THE NEXT STEP: Checking and Calling References

So now that you've shown your vacant rental and conducted an informal interview with the prospective tenant and they present to you a completed rental application. So what's next?
Aside from running a credit check (which we will discuss in a future post), start calling references.

Below are questions to ask:

When calling a previous landlord, there are several questions you can ask to help you get more information on the tenant. Some landlords will answer questions over the phone, and some will require a fax and a signed release of information from the tenant. You DID include a release at the end of your application, didn’t you?

Were there any other people on the tenant’s lease?
What was their address? (They should know this relatively quickly, or they could be a bad reference)
Was their rent $xxx? (Give an amount other than the correct amount and see if they correct you – otherwise this may be a bad reference!)
Is their rent current?
Are they being evicted / have they been evicted? (If rent is not current, this may be why they are looking for a new place!)
Did they have any pets?
Were there any complaints from other tenants?
Did they cause any major maintenance issues?
Would you rent to this tenant again?

Workplace references are generally going to end up going to the Human Resources department of any larger company, and will have to be sent via fax. You’ll need the signed release from the application for this fax as well. Employers are very limited on what they can give you, but you can request more information (such as pay stubs) from the tenant.

Is the employee’s address _________? If not, please provide correct address. (Give address they are currently using on their application. People tend to update workplace records quickly when they move, so they continue to get paid!)
When did the employee start?
What is their position?
Are they full time or part time?
What is their current pay rate? (Check against the application and pay stubs)

Tenant screening can be challenging, but it is important to check out a prospective tenant fully and completely before turning over a very costly asset to them, your rental property! Not completing a tenant screen can cost thousands in evictions, lost rent, and repairs. It’s impossible to catch every bad apple, but proper screening will certainly reduce the number of bad apples you have to toss!

As members of the Greater Salem Landlord Association you can obtain a copy of a form I put together that authorizes a release of the applicants information and lists relent questions to ask a previous landlord

Does your Rental Application Ask Enough

Compare yours to this checklist to see if you are leaving anything out:

Personal Information, including the full legal name (see What’s in a Name ), phone numbers, Date of Birth, Social Security Number, and Driver’s License Number is critical for screening. While the SSN is not required to obtain a credit report (see How to Screen a Tenant Who Does Not Have a Social Security Number ), it is a crucial identifier in the screening process. Likewise, the Date of Birth is critical to criminal background checks, and Driver’s License info is invaluable for uncovering fraud, and for collection efforts.

Previous Address history gives you the basis for deciding which criminal databases to search, allows you to cross-check against the PATH report and other information provided to avoid fraud, and gives you current and previous landlord information for references.
Employment information helps you judge financial ability, allows you to cross-check against the credit report to avoid fraud, and is a necessary step to satisfying a judgment should you go to collection.

Banking information is provided primarily to show financial ability, to screen for fraud, and is also used for garnishments in collection.
Credit references help you determine this prospect’s attitude toward financial responsibility, and provides important references.

Personal references, if verified, can help you decide if the tenant is responsible, and confirms other information, such as previous address history. If personal references are not from the tenant’s purported geographic location, this could be a red flag.
Emergency contacts are a must-have in case of an injury or when a tenant disappears, and also provide valuable clues for the skip-trace or investigation when collecting against a tenant who skips.

A list of other proposed occupants. GET AN APPLICATION FROM EACH ADULT, and record each child’s full legal name (see What’s in a Name ).
List detailed information about each car tenant owns (another way to find him if he skips), each pet, and inquire about possible nuisances like musical instruments, and heavy or dangerous furniture like water beds.

An Authorization Statement MUST APPEAR ABOVE THE SIGNATURE LINE to allow credit checks, references, criminal and other background checks. You can also include a statement that confirms the prospect’s understanding the application fee will be used to cover the costs of the background check, and is not refundable. Some landlords include a statement verifying that the information provided is true and complete.

The Signature serves as verification of the information, and validates the authorization for the tenant background check. Make sure the signature and the name match.
Do NOT accept the application unless every item of the application is COMPLETE.

What do you add to your application? Share with other landlords by leaving your comment below.

What to include in a Rental Application.

If you don't already use a written rental application for your property, you should strongly consider implementing one right away. There are many reason on why you should have a written rental application perhaps such as offering you protection should

someone whom you did not select as a tenant decide to pursue a discrimination claim against you. If you have documented the entire application process and the reason/s for not selecting that applicant, you can produce the application and related paperwork to prove your innocence. A written application also makes it easier to check a tenant's references. You'll have all the information you need available in one place, making your job easier and less time-consuming.
Here are some important points to include in a rental application:

Start with personal information. Get your applicant's full name, current home address, work address, phone numbers, and Social Security number drivers licences number and email address.
Include emergency contacts. In the event of an emergency, you may need to reach your tenant's next of kin or another family member. This information also may come in handy if you need to track down a tenant who has skipped out without paying rent.
Ask for references. Ask for at least three different references from your applicants. You also may wish to ask for the contact information for a previous landlord.
Ask about past problems with landlords. Ask the applicant if he or she has had problems with landlords in the past or has had trouble paying rent on time. Aslo the reason for moving there present and past locations
Include a code of conduct. The code of conduct in the rental application must be signed and agreed upon by your applicants. This can help dispel any confusion as to what behavior is and is not acceptable and also should include expectations such as noise level, trash, and pet policy. It can also provide evidence of agreement to the code of conduct should you ever be called upon to produce it.
State the rent and deposit amounts. Include these amounts on the written application to eliminate confusion and accusations that a lower rent amount was promised. Include the length of the rental period, if any, and timing for any possible increased in rent.
Ask for permission to check their credit history or background.If you plan on running credit checks for your new applicants, you will need their authorization. This can be as simple as a paragraph within your application that can be signed or initialed to show acceptance. You can also use an additional document if you so choose.
Inform the applicant that while the home is insured however the policy does not cover their personal belongings and you would recommend the applicant to purchase rental insurance.