Most people think that when you want to rent to a specific tenant that you need to talk to previous landlord, letter of recommendation and so on. But what I have noticed is that the previous landlord is not going to necessarily give you the true story. A lot of landlords are trying to get rid of bad tenants.
So if someone calls them up saying they have an application from one of their tenants what do you think of them? The tenant will only say good things to get rid of the tenant and they won’t give you the right information.
Now they get rid of the bad tenant and go out and put in a good tenant. So be careful of the recommendation you get from the previous landlords where they are currently renting.
The other thing that you can do is a credit check. A credit check are really good, they will telling what their status is as their ability to pay their rent. It also gives you an idea of what kind of person they are because if they are making regular payments you know they will make regular payments on their rent.
Make sure they have a deposit
You also want to make sure that they have the necessary deposit usually you want the first and last month rent or first month’s rent and some damage deposit. You are looking for a couple of months’ rent. If you are running these things privately do not ever negotiate on that. A lot of tenants that I have interviewed for our vacancies they will come in and ask to pay the deposit over time or the last month over time. I wouldn’t deal with that, if you are starting off with that kind of attitude you know you have the wrong tenant. This goes back to my other video “An empty unit is much better than a unit with a bad tenant”
So don’t be too quick to rent to just anyone just because it’s vacant especially if they do not have the deposit. I did that a long time when I was first starting out. The guy came in and paid me 2 or 3 months’ rent and I was moving out of town so it was great for me. Three years later I basically had to do redo the whole house it cost me $50,000.00-$60,000.00 to do the renovations for the damage he cost me.
The other thing to do is go out and meet the tenant at their car. This way you can look inside their car, if their car is full of chips bags, wrapper’s, cigarettes butts then this is an indication of how they will treat their house. You can use that as another guideline for selecting tenants’.
When you are doing a credit check for a renter and a Rent to Own person is that for the Rent to Own tenant you know that they have bad credit for whatever the reason that might be and there are many. The key there is you are offsetting that risk for having the bad credit to them having a higher deposit. Because they are not just bringing one or two months of rent they are bringing $10,000.00-$20,000.00 down so that risk of having a bad credit is offset by the amount of money they are putting down at the start of the deal.