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Finding Great Tenants and Avoiding The Bad Ones

Any eviction can cost you time, money and sanity. Without the proper rules for thoroughly screening prospective tenants, Property Management companies run a gamble of who may occupy investment properties. Like playing dice in Vegas, it’s a crap shoot or “luck of the draw.”

With an influx of new Property Managers in the Austin Real Estate market, how do you know if you’re getting a reputable company with a strong method for tenant screening. Essentially, the fear of bad tenants, evictions, horror stories are the foundation for bad Property Managers. Maybe bad is a harsh word, but un-educated Property Managers. Tenants in general get a bad wrap. If Property Managers followed the simple basic steps of screening, you would probably hear less of those stories and more about how the investors are cash-flowing with great tenants.

So what are the basics? Is there a rocket science formula for getting good tenants? The quick answer is NO. But don’t be mistaken that it is an easy process. Thoroughly screening tenants takes time, set procedures to verify everything. I’ve seen how short cuts can thoroughly hurt an investment property. You wouldn’t take short cuts when investing money. You analyze investments, stocks, retirement plans, etc in order to pick the right one that fits you. Your Management company should do the same to pick the right tenant.

Circumstances are different in every situation. The property staying vacant for long periods of time. Not enough hits on the property, or not enough applicants. (These are other issues of the Property Manager which needs to be saved for another article.) Should you take the gamble and overlook possible discrepancies with the future tenant in hopes they pay the rent? Well, if the management company was doing things right, you shouldn’t have to worry about getting an influx of applications.

Again, so what are the basics? First you have to know if the Management Company uses a screening service or do they screen themselves. Management Companies that pay a service to do the pain stacking work of researching tenants are usually one step ahead of the game. It is not cheap for this kind of service and reputable screening services are thorough and will stake their reputation on it. Management companies that take on the screening service on their own in order to save the money or feel they can do it better job are more influenced to take short cuts or make bad decisions.

Tenant screening services don’t hold an interest in the property and whether it is leased or not. Hence, they give you a unbiased Decline or Accept. Management companies, or should I say in most cases, individuals hold more stake in whether the property is leased. So if the individual or company does the screening on their own, what do they screen? To be absolutely thorough they should screen for:

  • Credit History
  • Work History, at least 2 years
  • Criminal Background, local and national
  • Education
  • No Fly List
  • Rental History (if there is any)

Most Tenant Screening Services will follow all the above criteria thoroughly. At least most of the reputable ones do. Though a good Property Manager would pay for this service, this shouldn’t be the only other deciding factor. Here at Austin Property Management Pros, we’ve gone as far as researching facebook or myspace accounts to look for potential behaviors. We had one property that was listed as “smoke-free”. The background check on the tenants came back clean on all counts. Great credit, no criminal background, and rental history was great. When we asked if they smoked, they responded with a resounding no. However due to checking their myspace account we saw numerous pictures of them at parties, smoking. This was a concern. Though it is not an issue of smoking as long as it was done outside the premises, it was an issue that the prospective tenants were dishonest about it.Through more research, even though the rental history came back clean, we were able to get a hold of the previous landlord and he stated they smoked within the premises. Is this a little overboard, maybe? But, there again you hear the horror stories about bad tenants, but we were able to avoid that story and leased the property to someone more in line with the landlords expectations.

Is it rocket science? No, but it is Real Estate. It’s about being thorough, precise, disciplined, and most importantly the “want” of not dealing with troubled tenants. Can you find quality tenants? Yes. Can you find bad tenants? again Yes. The main question is, does your Property Manager know how to find the quality tenant and say no to the bad one.

For more information about screening tenants go to our FAQ at htt://

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