Hands On Real Estate Investing

We have a 3 bedroom 2 bath townhouse available for rent. A 30-year old woman with 2 children applied to rent the townhouse on a Sunday evening. She has a $90,000 annual salary, a FICO score of 640, and a very good landlord reference from her previous landlord. We called her current supervisor and character references and received sparkling reviews. By Tuesday afternoon, she called and asked if we had made a decision yet. We wondered why she was so anxious since she didn’t need to move until 7 weeks from now. That raised a bit of a red flag, but we trudged on with processing her rental application. On Tuesday morning, we sent a request for a rental history to her current landlord. We were shocked when we received the response …

Her current landlord reported that she has been late 4 months out of the past 8 months, AND – as of the 24th of this month, she hasn’t paid the rent! How could a woman making $90,000 per year be late on her rent??? Once a tenant is 3 weeks late on the rent, chances are they don’t plan to pay the rent. Typically, their plan is to skip out on their current landlord, and that raises up a huge red flag! If she’ll skip out on her current landlord, she’ll skip out on us too! Now we know why she was rushing us. She hoped we would be blinded by the $90,000 salary, and forget about checking her current and previous landlord references.

For beginner real estate investors, we cannot stress enough how important it is to thoroughly investigate prospective tenants. Find out as much as you can because once they move into your property, it’s very difficult, expensive, and time-consuming to get them out! For details on screening prospective tenants, click here.

 

The opinions expressed herein are solely those of the Author/WebMaster. Before taking any action, please consult your real estate, financial, and legal advisors.