Avoid the NIGHTMARE tenant and eviction: My Tenant screening process

Here is my screening process when looking for a tenant. As a landlord and Realtor, I have leased HUNDREDS of places - these are the red flags I've noticed and how I now go about selecting the best tenants. Enjoy! Snapchat/Instagram: GPStephan

1 .Bad Credit Score. This is something I can sometimes let slide depending on the situation, but generally this is a red flag. A credit report and score shows you how responsible your tenant is paying their bills and loans. Often times if you see they’re behind on car payments, medical bills, have liens or judgements against them…chances are, they’re not going to be an ideal tenant. Now every situation is different and each case is treated individually. But generally speaking, if they’re consistently late on their bills, have large amounts in collections, and otherwise they don’t care - pass.

2.The next red flag is when the tenant has a lot of unreported income. First of all, regular cash deposits are usually an immediate red flag that something is sketchy, and the type of person who does this for the purposes of avoiding the IRS is already not someone I want to associate myself with. But generally with cash income comes infrequent income, and this is the type of tenant who might not have rent every month. Usually this type of tenant is doing something sketchy, it might not be sustainable, and it’ll be inconsistent. They could also be trying to hide from collections by keeping what they need to in cash, so I suggest looking closely at avoiding this person.

3. The next one is wanting to move in ASAP. Although this isn’t always a red flag, this is something I’m extremely weary about. This is something I take on a case-by-case basis. Some times the tenant just didn’t have time to find a place and their lease is up…that’s cool if you can verify it. Other tenants just want to get the house hunt out of the way by locking something down ASAP and then having an overlap, that’s cool to. But there are other tenants who are in the process of being evicted or forced out of their last home and just need somewhere to move immediately and use this as a negotiating point for landlords. Be weary of someone willing to move in immediately, it could be fine or it could be a way for a tenant to lock something down before they’re evicted. Find out why they’re moving and if you trust that’s the truth.

4.The next is not providing their previous landlord’s information or lying on their application. Many tenants refuse to put their landlords information on their applications. Many times they’ll have an excuse like they aren’t on good terms, its a he said she said story, or they don’t want to tell their landlord that they’re moving…in any event, it’s an immediate red flag and seems sketchy to me. If they’re not providing their landlords information, they’re withholding information from you to make an informed decision about this tenant. Many tenants will also lie on their applications and put someone else’s number who will pretend to be the owner. If this happens, immediately cut them off…this happens way more than you’d think.

5.Doesn’t show u on time or doesn’t pay on time. Hopefully this happens BEFORE you sign a lease with them. If the tenant doesn’t show up on time for an appointment, this is something you should consider. Generally the people who don’t show up on time will not be the type to pay on time. Make it a priority for the tenant to pay on time. Another one is if the tenant doesn’t pay their deposit or first months rent on time…if they make an excuse early on, take this as a sign that they aren’t the right tenant for you.

6.Trust your gut - if you feel uneasy about someone, go with your intuition. I really believe that your intuition will pick up things that a logical approach will not…if you feel uneasy about a tenant, trust it. Even if everything logically checks out, it’s important you feel confident and sure of your decision on a gut level as well.

If you follow the above, you’ll be in a much better position to pick the right tenant.

Suggested reading:

Favorite Credit Cards:

[tommyfo]

Also, never rent to friends, family, or coworkers. I learned that the hard way.

[stevepetttyjohn]

I've been renting properties for nearly 30 years and this is almost exactly my process as well. Only times I ever made a really bad decision on a tenant was early on when I didn't listen to that little voice in my head saying; "Don't rent to them" because I was anxious to get the place rented. My mantra is: A BAD tenant is far worse that NO tenant, so don't be in a rush.

[brianmarshall]

IF, you are doing your own interviews... here is a simple thing you can add in.

Take a look at their vehicle. (You should have the plate number on the application anyway)

If they claim they are not smokers for example - and there is a pack on the dash or seat or an overflowing ashtray - well, you know there's a wee bit of deception goin' on ;)

If the vehicle obviously has not been taken care of, hasn't been washed in a year or two, bald or mismatched tires, broken/missing windows, 4 inches of trash on the floor, out of state plates, 2 year old registration tags, a dog that somehow didn't get mentioned or other interesting details that might contribute to your decision...

Trust is pretty damn important, any little indication that it might be a bit wobbly - is enough to make you step back. NEVER be desperate to fill a place.

You will spend months of misery trying to undo what you might have stepped into - and that doesn't count the actual cash you can lose in the process.

[justjacqueline]

Here in London, my worst tenants were, over a thirty year period, 1.Police, 2.Lawyers/solicitors, 3.Doctors.
They all assumed I would not evict them, I was never sure who was more surprised me or them, but their behaviour were all reprehensible.

[alexupton]

Watched this entire thing... dont even own property lol

[ZeniaRose]

3x the rent amount as income?! Yikes. I am so glad that isn't a requirement where I live or I would never have got an apartment! I don't make much money, but in the 17 years I've been renting, I've never been late or missed a rent payment.

[LuckyAces]

Could you do a video comparison between hiring a property management company and doing it yourself?

[mikehicksRE]

This is why i let my property management service deal with this, they basically do a govt level background check and send me most of the items you listed for them.

[Andraek]

LYING IS Something that should cause an automatic turn down I have a simple room for myself never lie you'll 99% of the time get caught. ALso lying shows you cant be trusted.

[ChinkapinOak]

I once had a previous landlord give the tenants from hell a sterling reference, no doubt he was thrilled to be rid of them.

[eosfilm]

It must feel so good getting to the point where you can confidently say that about all of your tenants knowing they have the power to see what you're saying about them online. Congrats on getting to where you are now!

[Carls_World]

One of my mentors gave me a tip that I follow till this day. While they are filling out the application, excuse yourself and go to look at their car and see try to see the condition. If it's a huge mess and it's really bad, that's most likely how they are going to treat your property.

I learned something from you today. I never knew you could ask for bank statements. I'll be doing that moving forward.

[SuperEH]

Graham you are by far the most humble, intelligent, and helpful real estate youtuber out there! Ive learned so much and gained so much knowledge from you! Im in the process of saving up and hopefully by the end of 2018 buy my first house im so excited and look forward to learning more! Thanks alot man! Happy new year! I will be busy within the next few days so i wont be able to say it then! Im subscribed too! Keep up the great work!

[RickyNuku]

I’m not even into real estate but this guy is such a good speaker with great cadence and articulation that I found myself watching a whole bunch of his other videos too. Also great advice, ethics and very relatable

[philblane]

My experience with property management firms is that they will put just about anyone in the property so that they can begin collecting the 10%. If the deal goes bad, they just walk away and let you deal with it. Its a hell of a deal for the PM company; money for nothing.

[Shannon_Vlogs]

I can definitely appreciate everything you’ve said, one thing I would say to consider if they’re trying to move in right away is that there may be a domestic abuse issue. This is not an indication that they’ll be a poor tenant, but just that they’re in a very dangerous or precarious living situation. I’m sure that this is something you already consider, but I think it’s worth mentioning for sure.

[Svartr.HrafnSvartr]

I was a leasing agent/resident manager for a large Canadian residential rental company and I found even when all the boxes are ticked off, it's no guarantee that these 'perfect on paper' tenants won't become a nightmare at some point during their lease. Crazy enough, I've had professionals such as police officers and lawyers be some of the worst experiences in my career. On the flip-side, I've had welfare recipients be absolutely great and problem free. In the renting hierarchy I was working in, I didn't have final say but I could vouch for those who didn't present as a perfect renter on paper. My intuition worked well 96% of the time (keeping in mind that I was renting for high volume multi-complexes). The worst are squatters whom don't even have a rental agreement with the property owner - somehow the law protects these people and it takes forever to get rid of them. They get months to take appliances and sell them and trash the place beyond recognition and be all smug because they can get away with it before the courts decides to deal with them (at least this is true in Alberta, Canada).

Anyways, personally I wouldn't qualify for your rentals based on your criteria but it's your business how you want to screen your tenants. I would just like to say, however, that not all that appears perfect will stay that way. And sometimes, it's worth the risk to rent to those who may have credit problems or who are in a lower income bracket because there ARE people who are grateful to have a good home and make paying rent and being a good neighbour a high priority in their lives.

[newera]

Not gonna lie, I'm low 600's on my credit score but I've never been late on my payments, never called in late or disturbed the peace. I've been with the same place for 3 years and never raised any major issues (unless appliance issue breaks). Point being I'm not a bad guy just bad luck with life.

[SerinaJK]

I definitely got a lot out of listening to you. The part where you mentioned Facebook was mind blowing. The mental health crisis is something else we're looking at right now and this needs to be minded as a landowner who lives on the property. The opioid epidemic is exacerbated now, but things like withholding cash from bank accounts and maxed out credit potentially hint toward that. Meeting in person is so important before accepting the deposit and first month before signing, because not everyone is an addict. However, the shifty behavior of omitting cash from institutions are telling about a person who is financially irresponsible.

[MechEB]

I watched this with the goal of finding out how I can be the best possible tenant candidate for landlords.