-payment.
Professional Property Management Services
If you don’t have the time, desire, or expertise to manage your rental property (potential professional tenants included) yourself, consider hiring a professional property management company. These companies have the knowledge, resources, and experience to screen tenants, enforce lease agreements, and handle tenant disputes quickly and effectively. They can also provide valuable guidance on legal and regulatory compliance, minimizing the risk of legal issues or liabilities. They also often have clauses to their services that ensure further protection for you if a professional tenant somehow slips through their process undetected, providing additional support and resources to remove the problematic tenant and replace them quickly.
While property management services are additional costs for you, the peace of mind and convenience they offer can far outweigh the expense to enlist their support. Especially when you consider the added costs that come with professional tenants!
Legal Recourse and Eviction Procedures
Despite your best efforts, you may still encounter professional tenants who refuse to comply with lease terms or engage in bad behavior. In these cases, it's essential to understand your rights as a landlord and the legal recourse available to you.
Familiarize yourself with the eviction process and the specific requirements and timelines mandated by local laws. Be sure to meticulously document all communications with the tenant in question and the lease violations, as this evidence can be crucial in legal proceedings.
If necessary, it can be best to seek legal counsel to guide you through the eviction process and protect your interests.
Conclusion
Professional tenants are a real but avoidable danger for landlords. By implementing the proactive strategies and understanding what to look for, you can seriously reduce the risk of attracting and retaining problematic tenants. From thorough screening and clear lease agreements to regular inspections and strict rent collection policies, there are many steps you can take to safeguard your rental property and ultimately, yourself.
Remember, prevention is key – invest the time and resources upfront to avoid costly and time-consuming disputes down the line. With the right approach and mindset, you can keep professional tenants out of your rental property and enjoy the rewards of being a responsible and successful landlord!
If you want professional help detecting and avoiding professional tenants, consider hiring a property management company like Evernest to manage the screening and selection process for you! Our extensive experience filling and managing properties across the U.S. means your property will be in trusted hands.
