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The Importance of Due Diligence When Choosing a Renter For a Property!

Being a landlord can be an exciting experience! It can also be headache if you except the wrong tenants for your rental, or your clients. Not only meeting the the prospective tenant face to face is important, but also doing the correct checks to make sure they are a responsible qualified tenant. When the tenant is first inquiring ask them a few questions before you show them the property. As an agent I have a few general questions that I always ask first time tenants before I move forward. Make sure to stay consistent and fair. Ask each prospect the same questions exact questions. I developed these questions when I realized every person and situation is different, and to make sure you're not wasting your time or the prospect's. Some prospects may not be right for you or your landlords rental. In the same way that you or landlord may not be right for the prospect that's inquiring. So it's best to set standards and expectations right off the bat. That doesn't mean you have to be rude or turn someone away. Just make sure from the get go that it may work for both parties and that there is complete transparency. It is quite frustrating for both parties when you get well into a transaction and come to find out that the situation may not work. We never judge anyone because, like I said, every situation is different. Just because someone may not have the best credit, or has made some mistakes in their life, doesn't make them a bad person or candidate. Everyone deserves a chance! As an agent you need to understand and sympathize with every situation. Also as an agent it's your job to take these hurdles and find a situation that works for the prospect. One landlord may require a certain credit requirement while other landlords may not. The same way some landlords allow pets and some don't. Don't turn a prospect away because of credit in particular. There are other ways to give them an edge as well. Going back to the questions I was talking about here is the list of questions I use as a landlord and as an agent, to screen potential clients. There is more that goes into screening, but here is the first step. You may need to tweak them to work for your useability! The questions as follows:

  1. How's your credit?

  2. Have you ever been evicted?

  3. How long do you plan to stay?

  4. Do you have any pets?

  5. How long have you lived in your current home and why are you moving?

  6. Are you able to afford the necessary deposits to move into the property? (Insert up front deposit costs) Requirements are: $XXXXX

These 6 questions can help you gauge the prospects situation. They can also help you rule out whether the home they're inquiring about would be a good fit for them or not. It will help you understand what extra steps or speed bumps that may need addressing. It can also help you as the agent know if this prospect meets the expectations, requirements, and standards that your landlord client or yourself has set. If the way they answer these questions seems to fit with what is desired, the next stages of the screening process can be initiated. I know we'd all love to trust everyone. But it is still important to do a credit and background check. It is a must! You'd like to give people the benefit of the doubt and trust they're being honest. In reality that isn't always the case. If you continue to the credit and background check and find out they have been dishonest, that is a HUGE red flag. Other red flags to look out for would be inconsistent communication. Bad communication, lapses in contact, and dancing around questions, are signs that they may not be serious about the rental. In this case the prospect may not be worth your time. Another red flag is people who do not respect your time. Examples: Showing up consistently late to showings. Obviously life happens but if it is a consistent pattern it can raise concern. Not showing up to showings, or consistently canceling last minute, or "ghosting you" for weeks, then popping back and asking again is another example of red flags when vetting potential prospects. If the prospect displays behavior like stated above, It's easy to question if they will pay rent on time or follow the rules of the lease. Our time as agents is just as valuable as anyone else's. If someone isn't willing to respect your time then they may not be worth taking on as a client. Now not every prospect is like this. I am in no way bad mouthing anyone. These are very rare occurrences but it's still good to know what issues may occur. There are more great prospects than bad ones for sure. Once the due diligence is done, and the vetting process is over, you can then move forward to the next stages. It is important to disclose anything and everything to make sure the prospect knows what they're getting into. Keep everyone in the loop including the landlord. Once all the vetting and screening is done you would send the application over to the landlord or management company for review. If the prospect makes it to the next stages and the landlord accepts the application, the paperwork would continue into the lease and other required forms. Screening and vetting isn't the only important steps. If they end up renting the property it is important to keep a good relationship with the tenants. Also to make sure routine checks are done on the property. Usually 2-3 times a year. Just to make sure the now tenant is following the rules, and taking care of the property as specified in the lease. Anything can happen. Being a landlord or being a rental agent can be extremely rewarding, but occasionally things can go south. The message is you can likely prevent these headaches by just doing your due diligence. Not just through screening and paperwork, but also through signs and interactions with the prospect.

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