Property Managers: How to Avoid Being Stuck with Bad Renters

There are some basic rules when it comes to leasing or renting out your property. All landlords are looking for the magic key to avoid getting bad tenants and sometimes even the best of you get fooled. When looking for good tenants follow these simple guidelines and hopefully you will never have to worry again:

1. Hire a Realtor or Broker to rent your apartments out. The Broker will place a sign in your yard, indicating the home is being managed by business class people not "Mom and Pop" owners. You would be surprised how this one sign can turn many potential bad renters away. It seems like bad renters avoid any type of rigorous checking. They can con the best of you and so by spending a little money, you save yourself some problems.

The Broker's job is to run a credit report, take a full application on the prospective tenants, notarize the lease agreements and check the job and references out. The Broker is being paid to protect you and in most cases the Broker will bring you the best tenants. A Normal fee to hire a Broker to rent out your unit is 50 percent of the rent, but this is negotiable. 

2. Look at the person and the references very closely. Many people are able to con even the best person, so look at them very closely. Notice the clothes they wear, their shoes, their jewelry especially and also the references. A person who uses a doctor or lawyer for a reference is better qualified than a man who uses a man who works at a burger joint.

3. Look at the rent to debt ratios. The bank looks at a ratio of 28-33%. If the prospective tenant has problems with his credit report and has high rent to debt ratio, this is a red flag. Of course there are always reasons why a person is in default or has collections, but listen to the explanations thoroughly and question why they have not bothered to correct their credit report.

Correcting your credit report is not that difficult. There are many agencies that correct credit reports for a fairly reasonable fee. The tenant themself can dispute credit defaults. If the tenant shows no intention of trying to correct his collections or defaults, refuse the tenant. Feeling sorry for someone can lead you right to the "Poor House."

4. A really simple thing to do is to run an Internet check on the person's names. If his name is Tom Jones, google Tom Jones and see if you see anything suspicious on him. The Internet has more information than most people can imagine.

5. Make sure if you hire a Realtor, that the Realtor checks prior residences. Talking to the prior landlord is a good thing to do. Sometimes the prior landlord will cover for the person, but many times they do give hints and warnings to watch out for.

In the end, talk to the tenant one on one and look at their eye contact. Look for well kept clothing, polished shoes, children being kept very tidy, etc. These things can appear to be minor, but in the end it is all you have to go on. Gut feeling sometimes will give you more insight into a person's character than a three page application.