Boost Your Sixth Sense for Spotting Bad Tenants

As owner of a background check company, I’ve conducted tenant screenings for years and seen lots of bizarre things, but one incident takes top prize.

In June, 2013, I spoke with a newly minted property manager in California, who was so eager to rent a unit he didn’t verify a prospective tenant’s information. The application, it turned out, was full of falsehoods.

What the candidate didn’t want this young property manager to know is that he ran a meth lab. The applicant moved in, eventually his operation was discovered, and the police arrested him.

The cost to repair the unit? More than $10,000.

What do toxic rental applicants lie about?

Drug manufacturing is just one of countless secrets prospective tenants may be hiding. Certainly most  candidates won’t be the second coming of Walter White. But inevitably you will face people who go to great lengths to hide the details of their lives so they can plant their roots into your property and twist them into knots until your place is a garden of misery.

So what symptoms of disaster do the pros conducting background checks and tenant screenings look for? The list is large and always growing, but I’ve narrowed it down to 10 main categories of secrets that bad tenant applicants look to hide:

1. Criminal history — This category includes crimes against people, such as armed robbery, assault, and rape.  It also covers crimes against  property like burglary, vandalism, auto theft, and arson.
2. Drug making, trafficking, or dealing — What better place to hide their illicit business than in your apartment complex or home in a residential neighborhood? Don’t let this happen to you!
3. Sexual predator, pedophile, or offender status — Offenders want to conceal  their status because they’re ashamed or possibly looking for their next victim. Either way, clearly this is something you need to know about.
4. Credit problems —  I’m not talking about just credit scores but whether the applicant has been foreclosed or evicted from other apartments, been sued for non-payment, or had wages garnished. Look out for “deadbeat” parents and spouses, too.
5. Civil violations —  These violations include small claims court cases, other lawsuits, and restraining orders.
6. No income —  Unemployed applicants know property managers don’t want to lease to a person who has no income and can’t pay the rent. Often prospective tenants invent a company or name a large corporation where they supposedly work (Walmart, for example), hoping you don’t contact human resources.
7. Renter history —  Did the applicant leave their last place damaged or in shambles? Keep an eye out for people who didn’t pay rent on time, bounced checks, or have faced the police because their partying disturbed neighbors in the middle of the night.
8. Immigration status —  WARNING: This is a sensitive area, and you should consult your attorney to determine if you can legally ask to see an applicant’s Green Card, passport, or visa to verify his or her status.  Clearly you can’t discriminate, but you don’t want a resident who might be deported by Immigration and Customs Enforcement (ICE), leaving you with unpaid rent or damaged property.
9. Number of tenants in the unit —  Some applicants may be planning on providing a home for all their relatives, on your dime.  I know of a case in which a single man rented a two-bedroom, one-bath apartment, and within a couple days 15 siblings, aunts, uncles, and cousins crammed into the unit.  Needless to say, when the dust settled and the tenant left, the clean up was delightful.
10. Exotic pets —  Many animals are illegal to own,  breed, and sell, such as some species of snakes, spiders, lizards, and birds. For sellers, some of these animals command large amounts of money, and your quiet property may be a great place for them to fly under the radar.

What are prospective tenants’ trickiest tricks?

Identity theft, for one, is rampant. Renters who wants to falsify their applications have numerous resources at their disposal, and new schemes are popping up all the time. The Bureau of Justice Statistics (BJS) estimates that more than 15 million Americans’ identities are stolen each year.

The Federal Bureau of Investigation refers to stolen identity as “a powerful cloak of anonymity for criminals and terrorists.”  Stealing an identity is an easy crime to commit, and because some criminals are high-tech wizards, detecting and prosecuting them can be very difficult.

Borrowing identities from family and friends without criminal records or bad credit histories is another common way prospective tenants try to pull the wool over property manager or landlord’s eyes. Candidates borrow photo IDs from people with “clean identities” and then find a forger to create a new photo ID, which combines the applicant’s picture with the credentials of the “clean” family member or friend.

Often applicants take their plans a step further, bringing the “clean” person’s birth certificate and a utility bill down to the Department of Motor Vehicles to get a state photo ID. Nothing new, but people are still getting away with it.

Of course, some renters simply lie on their applications, hoping you’ll be like the young property manager from California who didn’t thoroughly check the meth chemist’s background.

And it’s not uncommon for applicants to reply “no” to the “have you ever been arrested for a felony” question on the application, and only later do you find out they sport a rap sheet that would make Bonnie and Clyde blush.

How do you spot the next “bad” tenant?

Well, there are some proven ways to detect potential problems.  Many experienced property managers have developed a “sixth sense” about people and, based on that experience, can easily detect when a prospective tenant is hiding something.

Read more at Buildium Property Management Software

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