How to Identify Red Flags on Rental Applications

If you are looking for rental horror stories, you need look no further than Buzzfeed and social media sites like Reddit. You'll find stories of unpaid rent, damaged apartments, unreasonable tenants, scams, and unpaid utilities and charges. No landlord or property manager wants to rent to this kind of horror-story tenant.

Fortunately, there are ways to protect yourself and prevent getting into a contract with this type of person. Protect yourself by avoiding red flags on rental applications.

Lack of Rental History

Lack of rental history can be a red flag on your rental application, but it depends on the circumstance. For example, if your tenant is younger, it would be absolutely normal for them to have a limited history noting they have been living with family. The pandemic also sent many hardworking persons home to live with family, so it wouldn't be odd to have a limited set of referrals during this time. Another reason a rental history may be limited for a good reason is if the person was a homeowner and has now shifted to rentals, such as after a divorce.

Lack of rental history becomes a red flag when there isn't a good reason why this history can't be provided. Be aware of applications without rental history or reason.

Self-Reported Credit and Income

Most people will honestly report their credit and income if asked. Some prospective tenants will also attempt to save on fees by providing their own verification, such as providing a credit report of their own to help avoid additional fees. Yet while most people are honest, the few that are not create a red flag for the rest.

Self-reports are a simple way for bad renters to falsify information by sharing outdated reports or pay stubs or digitally altering information. Since most people don't have the skills to create a "Catch Me if You Can" style con, an experienced property manager may be able to spot a fake. If you don't feel confident in this evaluation, however, it's best to get your reports directly from credit agencies and/or employer verification.

Hurry, Hurry, Hurry

Prospective tenants in a hurry can be tenants with a problem. Watch out for a red flag when tenants appear to be in an unreasonable hurry. An unreasonable hurry could include refusing to view the rental before submitting an application, especially if the renter is local (long-distance renters can take a video tour). Rushing through the paperwork without reading and/or asking the landlord to waive any part of the process should be a red flag that the prospective renter may have something to hide. Offering cash in lieu of research, such as an additional deposit to avoid a background check is an example of hurried tenants to avoid. A reasonable hurry includes a tenant whose previous rental is being sold, is relocating because of a job offer, or even trying to meet an end-of-month rental deadline. In today's current tight housing market, it may seem as if everyone is in a hurry. Your best tools to tell the difference are by balancing this task with the rest of the rental application information.

Incorrect or Missing Information

Some renters with a poor rental history will attempt to gloss over their red flags by either omitting or falsifying application information. Avoid this red flag by making sure applicants are informed up front that incomplete applications will not be processed. Use common sense measures to cross-check self-reported information such as checking a driver's license and using third-party verifications such as employment income tools as well as credit and or background check agencies.

One commonly falsified set of information is personal references. After all, it's not too hard to ask a friend to say you'll do a great job. Because of this flag, many property managers are moving away from the request for personal references. Instead, property managers are seeking former rental references from landlords and property management to better gauge a renter's qualifications. Personal references may still be appropriate for situations listed earlier if a renter has a limited history or life change.

Identifying these red flags in prospective renters will help you better manage your rental, and create a more fair and equitable opportunity for future renters. Understand that a red flag simply means you need to explore the situation further, and is not always an automatic denial.

To view the original article, visit the Wise Agent blog.