1. Skip to Menu
  2. Skip to Content
  3. Skip to Footer

Why Would You Give The Keys To Just Anyone?

Veteran real estate investors know you make money when you buy the property.  The meaning, of course, is if you pay too much for the property, or your due diligence is sloppy, it's going to cost you.

Successful landlords know you make money in the rental business when you select your tenant.  If you fail to do your due diligence it can cost you thousands.  So, why is it that most landlords -- I mean the vast majority -- do little or nothing to verify the information given to them by rental applicants?

Think of a former tenant who cost you plenty.  Now, go back to the day of the rental interview.  Knowing what you know now, would throwing $500.00 in a trash can be a better investment than renting to that person?  If yes, then what is the lesson?

The most frequent excuse for skipping effective tenant screening is: "I'm a good judge of character."  Here is what I have learned: The worst tenants are the best liars.

Take the case of landlord Tom.  Not long ago, Tom interviewed a man named Elliott who wanted to rent one of his homes.  The two hit it off right away.  Elliott told Tom how he'd lost his job last year and his wife left him for another man soon after.  Despite all of his troubles, today he has a good job and is back in church where he should have been all along.

Tom was so impressed with Elliott's situation that he wanted to be a help.  Elliott got the keys to the house the same day and Tom was delighted to have a tenant with strong morals and a good work ethic.

Tom knew he should verify Elliott's background, just to be sure.  The application indicated that Elliott had lived at only one other home in Florida during the past 5 years.  The question: "have you ever been arrested"? was checked "No".  Tom asked that we do the usual background checks.

(Editors Note: At the time this article was written, criminal histories were only available on a state-by-state basis.  Today, a National Criminal History includes every state.)

Most tenants don't know that we can obtain their residential history.  Elliott's report indicated he'd been living in Georgia for some time.  His Florida criminal record was clean but I told Tom he should check Georgia.  He swallowed hard and said OK.

The twelve pages of criminal history which followed included things like two separate 5 year prison terms, extortion, felony domestic battery and grand larceny.

The short version of a long and dangerous story is it took Tom two months to get Elliott out of the rental.  Tom never received a penny from Elliott other than the first month's rent and a small deposit.  Worse, Elliott's attitude changed from angel to demon as soon as Tom told him why he had to move.  Tom was scared.  Eventually, a Judge said he had to go and today Elliott is renting from another landlord who didn't verify Elliott's story (He probably thought he was a good judge of character.)  I hope it isn't you!

Obviously, Tom could have avoided this mess if he had verified Elliott's application BEFORE giving him the keys.  However, effective tenant screening begins long before the application and interview.  No matter how you advertise your rental property the purpose of your advertising is to make the telephone ring and effective tenant screening begins with that phone call.

You should follow a well crafted script every time someone inquires about your rental (Click here to view sample).  Tenants who have a bad rental history or a criminal history need a place to live just like everyone else.  These characters know they can't rent from large, well managed apartment communities because they always check references.  So, who are they looking for?  They are looking for a nice couple with a cute home to rent.

These guys know how to carefully listen during the phone call.  Not only are they a good judge of character but they have nothing to loose.  If you discover their past they just move on to the next guy.

There's another reason to use a script.  While landlords are afraid they will get stuck with a bad tenant, good tenants are afraid they will get stuck with a bad landlord.  Good tenants listen carefully to you during the telephone conversation.  They like to hear the voice of a strong manager who checks references.  When the bad guy hears it he ends the conversation and calls the next landlord.  When the good guy hears it he hopes he's found a decent landlord.

Would you like to avoid bad tenants?  The initial telephone conversation is your first line of defense.  If the bad guys detected that you are a good manager and they won't bother to call you back.  That's because they are looking for a landlord who thinks he's is a good judge of character.


Paul Howard is the President of The Florida Landlord Network
He may be reached via email at: This email address is being protected from spambots. You need JavaScript enabled to view it.
Website: www.FlaLandLord.Com