By Robert L. Cain
Written for Zip Reports that does applicant screening for employment and rentals. Visit their website
Credit.com published a primer for bad tenants telling how to get landlords to rent to them. The article, “Can You Be Denied a Rental Home Because of Bad Credit,” wasn’t meant to be such a primer, of course, but it described the tactics bad tenants already use to weasel into rental properties.
The article discussed seven techniques, four of which are worthwhile for someone who may not have the best credit history. But three of the “techniques” are old hat to bad tenants, but may be new to those aspiring to live rent free. We’ll look at each of these three and how to counteract them. They are first, find a landlord who doesn’t check credit; second, have a good story; and third, pay several months in advance. It’s as if the author of the article, Christine DiGangi, took the pages out of the bad tenants’ handbook.
To be fair, people who use one or more of these three “techniques” are not necessarily going to be bad tenants. Some people religiously pay the rent on time even if other creditors go begging. Some people take good care of their homes and are considerate neighbors no matter what. But those are the people whom we would consider excellent tenants. We need to use careful screening to ensure those who do rent from us are consistent rent payers and are good neighbors and property stewards.
First, advises the article, look for a landlord who is a “small operation,” that is, not a management company. After all, management companies have hard and fast procedures for screening and qualification to rent, one of which is an acceptable credit score, often 620 or higher. Management companies can’t make exceptions, so an unsatisfactory score will automatically eliminate an applicant.
On the other hand, smaller landlords can overlook poor credit or may never check credit at all. In fact, they sometimes are so desperate to get the place rented what with mortgage payments due and other expenses that come regardless of whether the unit is rented that they may be less than diligent in screening applicants. There are only two times a landlord gets into trouble, when he’s in a hurry and when he feels sorry for someone. We’ll get to the “sorry for someone” reason shortly.
Not checking credit will work only as long as the landlord can verify everything on the application and the qualifications of the applicant are otherwise acceptable. If everything checks out, then maybe a credit report isn’t necessary. But professional bad tenants often lie on their rental applications and list friends as former landlords and employers. There’s an easy way to check if a name you got as a former landlord is real: county tax records. Almost every county in the country has property tax records online. Just go to the website and enter the address of the property where the applicant used to live. Does the ownership record match the name on the rental application as the previous landlord? If not, the applicant has some explaining to do. Of course, it could be the name of a property manager, but that’s part of the explanation.
Second, the article suggests explaining in person. That means the applicant has to have a good story, a good explanation for all the bad stuff a landlord may discover. Those of you old enough may remember the cartoon Li’l Abner. In it was a character named Joe Btfsplk. Joe had a black cloud that followed him around everywhere. Anything bad that could, happened to Joe. Applicants with a history of “bad luck” are like Joe. They are the first ones to get laid off; they are the most likely to get into accidents that make it impossible for them to look for work; they are the most likely, then, to not pay the rent and get evicted because they rent from the meanest and most unreasonable landlords.
A one-off unfortunate event is one thing, but a history of bad luck is something else entirely. Bad things happen to people sometimes, but they are often acceptable people and may make great tenants. But if bad things happen over and over to someone, the bad will rub off on the rental owner and just add to the string of bad luck that follows the unacceptable tenant around, what with another eviction and unhappy good tenants.
Some landlords, especially those who have owned rental properties for decades, have a magical power; they have a computer-like brain and can tell by looking at and talking to someone that person’s quality; they are of the “gut feeling” persuasion. “I have been a landlord for 25 years and I don’t need those credit reports and all that checking. I rent on gut feeling.” They are most susceptible to the stories and the history of black clouds—feeling sorry for someone.
Doubt everything. Check everything. See if the “gut feeling” is right.
The third technique is “make advance or larger payments.” That one can be particularly persuasive for the rental owner who has a mortgage payment coming up and no rent to pay for it. It’s called the “wad of cash” trick. It’s a particularly effective negotiating technique that works only with the actual owners, and not with managers or employees.
When you go to the bank and get cash, you know how they count out the money? It’s crisply laid out on the counter in front of you. A bad tenant uses the same trick. That’s part one of it. Part two is putting it in the hand of the owner. Once that money is in the hand of the owner, it’s unlikely he will be giving it back. So a bad tenant pays three months in advance because he doesn’t want the landlord coming around. With a bad tenant, chances are that’s the last you’ll see him or hear from him. Oh, you’ll hear about him. That will come with call from the police asking you to come over and secure the front door that was knocked down in the drug raid. It’s never a good idea to accept more than first and last months’ rent, no matter what.
Incidentally, the wad of cash trick is an excellent negotiating tool if you’re trying to get a deal from a small business owner. It has to be cash, though, not a check or credit card, because actual dollars have their own feel and smell working in their favor, something checks and credit cards don’t.
Credit.com printed the primer for bad tenants, but rental owners have the tools to counteract each of the tricks the article suggests. People with poor credit can be good tenants, just as they can be bad tenants. The only thing that finds them out is careful screening, doubting everything, checking everything, making sure that the application is completely filled out. Most important, even if you believe you can do without credit checks, rental standards are essential. Just who will be an acceptable applicant?