With the current economic situation, one thing has been very common for many of us… our credit has been destroyed. For landlords, this can be quite scary as it’s not as black & white to pick viable candidates as it used to be.
Understanding the applicants past credit history is important. A string of recent missed payment one month ago may be a red flag. Missed payments months ago when the person used to be unemployed is entirely different, especially if the individual has shown the ability to bring their payments up to date now that they are employed.
Your target demographic (and eventually your tenant) is largely dependent on the type of home you have for rent. A vintage studio apartment for $750 is not going to attract the same crowd (or same credit) as a $4500 downtown luxury apartment. Understand your target demographic could make your expectations more realistic.
Employment verification / landlord verification is absolutely necessary. A business card or just a phone call to “their manager” and “their current landlord” doesn’t work. I can’t even recall the number of times I have been given wrongful HR information, or landlords that can’t verify the property, lease or the tenant.
I also recommend pulling judgment/liens/alimony, criminal history, and social security verification as well which is an available feature with most credit providers. With bankruptcies and foreclosures on the rise, many applicants just may be people whom have lost their home. It’s a saddening affair but understanding their financial situation could make them very real and viable candidates. With that in mind, fraud, identity theft and similar criminal acts are also on the rise, this is the most dangerous. It’s your investment and you should be careful, but not scared of every applicant coming your way. Doing your homework could help you find opportunity in places overlooked.
Sherwin is a REALTOR® in the Chicago & Suburban area with @properties. Questions can be forwarded to Sherwin Sucaldito
”Landlords New Rules ” by Sherwin Sucaldito is licensed under a Creative Commons Attribution-No Derivative Works 3.0 United States License.
Based on a work at Realty Evolved
