If you’re a landlord in California, you may have rental property worth millions of dollars. If you maintain your property well, try to root out bad tenants and focus on finding good tenants, it could bring you a substantial rental income and improve your cash flow for many years to come.
You may expect prospective tenants to be impressed by the fine apartment, townhouse or rental home when you or your manager show them. And some prospective tenants might seem like people who would be great tenants and pay on time, keep up the property and abide by all the conditions of the lease.
But they may look and sound better than their background checks show. So, it is important to check up on the people you rent to. Diligence in screening and doing background checks can help you get good tenants. Use the rental application to investigate the tenants thoroughly. Don’t just accept everything at face value. And if you get good tenants, your property will be worth more, and you can charge the rents you need to make a profit.
Some landlords find what they think may be excellent tenants to rent their valuable units but don’t do all the background checks and calling of references. A gut “instinct” may tell them the clean-cut person, couple or family seems so presentable and respectable. The landlord may have advertised online and in print and seen several people, finally settling on someone who appears to be a well-groomed professional or trades-person with good income.
They may pay the security and first month’s rent with no problem. Then, you don’t get another penny from them for a few months. This scenario is relatively rare, but it can be devastating when it happens to you, and there are several steps a landlord can take to prevent it.
Attracting Good Tenants
If you take the following steps, you can find a tenant who does not just seem good, but who will be perfect to rent and take care of your valuable property too.
When your unit is ready to rent, and you want to take applications, your first course of action will be to initiate an advertising campaign. It is best to advertise in as many publications or websites as you can, so you get a larger pool of people interested in renting from you. This way you can be very choosy about whom you rent to.
The main places to advertise are:
- A sign on your property stating the property is for rent so people driving by can see it. Also, the neighbors will see the sign and tell their friends. This is relatively inexpensive too because you can buy a sign just one time and use it again and again. Many landlords use this method, and it works well.
- Various websites on the Internet. One of the big ones is http://www.craigslist.com. Ads on Craig’s List are usually free, and you can put many photos of your property in your ad to generate interest. Other sites are available, too. Set it up so the first time you communicate is by phone, not by e-mail or text. Never include your address.
- Local newspaper or magazine website. Make the ads short, but give enough information to make the rental property seem intriguing and worth the effort of the prospective tenant to make an appointment to view the unit.
Pre-screening Prospective Tenants
Seasoned landlords have a list of questions ready for prospects who contact them, preferably by phone. Ask each person named on the lease to provide proof of income and/or employment.
Rent to people whose income is three times the monthly rental amount. For example, if the rent is $2,000, the tenant should have monthly income of at about $6,000. Verify the tenant’s employment and income information. Don’t assume that it is accurate. Tell them you are going to do a credit check and make certain they have a good credit history before renting to them.
Get references from previous landlords. Search the court records. If you find something is wrong from another landlord or the court records, you may not want to rent to that person.
Many landlords require that no more than 2 people living in the unit per bedroom. If it’s a two-bedroom, the maximum number of tenants would be four. You may want to make a special accommodation for small children allowing more than two per bedroom depending on how big the dwelling unit is. Under this scenario, a family of four could not live in a one-bedroom apartment or house.
But keep in mind there are certain things you cannot ask a tenant about under the law or risk a discrimination lawsuit. Federal law gives seven categories of discrimination. You can not discriminate based on age, race, sex, national origin, skin color (race), familial status, religion or disability. In your list of questions, do not include any questions along these lines.
Ask your questions of every prospect, and you will weed out many bad ones before they even set foot in the door of the unit to view it.
More on screening applicants
It has been claimed that just 20 percent of tenant’s cause landlord’s 80 percent of the problems. It is important that you do not get one of the 20 percent. If you do, you can lose out on income from that rental unit and you may have to file an Unlawful Detainer to get them out. If you have a good tenant, your income stream is more secure.
Right off the bat, from their first phone call or e-mail, tell the tenant how much the rent and security deposit are. Also, give them a brief overview of your rental policies. If you are dissatisfied or suspicious about their replies, eliminate them from the rental process right then and there and do not have them proceed to the next steps of filling out applications and going through background, employment, rental history, credit and criminal-record checks.
The first time you communicate with them, find out their contact numbers, whether they smoke, if they have pets and why they want to move into your property and neighborhood. If you know this stuff right up front, it will be much easier to weed out tenants who are not ideal.
Showing the property
It has been estimated that about half of prospects don’t even show up for a viewing appointment. And many of them don’t call to cancel, which can result in a huge waste of time. There are some steps to take to avoid your time being wasted.
Instruct anyone interested in leasing or renting from you to drive past the unit or complex to get an idea of the neighborhood and your property. After they’ve done this, tell them to call you so you can explain your policies for showing a unit. This way, people who prejudge a property by seeing the outside and people not interested in the neighborhood can be eliminated even before the formal showing or viewing.
Give those who call back the option of a couple of viewing times on a couple of days when you show the property. For example, you might show for two hours on Saturday and Monday, say from 5 to 7 p.m. This gives people who work 9 to 5 an opportunity to see it. Also, tell everyone who is interested viewing the property these times. This way, you may have several prospective tenants show up at the same time and it may create a little competition for your place. Also, this way, you show up and if a particular tenant doesn’t show up then it’s not a waste of your time as you will be there for all tenants anyway. This will also let the prospects know that others are interested, which may make the property seem more attractive. It also shows how serious the landlord is.
Think of the showing or viewing as a job interview. Prospects can give clues about whether they will be good tenants. Are they dressed appropriately? What is their attitude? If they complain or whine, it might be a good idea to continue your search for a more suitable tenant.
If a prospect criticizes your unit or finds a lot of problems with it, they could be the type of person who will cause problems in the future if you rent to them. If your rental property is in very good condition, and if the prospect can afford it, there should be minimal criticism.
If they give you a bad impression at the showing, weed them out of the rental prospects. A gut instinct can help you, but never rely on instinct over solid screening and background checks.
The Application Process
First off, most landlords can and should charge an application fee of $30 to $45. This alone makes a prospect respect the application process and helps you weed out prospective tenants who are not really all that serious about leasing from you or who can’t afford to. Also, many tenants that know they will not pass the background test will not pay or apply, this will help you week out the bad ones. If they pay a fee, they will want the process of applying and going through a background check to be worthwhile.
But even with your pre-screening, you will find that some of the prospects are duds. They may not be good rental prospects. Urge every prospect that you deal with, though, to fill out the application. This way you can’t very easily be accused of discrimination. Representing a willingness to rent can prevent discrimination lawsuits or charges.
There are several important questions for each applicant during the screening process. Ask them for the full names and dates of birth of everyone who’ll be on the lease. Get their Social Security numbers and the numbers of their cellphones. Get three previous addresses or going back for the past decade. Inquire after their current and past employer. Get everyone’s signature, too. Most rental applications require a signature and that signature authorizes a credit check and allows the landlord to investigate their background, including employment.
Now that your screening process is underway, it’s time to weed out the undesirable prospects. Anyone with bad credit history, a criminal record of violent offenses, anyone who’s been evicted in the past should be probably be eliminated unless there is an acceptable reason. Keep everything fair by doing things on a first-come, first-serve basis. If you need to reject an applicant for some reason, document your reason for rejecting him so he can’t claim discrimination.
Verify employment, rental and credit histories
If they make it past the initial prescreening phone call and viewing the property, do the checks and talk to past employers and landlords. Verify employment and rental details and history.
Check that credit report. It is really telling of how good they will be about paying the rent on time. If their score is 650 or above, they are probably reliable, and there won’t be any delays in the payment. You can get the credit report from a credit reporting agency or from a tenant screening service. Do an Internet search for “credit reporting agency” and visit their websites and follow the directions.
Remember, if you follow these instructions carefully, you are more certain to get good tenants who will take care of your property and pay the rent on time.
The final step: Signing a Lease or Rental Agreement
The final step is to have the tenant sign a formal, legal contract called a lease contract or lease agreement. Spell out everything you expect from the tenant, including:
- The length of the lease. Many leases are from 6 months to 3 years. Spell out if the lease then goes to month-to-month at the end or it’s a fixed term lease and you are expecting the tenant to vacate at the end of the term. Even if you have a fixed term lease, if you continue to accept rent from the tenant after the expiration of the term, then the agreement becomes a Month to Month agreement under the law, see Civil Code 1945.
- How much the rent is.
- The percentage increase or if there is an escalation clause in the rent after the term of the lease ends.
- What day of the month the rent is due or to be paid.
- Whether they may have pets, how many and what types.
- Whether they may sublet the apartment or unit, (usually not).
- How many people may live there.
You may have other clauses and rules. Be sure whatever you include in the lease is in easy-to-understand language. Make sure the tenant understands all the terms and conditions.
What if you get a problem tenant
If you take all this care to get a good tenant and still end up with a bad one, we at Express Evictions can help you get them removed from your unit legally and fast and keep those regular rent checks coming in. As we stated, problem tenants are in the minority, but they can take up the majority of your time so much of your time that it might seem like you have a lot of bad tenants.
And if you don’t do proper screening, interviews with references and background checks, you very well may end up with more than one bad tenant in your career as a landlord or property manager. If you’re careful, you can almost certainly weed out any bad prospects and lease only to people who pay the rent on time and keep your property in good shape.
Our website, https://ExpressEvictions.com, has eviction forms and notices that you can view and download for free. But you can spare yourself the hassle of studying California eviction laws and navigating the complex eviction process by hiring our experienced eviction lawyer and law firm to handle the job at a reasonable price.
Express Evictions can do all the paperwork and any necessary court filings throughout the eviction process including getting the tenants served with all of the legal documents for a low price. (See our FAQ for what all is covered.) Given how much time and hassle an eviction can entail, hiring our firm is a will take a large burden off you. Landlords can just hand the case off to us and relax with a sense of relief that they won’t have to spend hours on the phone and at the courthouse to get a bad tenants or destructive tenant evicted from the property.
For help with problem tenants that you need to be evicted, contact us today.