Make Finding a Property Management Co. Easier on Yourself by Asking the Right Questions, Part 4 of 4

This is Part 4 of a 4 Part Series where we have outlined important questions to ask a property management company before hiring them.

Part 1 Companies Credentials

Part 2 Property Management Services
Part 3 Property Management Fees
Part 4 Tenant Screening Process

Property management companies come in all sizes, capabilities and expertise. Just because one works for one investor does not necessarily mean they will work for you. Below we have outlined some important questions to ask a company during your initial interview process regarding their tenant screening process. Their answers to these questions will give insight into their business capabilities and can provide you with an understanding of the type of services they offer which are important to you.

Part 4 - Tenant Screening Process

Your new tenants moved into your vacant apartment last month and everything seems okay so far. She works and he has his own business, a consultant of some sort so he works out of the apartment. You like the fact of having an adult around your premises because you have had some issues with neighbor kids being rowdy and figure the kids will be less of a problem with an adult being around during the day. On their application they showed ample income to afford the rent and they seem like a really nice couple so you decided there was no need verifying credit history, previous rental history or if any evictions were recorded against them.

Now read below the different types of background checks that you should have performed and using the scenario above you will quickly understand what unfavorable consequences could occur if this is not done.


Credit check
A thorough credit check report will show past to present payment history of applicant. This will give you good insight into an applicants ability to manage money and debt. All credit score reports come with what is called a "FICO" rating. The "FICO" rating or score runs between 305 and 850, with 850 being the best. A general rule of thumb is 650 and up is good, 550 to 649 is open for review, and 549 or less may not be a suitable applicant. Evictions, bankruptcies, mortgage defaults and judgements may also show up on a thorough credit check report.
Note, Individual landlords may no longer receive copies of credit reports, or actual credit scores, of an applicant. The Tenant Credit Check report will simply inform you when an applicant passes your minimum credit grade that you have chosen for your property. A good alternative is to use a property management company or real estate agent to perform this for you.

Employment verification
Never assume an applicant will tell you the truth whether it be verbal or written down on an application form. It's your responsibility to verify this information with the proper source. In this case it would need to be verified through the companies human resource department or other employment authority. Also you may verify employment income by requesting to see their last few months pay stubs. This can confirm income is from legitimate sources and not illegal activities.

Criminal background check
Criminal Report includes felonies, misdemeanors, traffic violations, and incarcerations. The information in a Criminal Report comes from State records, Court records, and Departments of Correction records. Searches are made using first name, last name, and date of birth. A sex offender or drug trafficking could jeopardized a whole community especially in a multi-family atmosphere where you must make your property safe and habitable for all.

Eviction check
This report is run by using the applicants SS# and name. It pulls the past addresses associated to him/her and searches the housing courts database for any filings or evictions matching the name of your applicant. Evictions Report can include all court-reported evictions for all 50 states.

Rental history
It's always good practice to contact any previous landlord. Sometimes if the landlord is trying to get a tenant to leave their apartment they may say favorable things about the tenant only so that you will take them. But, you can at least verify the accuracy of the information such as lease terms, rent amount, occupants living there etc. Also drive by previous living quarters for further verification.

Karen McDaniel

Property Management and Vendor Network

Expert Tenant Cons - How Do They Operate?

Author: Lambert Munz

Eviction is a slow process that gives tenants anywhere from thirty days to four months of free living while the courts walk through the legal steps. Most of the time, the tenant leaves in the middle of the night, right before the final hearing. Even though the landlord gets a judgment, it becomes a useless piece of paper. In order to collect the landlord must track the suddenly invisible tenant, find any assets or locate the place of employment.

New right to privacy laws make tracking difficult. After all, where does the tenant go, now that they no longer live under the evicting landlord's roof free, like an adopted wayward adult child?
There are two types of evicted tenants. The first is seriously down on their luck, maybe the tenant lost a job, had a family crisis or severe illness. Regardless of the reason, they have no experience living life without an income. This type of person pays as much as they can, but it never is enough to make a full month's rent. When eviction time comes, they move in with a friend or family, live in their car or find a location in a vagrant village or homeless shelter.

The second class of evicted tenants is the professional deadbeat. They not only know the system, they perfect their use of it like a fine art form. This group has a job when they move into the rental, they have plenty of cash in their hand and they pay on the spot. Their last landlord sounded sincere when you called, gave them rave reviews and had a sound reason that the two parted ways. They had adequate experience on the job, working for a small company for several years. Sometimes this might not be the real income source. These may not be legitimate people or real jobs. They are friends and family that pose and give false information.

The second class of evicted tenants never leave the previous landlord on the application, because they were evicted for past due payments. They make it their profession to move every seven months. The pattern is clear, two months payment in advance as a deposit and the first month's payment. The second month comes a little slow and into the third month a partial payment is made. Eventually the well dries up and the landlord dips into the deposit. The tenant lived at the rental long enough to use the deposit and remain four months in arrears. They move right before the enforced eviction. In the mean time, they saved enough cash to move to the next unsuspecting landlord that doesn't have access to their history and begin the scenario again.

How does this happen? Most landlords are individuals, not companies or corporations with access to all the background information and credit reporting. These are "mom and pop landlords" that want to believe the person that so convincingly tells the tale. They have no weaponry against the professional deadbeat that hones the story to perfection.

The wayward tenants usually find that the individual managing their own property is an easy mark and they know what to say to make the situation appealing.
Without a thorough background check by a professional, the landlord loses valuable time and money with these professional cons. They have the cash and the hungry landlord can't resist the temptation to move them in now. Especially, if they have been suffering a long term vacancy.
These pros don't call property manager ads, but purposely look for ads without agent identification. The law requires that an agent Identify themselves in an ad If not by a company logo than with the word - Agent.
My eviction attorney informs me that he evicts the majority of the people are the same ones over and over again
Be careful out there.

My name is Lambert Munz and I have been licensed as a Real Estate Broker for 44 years with the CA Department of Real Estate. I currently am President of Arbour Real Estate Management,Inc. Background was as a commercial broker. Currently a property manager and have been for 27 years. We offer residential and commercial management services.I hold two designations - RMP Residential Management Professional and MPM Master Property Manager. Awarded by NARPM National Association of Residential Managers.Past President of NARPM Sacramento chapter.My services are available in Sacramento, California.
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