A recent report from The National Association of Independent Landlords recommends that landlords complete background checks for tenants.
And it makes perfect sense.
But you have to wonder what people are going to do if they have been foreclosed upon and are looking for a place to live. There credit is shot and quality landlords are going to give them a pass instead of renting to them.
It may explain why so many families are now renting before they lose their home to foreclosure just to avoid this predicament. And these same families instead of fighting to save their home are banking their mortgage payment to use as a high deposit on their potential rental property.
A proactive foreclosure abatement process could probably take some pressure off the marketplace instead of the intense downward spiral we find ourselves falling into.
Running a thorough background check is essential. The National Association of Independent Landlords urges property owners to:
- Verify employment and salary. An applicant’s monthly income should be at least triple the amount of the rent.
- Corroborate rental history. Confirm it is the actual landlord giving the reference, not a friend or relative posing as such.
- Avoid applicants with a history of collections, evictions and judgments.
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I have experienced trying to find rentals for homeowners whoes house has been foreclosed on and it is really tough. Some landlords are sympathetic others, not. Eventually they find a place and the time of year plays a roll in the motivation of the owner. Coldwinter months with the thought of paying the mortgage and heating expense for an empty house will generally soften their heart and clouds their judgment.
This is definitely tough for a lot of people who foreclosed recently and looking to rent. I have seen situations where the property management approves the potential tenant but requires a bigger deposit or they don’t give them any move in bonuses. This can make all the difference on whether they will have enough to fulfill the rental requirements.
If you have foreclosed recently and are looking to rent it is best to look for rentals that are being managed by the owner rather then by a property management company. The owner is less likely to require a lot of documentation and may make exceptions.
This is another harsh reality of the current real estate market. I agree that people will probably have more success dealing with private home renters versus professional property management companies
A property management company should realize that most potential tenants now will have a foreclosure or bankruptcy on their credit….as long as there are no current collections or judgements. Employment and salary of course are a must.
I see it all too often where owners decide to be investors without understanding that tenants have rights. Its all good when tenants pay, but when they don’t – its not just a matter of changing the locks. Investors should do adequate credit checks prior to leasing a property, so they have a clear understand of who they as leasing to.
“Avoid applicants with a history of collections, evictions and judgments.”
With Las Vegas leading the nation in foreclosures, it’s normal to see a foreclosure on applicant’s credit. Because of this, we look for the items stated above as determining factors on whether the applicant will pass the credit check.
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