Finding the Right Tenants
Any landlord?s greatest fear is a tenant who refuses to pay rent and who also refuses to leave, because the eviction process can be lengthy, litigious and expensive. Finding a reliable tenant is crucial.
Brokers typically run credit checks and ask for letters of reference from employers to screen potential tenants. Sometimes, they even ask for personal references. But you can also do all these things on your own.
Gerald Garber, a retired lawyer who divides his year between Great Neck, N.Y., and Florida, rented out his Great Neck house about 10 years ago through a broker, but this year he decided to do it on his own.
He had left the house vacant for many winters but decided to rent it again because of rising energy costs. ?I figured I?d let somebody else pay these ridiculous heating bills for a change,? he said.
He said he planned to run credit and criminal background checks on any serious applicants. ?For a couple hundred dollars, you get a service to run these checks and find out who you?re dealing with,? he said. ?But to me the most important thing is meeting the people.?
Finding someone to run a background check is as easy as a quick search on the Internet. A criminal check can cost as little as $20 to search criminal records in one state, but they can run as high as $300 for a thorough review that includes nationwide criminal, civil and bankruptcy searches.
Dan Bowersock, a broker at Ferguson Dechert Real Estate in Avalon, N.J., warned that good credit and glowing references could sometimes be misleading. ?You can?t know how people are going to live,? he said. ?Maybe they have friends who say great things about them, but what about the sister from Texas with three kids who are going to draw on the walls? There are so many ?what ifs? that could drive you crazy and which would not be satisfied with a background or credit check.?
He rents out his own vacation house in Avalon, but he doesn?t bother with the usual background checks. Instead, he finds out where prospective tenants have rented before and calls their previous landlords. ?That?s the most important thing, if those respective owners give them a clean bill of health,? he said.
Even when a broker has carefully screened potential tenants, Mary Tetzloff, an agent at Montclair Realty in New Jersey, said, homeowners should make a point of meeting the new tenants.
?That way, the owners know who?s going to be in the house,? she said. ?It?s also good for the tenant to put a face to the owner because then they make the connection that they are in a real person?s house and they won?t ill-respect their possessions.?