Landlords face a number of hurdles when they choose to rent a residence. Whether they own a home, apartment, condo or even a piece of land, landlords have significant exposure when they allow someone to pay them to live on their property.
States have specific laws about how much liability a landlord has due to the actions of a tenant. For example, a court in Florida recently allowed a civil judgment against a landlord for $1 million for allowing a tenant to keep dogs that attacked a repairman, causing significant physical trauma. Although the landlord had no contact with the animals, the company that owned the buildings was held responsible for the tragic accident.
Therefore, it is imperative that landlords have all the information necessary to make a good decision before renting to a tenant. New landlords often ask, “What should I consider when renting to a tenant?” The answer to this question depends on the state in which the landlord’s property lies and other factors, but there are some general facts a landlord should gather before making a rental decision.
- Rental history. Past history is the best indicator of future actions, and a rental history can be very enlightening for a prospective landlord. Late rent payments, reports of moving without notice or breaking a lease without paying the balance, and damage reports can quickly tell a landlord that this tenant may be trouble. On the other hand, on-time rent payments and good references from a former landlord likely mean that a tenant is a good risk.
- Credit report. It is important to know a tenant’s credit score in order to determine if he or she can pay the rent. It is also important to know if the tenant will be able to pay any additional costs that many incur after moving out. Once a tenant leaves, the landlord may have to pursue payment for broken fixtures, damaged appliances or other property problems. A tenant with a good credit score is more likely to be able to pay for the damages and will be motivated to do so.
- Criminal background check. Unfortunately, today’s world is a dangerous place in some respects, and most landlords want to provide a safe environment in their apartment complexes or neighborhoods. Knowing that a person has a criminal background may be important in promoting safety for others and for the landlord.
- Employment history. In many states, landlords are allowed to gather information about a potential tenant’s employment history. This can be valuable information that will let a landlord know if a future tenant has a history of “job-hopping”; this can be a good indication that the tenant will be less than reliable with handling rental obligations. On the other hand, a tenant who has been on the same job for 20 years is not only likely reliable but also will be less likely to leave his or her job suddenly. This can be an important consideration for landlords who may have to garnish wages to collect money that is owed to them.
Being a landlord is about more than simply signing a rental agreement and collecting the rent once a month. It also means making wise choices in tenants, and information helps landlords choose the right people for their rental units.