It’s important, when searching for new tenants for your rental properties, to select from applicants who meet quality standards. You want applicants who can afford your rental property and who will keep it in its best condition. In this article, we’ll take a look at ten of the biggest red flags from prospective tenants and how to avoid them.
Tenants with Bad Credit
Low credit scores can indicate that applicants don’t make the best decisions with their finances, which could, in turn, affect your finances. A low credit score could mean they owe not only you, but other people, a lot of money. If they can’t pay their rent, then your time and efforts have been wasted. Revitalize Reality accepts a minimum credit score of 525. Anything below that would be considered unreliable and too volatile for our standards. This process also uncovers any large debts and/or history of bankruptcy.
We want to be sure that our applicants can support themselves, pay rent on time, and adhere to the terms of the lease. Which is why we don’t allow...
...Cosigners
Having a trustworthy friend or family member cosign for an applicant may sound like an extra layer of protection, but it actually raises more mini red flags than it’s worth. The applicant may have some baggage they’re carrying into your rental space that could result in behavioral issues. The cosigner, while well-meaning, probably wouldn’t be living in the rental space with the applicant, and therefore wouldn’t be able to oversee how the property or the other tenants were being treated by the applicant (Bay Property Management Group).
The biggest risk you run with a cosigner is that your rent money is not guaranteed. Sure, we know the cosigner can afford to pick up the slack of the tenant, but will they? If the applicant skips out on rent, what kind of troublesome legal battle would the owner then face to get the rent payment? Due to these inconsistencies, Revitalize Realty doesn’t accept cosigners for any of our owners’ properties. When screening applicants, the focus should be on the individual who is applying to live within the space you’re providing.
Applicants with a Criminal Record
When screening applicants, it’s crucial to have a criminal background check done. Revitalize Realty will not accept applicants with any charges on their criminal record greater than a misdemeanor or a moving violation.
These prerequisites are in place to protect property managers, landlords, and other tenants. Safety and comfort in a rental property are essential for renters, and no applicants should be considered qualified if a background check reveals major drug charges, domestic violence charges, or any violation of child support or alimony.
Under the Table Tenants
Cash-only payments are unreliable, untraceable, and undocumented. We need to see current pay stubs, four week’s worth, to be exact. As a landlord, you want to make sure that your rent money is coming from a verified source to ensure the consistency of those payments. If you’re advertising your rental properties to tenants looking for workforce housing, these types of tenants should be able to provide pay stubs from a steady job. Which leads us to…
...Gaps in Unemployment
We ask for four weeks of current, dated, pay stubs to ensure your new renters have stable income. The goal is to sign on great tenants who stay in your rental property for as long as possible. It’s important to have these stubs verified with the company’s official letterhead or logo and for the paperwork to have consistent information for the prospective tenant (Apartments.com) to rule out any possibility of counterfeit. Ask your applicant to provide references as a way for you to verify employment!
Unverified References
Calling tons of people listed as references on the applications of your renter candidates can seem like a daunting task, but getting verified references for your applicants is a must. It’s recommended that property owners contact, with the applicant’s permission, a previous landlord, their current employer, and their current landlord, to verify not only their employment but also what kind of renters they are (Rent Prep). References should be professional, rather than personal, in order to get the most reliable information concerning your applicants.
Personal references don’t tend to yield adequate results. Most of the time, friends and family will vouch for the applicant, regardless of their history. This is also another reason why you don’t want cosigners.
It’s advised to ask for contact information from a previous landlord because their current landlord may not be truthful if the applicants are a problem for the current landlord (Rent Prep). By digging a little further back, you can be sure to get a more accurate report on the overall character of your applicants.
When verifying references, you can also check in for…
Previous Evictions
This one is big. We don’t want to sign new tenants with a track record of evictions. Revitalize Realty will not accept applicants with any prior evictions, even if the applicant was only a cosigner on the previously evicted lease.
Evictions take a long time and are expensive. It can take three to four weeks for an eviction to finally be completed (Smart Move). That’s a long time spent on trying to remove a tenant that should have been screened properly before signing a lease. It makes more sense to check for a history of evictions before the applicant becomes a tenant to save yourself time and money.
Although the total cost of an eviction varies state to state, the average eviction will cost a property owner between $4,000 and $7,000. This includes legal fees, court costs, and any lost rent money or expenses for property damaged (BiggerPockets). This can all be avoided by reaching out to the applicant’s references during the screening process.
Once again, our objective is long-term tenants with good renting history. Which means we don’t want applicants with…
Prior Renting Delinquencies
Has this applicant been late with rent in the past? This red flag is something you want to bring up with the applicant’s references. Paying rent late is still technically a breach of the lease, and you want to be sure you won’t have to call your tenants to find out where the rent payment is every month.
Along with late rent payments, be sure to ask questions concerning the overall behavior of the applicant in the previous landlord’s space. Ask about damages to the property, noise complaints, or any other sort of suspicious activity. Really use those references to get a good feel for the people you’re screening, their input is an invaluable resource in determining whether this applicant is right for your rental property.
Outstanding Collections Records…
Obviously we can’t allow any new tenants with outstanding collections from other property owners, that’s definitely bad for business. We also don’t want tenants with collections from other major lenders, such as vehicle loan repossessions, utility companies, taxes (federal or state), or child support / alimony. If the applicant has paid off collections, the collections account must be over two years old, with the exception of hospital bills.
Non-valid or Non-US IDs
Our property management company requires applicants to be a US Citizen or to have legal residency with approved documentation. For US Citizens, a valid driver’s license (i.e. one that hasn't expired), a valid US passport, or a government issued ID card are acceptable forms of proof of citizenship. For non-citizens with legal residency, you will want the applicant to provide a government issued document such as a naturalization certificate or a permanent resident “green” card (State of Connecticut DMV). These are considered acceptable for non US citizens and can be verified by the US government if a property owner thought the documents could be faked - that goes for US citizens as well.
At The End of the Day
The screening of new applicants is lengthy, and perhaps tedious if you’re not the biggest fan of making phone calls, but the process is worth the security it provides. Taking the time to screen applicants thoroughly dramatically reduces the chances of having to go through even lengthier, and even more expensive, processes of removing tenants who decided not to adhere to the leasing agreement.
Although the red flags we’ve discussed here seem to encapsulate the negatives of what it means to be a property owner, they really are actions taken with the best intentions. Owners are running a business, after all. Being aware of these warning signs and what they could mean for your business can make all the difference between a profitable property ownership and an absolute nightmare ending in court costs and evictions.
That’s why the screening standards at
Revitalize Realty Property Management Company are incredibly thorough. We understand the value in keeping quality renters in your rental properties. We will make sure you find the most reliable tenants for your rental properties, in a way that makes the process easiest for you. Hiring Revitalize Realty makes the process smooth and enjoyable for everyone involved.
If you’d like to download a copy of our Red Flag Checklist, please check out the PDF button at the end of this post!
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