One of the biggest fear of a landlord is to end up with a terrible tenant. No landlord wants to have problems with their tenants, but no landlord wants to end up paying the tab when the tenant doesn’t pay their rent!
Low income? Currently unemployed? Inconsistent Work History?
By keeping an eye out for the following major red flags, you can protect yourself from nightmare tenants and set yourself up for real estate success!
If your potential tenant shows more than one of these signs, beware…
5 Tenant red flags:
A tenant has to be able to afford to pay their rent. The general recommendation is to spend about 30% of your gross monthly income on rent so if an application comes in with a higher %, they should be looking elsewhere for a place to live. You will probably do them a favour by not leasing to a person who wants to live outside their means.
Every prospective tenant should be able to provide with references from employers and previous landlords and no-one is going to willing provide you with a bad reference. Make sure you check the number provided, belongs to the real estate suggested by the potential tenant. Of course, if the references are bad, beware.
If they have a history of evictions, let these tenants go.
Some tenants can be swamped by debt. Paying their rent on time will be the lowest priority. You can ask about their debt obligations. If they are hesitant to reveal them, they might have something to hide.
Look for the employment history. The gaps can suggest they have either been fired or settle for impermanent positions because they can’t find steady employment.
Still living with the relatives
If you are the first rental a young tenant has applied for, a history of living with the relatives is no reason to turn down this application.
Repeatedly returning to the family nest, though, could mean they have gotten into financial trouble and needed to return home to save money.