“They seemed so nice”

“They seemed so nice”

I can’t tell you how many times I have heard “They seemed so nice when I was showing them the property.”  from landlords describing their tenants from hell experiences.

Many of these owners got into real estate rentals as an investment opportunity. They did their homework, ran the numbers and envisioned a steady revenue stream. What they didn’t consider was the importance of fully investigating the history of their tenants.

But turned out to be the devil in disguise

Lori is a landlord from Missouri and told me that she showed her rental house to a couple in their 40’s that seemed professional and very polite. Then…

“The couple had been living in the house for 6 months then suddenly stopped paying their rent. They told me a convincing story why they were late and I wanted to be nice and waited. I had still not received any payment after being put off for 3 months so I began eviction proceedings. We ended up going to court and they claimed that I was a slum landlord and didn’t maintain the property. Fortunately I kept good records and had receipts for all the repairs I made, including a new hot water heater.

I was able to evict them and get a judgement for back rent. When I tried to garnish their wages, I discovered that the employer he listed on his application had never heard of him.

I also did some checking online and found that both had been convicted of theft.”

The 4 critical steps you need to take to reduce problem tenants and the headaches they bring –

All of this could have been avoided before the lease was signed and still be fully compliant with Fair Housing and Fair Credit regulations by taking simple steps at the start of the process.

  1. Pre-screen your tenants by clearly communicating your residency standards (Make sure they are the same for all of your applicants)
  2. Require complete applications and that each co-applicant completes their own individual application
  3. Conduct a comprehensive background screening for every applicant and co-applicant 18 years or older that includes credit, criminal and eviction results
  4. Make sure the applicant’s ID is properly verified. Is the applicant who they say they are?

After you take the first 4 steps, pay attention to the results!

Federal Fair Housing compliant standards and criteria can include*

  • Required income level
  • Prior evictions
  • Bill payment history
  • Criminal history

* State and local housing regulations could include other protected categories. Make sure you check with housing authorities to determine which ones apply in your area.

Credit reports alone are not adequate

Many landlords use a credit report for background screening and believe that it is adequate. Credit reports alone are not sufficient.  If you have ever read one, you know they are not easy to understand. Credit reports do not contain enough information to properly evaluate an applicant. The applicant’s eviction and criminal history are very important when considering an applicant and neither are found in a credit report.

A couple of minutes invested upfront can save you countless hours and dollars.

About TenantMagic

TenantMagic provides online rental applications with the most comprehensive tenant screening reports available (credit, criminal and eviction, including a credit score) to property managers and owners.

TenantMagic is also free to property managers, agents and owners – applicants pay the fee. We are known for our outstanding customer service. Check out our Google Reviews to see our reviews.

We work with property managers, owners and real estate agents throughout the country. Feel free to contact me or register at www.tenantmagic.net

japple@tenantmagic.net

216.288.5044

Landlord Issues During the Covid-19 Pandemic

A new dawn for rental applications and tenant screening

I have avoided blogging about the pandemic. I didn’t think that there was anything new to add to the discussion.  However, since this past April I have had conversations with numerous landlords throughout the country. They were looking for ways to respond and adapt to the current situation. Here are some topics that came up that I felt are most relevant including contactless rental applications and tenant screening.

Contactless applications and background reports

Removing paper from the application process was important before the pandemic. Contactless rental application and tenant screening is now critical. The use of paper typically involves personal interactions that need to be avoided when possible.

Business owners are constantly looking for new ways to reduce person-to-person contact since the pandemic hit. TenantMagic’s online application and screening program has always allowed property owners and real estate agents to remotely engage with their applicants during the application process. The landlord simply enters the email address of the applicant into the system. The applicant then gets an email with a link to their application. Once completed the landlord receives the application with comprehensive credit, nationwide criminal and eviction reports.

ID verification document management is another area where person-to-person interactions can be eliminated.  TenantMagic allows landlords and agents to request paystubs, bank statements, etc. from within the application and screening program. The applicant simply uploads them when receiving the request. The documents are then electronically and securely sent to the landlord or owner as PDFs that can be downloaded and stored for their files.

Automated Rent Collection

Renters in their 20’s and 30’s consistently complain that their landlords will only accept a paper check for their rent payment. They tell me that this is the only physical check that they ever write. In many cases they need to personally give the check to the landlord.

Automated rent collection can eliminate this complaint and many other related issues. There is no need to handle a paper check when rent is collected and deposited from bank account to bank account, . The funds are processed in a timely and consistent manner.

It is important that the automated rent collection program will not allow partial payment unless authorized by the property owner. Accepting partial rent payment can delay eviction proceedings if no other funds are received. We have partnered with PayClix that allows tenants to easily pay their rent electronically for a nominal fee. It also has a proprietary feature where the landlord can decide to accept or decline the payment.

Diligent tenant screening

Taking the first person showing up with a check is one of the worst mistakes a landlord can make when considering a rental applicant. Many times this is the last money the landlord will see.

In today’s environment it is even more important to know the financial, credit, criminal and eviction history of your applicants with current eviction restrictions. Additionally, landlords know all too well problem tenants can result in much more than just lost rents .

It is not difficult to avoid problem tenants before the lease is signed and still be fully compliant with Fair Housing and Fair Credit regulations.

The 4 critical steps you need to take to reduce problem tenants and potential evictions-

  1. Pre-screen tenants by clearly communicating residency standards
  2. Require complete applications and require each co-applicant to complete their own individual application and collect an application fee.
  3. Conduct a comprehensive background screening for every applicant and co-applicant 18 years or older that includes credit, criminal and eviction results
  4. Pay attention to the results

Getting out of the landlord business

Selling your properties could be a very viable option if the Covid-19 pandemic has drained the last bit of your passion and enthusiasm as landlord. The demand for residential properties is very high, which has resulted in valuations not seen in a long time.

The traditional option is using a real estate agent which offers a number of benefits. Another option is to sell to a company that will directly purchase your properties, as-is for cash. The LP Property Group  buys properties in the Northeastern Ohio area is well regarded .

The benefits with selling to a company like theirs is that they will buy the property “as is.” Sellers don’t need to make any repairs or deal with point-of-sale inspections. Decisions are typically made quickly and they often pay 100% of the purchase price in cash, which allows closing much faster than a typical retail sale where financing is involved. Also, these companies will usually cover the seller-side’s escrow fee. Since no real estate agents are involved, sellers don’t have to pay any sales commission. 

Preparing for the future

We are all looking forward to the day when we can interact with others like we did before the pandemic and better days appear to be heading our way.

This is also an excellent time to re-evaluate current business operations. There are a number of business activities where person-to-person interactions were eliminated that shouldn’t return. Many of them were simply a waste of time. Automating paper-based processes for landlords and tenants is one area where allowing them to go about their day without having to interact in-person needlessly will be welcomed by both the landlord and tenant.

Going Paperless

paperless rental applications

The importance of going paperlessThen and Now

At TenantMagic we have always stressed the importance of going paperless for the rental application process. It provides landlords, property managers and real estate agents with convenience and ease of use. It also helps keep applicant’s personal information secure.

Removing paper from the application process was important before the pandemic. Now it is critical. The use of paper typically involves personal interactions that need to be avoided when possible.

Fortunately, Tenant Magic can assist not only with the eliminating paper from the application process, but also with rent collection and verification document management.

Past reasons for paperless applications

In a previous post I described how personal information is crucial to be able to make a qualified decision. Here is a link to a post that does a good job of explaining why this data is important when assessing rental applicants. https://bit.ly/2I6rDG9

Real estate agents, property managers and landlords greatly increase the risk of identity theft when using paper rental applications.

Paper applications are easy to be viewed by unauthorized individuals. I have seen them laying out in the open at many offices.  Rental offices by their nature normally have people regularly coming in. There are also cleaning and maintenance people that could access them, especially when the offices are closed and no one else is around.

Electronic applications allow the applicant to receive their application via email and complete the entire process online. The landlord or agent receives the completed application and reports in a secure manner, assuring that the information is only viewed by those that have the proper permissions.

The new normal

Business owners are constantly looking for new ways to reduce personal interactions since the pandemic hit. TenantMagic has always allowed property owners and real estate agents to remotely engage with their applicants during the application process.

TenantMagic has since addressed other activities where in-person interaction can be eliminated. We recently added ID verification document management. Landlords and agents can now request paystubs, bank statements, etc. from withing the TenantMagic program. The applicant simply uploads them when receiving the request. The requested documents are then electronically sent to the landlord or owner as PDFs that can be downloaded and stored for their files.

Automated Rent Collection

For many landlords, rent collection regularly involves personal contact when requiring paper checks for rent payment.  TenantMagic has recently partnered with PayClix which allows tenants to pay their rent electronically to their landlords directly from their bank account or with a credit card.  This eliminates one more personal interaction between the tenant and landlord.

A brief self-promotion – Landlords that register with TenantMagic get special promotional pricing with PayClix’s automated rent collection program.

Moving Forward

We are all looking forward to the day when we can interact with others like we did before the pandemic. But that is not to say that many of the personal interactions we eliminated for business reasons are going to come back. Many of them were simply a waste of time. Automating paper-based processes for landlords and tenants is one area where allowing them to go about their day without having to interact in-person needlessly will be welcomed.

About TenantMagic

TenantMagic provides online rental applications with the most comprehensive screening reports available. It is fast, easy to use and free to landlords and agents. TenantMagic provides outstanding customer service by phone 7 days week.

Contact – Jay Apple japple@tenantmagic.net (877) 462-0960 www.tenantmagic.net