Blog

More people than ever are renting instead of buying as housing prices spiral out of control


Landlords and property owners have to be more selective, careful, and thorough about how they screen applicants. In today’s economy filled with uncertainty, inflation, and higher costs of living, it can be more difficult for some applicants and tenants to keep up.

Couple with renting advisor

All of these factors are a large part of the reason that screening is so important.

Why does screening matter so much?

One simple principle: the best way to predict someone’s future behavior is to look at their past behavior. Sometimes people can turn their lives around and not make the same mistakes they used to. But more often than not, the way someone has lived their life for the last one, two, or three years is probably a pretty good predictor of how they’ll live their life for the next year, two years, and three years. This is often the case with tenant evictions. If you’re a landlord or property owner and you’re screening a potential tenant, and their screen comes back with an eviction in the last year, this is usually a predictor that the tenant will get into a situation like this again soon. Sometimes a tenant simply experiences an unusual situation with a job, spouse, or a bad landlord. But most of the time, the tenant will behave with you the way they behaved with others. The best way to avoid a future eviction with a tenant is to not engage with the tenant if they have an eviction within the last year or two years.

As the saying goes, “An ounce of prevention is worth a pound of cure.”

The simplest and easiest way to avoid an eviction situation with a tenant is to not engage with a tenant who has had a very recent eviction. If you need help, the best tenant screening services can be found here. Additionally, screening is important because if a tenant has a very recent criminal history or significant financial problems within the last year, the odds are that they will experience something that will make it difficult for them to pay their rent on time. So, the rule of prevention applies once again: it’s better to not get caught up in a bad situation with a risky tenant in the first place. You might like the particular tenant and feel compassion for them, but it’s important to not let feelings and emotions mix with business decisions, as the price you might have to pay for being overly compassionate could be severe. As you probably know, evictions are very stressful, not just for the tenant, but for the landlord as well. The stress and costs involved with an eviction judgment are tremendous and can eat up weeks or even months of your life. Once again, this is why avoiding a risky tenant in the first place is the single best way to avoid an eviction situation.

Credit history

The Importance Of Good Rental History

When screening a tenant, it’s best to look at their recent financial history and rental history. These are going to give the best indicators as to how they will treat you as a landlord. Once again, the best predictor of future behavior is past behavior. However, there are some situations, especially in our very unpredictable economy, in which a tenant who has a previous track record of great credit, great financial decisions, and a great rental history, may simply fall on hard times and not be able to keep up with payments for a period of time. The COVID-19 pandemic was a perfect example of this situation for millions and millions of renters.

In situations like these, it’s best to weigh your options carefully and not make a snap decision. Rushing to evict a tenant is not as cut and dry as you think it might be, and you might find the process more laborious, stressful, and expensive than you’d think. In some situations, it might be worth it to try to extend grace to a tenant for an extra month or so instead of throwing down the hammer, because this might actually end up saving you money, and it will certainly save you time and stress, in the long run. If the $500 or $1000 you profit from a tenant each month has the capacity to make or break your entire financial situation, it’s time to evaluate whether you yourself are making wise financial decisions. If you rush to evict, you can be sure you will be paying more than $500 for the process.

Simply put, it’s better to try to work things out with the tenant and stay in constant communication with them to understand their financial situation and make a plan together to get back on track. This will almost always save you time and money. However, if you’re dealing with a tenant who simply has a bad attitude and feels entitled, and is making no effort whatsoever to try to get their financial situation in order to fulfill the terms of their lease, this is a different story. It’s unfortunate, but this is the type of situation in which eviction is more appropriate. However, the odds are that you won’t encounter as many tenants like this as you will tenants who are willing to work with you.



Source link

Leave a comment