Reasons for Renters Insurance

Renters insurance, like homeowner insurance, is sold as a package. Renters insurance provides coverage for your personal belongings and personal liability (legal responsibility) in the same way that a homeowner policy does. However, rental policies do not provide coverage for the value of the building you rent, so the premium for tenant coverage is low.

Reasons for Renters Insurance: Typically, the homeowner’s policy that covers the building you live in does NOT offer any protection for your property, your cost to find other housing, or your personal liability. If you rent an apartment or a home, you will not always be required to have renter insurance by the lease, but without it you are often left out in the cold if the building is damaged or you are a victim of theft. Renters insurance will also cover you if someone is injured in your home or elsewhere due to your negligence.

Renters Insurance for College Living:

  • If you live on-campus: Check and see if your belongings are covered under your parent’s homeowners policy. If a student is a dependent under their parent’s insurance coverage, their personal belongings may be covered in the event of a covered loss.
  • If you live off-campus: Consider purchasing renters insurance. Renters insurance will provide coverage if your property is destroyed or stolen, or if someone is injured on your rental property due to your negligence. If you are dependent on your parents’ insurance, check with their agent or insurance company to see if the coverage extends to a dependent living away at school.

Multiple Roommates: Renters insurance usually covers you or any relative you live with. If you live with non-relative roommates, each of you would need your own renters insurance policy to cover personal belongings and personal liabilities. Check your insurance policy contract or talk to your agent or insurance company for more details.

Selecting an insurer for renters insurance

Coverage and costs vary greatly by company. It’s important to shop when choosing an insurance company. Comparison shopping takes a little more time, but it can save you money!

  • The key to comparison shopping is knowing what coverage you need and then getting premium estimates (rate quotes) from a number of insurers. Each policy should provide the same amount of protection for your home, its personal contents, liability protection, and medical payment coverage. If you want full replacement-value protection on your house and personal items, make sure this coverage is included in all policies you consider.
  • Renters insurance companies use one of three methods to sell their products.
    • Independent agents represent several companies and can give you several quotes.
    • Exclusive agents only sell the products of one insurance company.
    • Direct market sales are over the Internet or by mail or telephone.

    You can find insurance companies and agents through the phone book, on the Internet and television and by asking friends and neighbors.

  • Have the agent explain the exclusions and limitations in the contract and quote options for perils like flood and earthquake that are not covered under the standard policy.
  • Cost is just one factor to consider when choosing an insurance company. It’s also important to look at the company’s financial condition and how it treats its policyholders. A company’s financial information is available from the agent that represents the company.
  • It’s illegal for unlicensed insurers or agents to sell insurance. Business cards aren’t proof that an agent is licensed. If you do business with an unlicensed agent or company, it might not pay your claims or refund your premiums if you cancel your policy. If an unlicensed agent or company contacts you, check with your state insurance department immediately, so it can investigate. Your actions may protect someone else from being victimized.

Questions you should ask the agent

  • Are the agent and the insurance company licensed by my state insurance department? For how long?
  • How can I find out the claims history of the home before I buy it?
  • If I submit a claim, how will it affect my premium when I renew the policy?
  • What discounts are available?
  • What does the policy cover? What doesn’t it cover? What are the limits to the coverages?
  • How much coverage for my personal property do I need?
  • Should I buy flood insurance or earthquake coverage?
  • How will my credit history affect my premium?
  • Underwriting standards

Underwriting standards are rules insurance companies use to decide whether to insure your property. A company may decline your application for coverage if your property does not meet its underwriting standards. Each company has its own underwriting requirements, but typical ones include:

  • Age, condition, and square footage of your home
  • Property upkeep and maintenance
  • Type of construction (brick, frame, stucco, etc.)
  • Exterior lighting or security systems
  • Home value and proximity to fire protection
Posted in Renter Information | Leave a comment

Natural Disasters and Tenant’s Rights

When natural disasters strike affecting the condition of your rental properties, know your tenant’s rights:

  • If the premises are damaged or destroyed other than by the wrongful or negligent acts of the tenant so that the enjoyment of the premises is substantially impaired, the tenant may terminate the rental agreement and immediately vacate the premises. The tenant may vacate the part of the premises rendered unusable by the casualty, in which case the tenant’s liability for rent shall be reduced by the fair rental value of that part of the premises damaged or destroyed.
  • When the tenant moves out, the landlord must either return their deposit (plus interest, if applicable) within 15 days of termination of the lease if the landlord does not intend to impose a claim upon the security deposit; or justify in writing by certified mail, to the tenant’s last known mailing address within 30 days upon termination of a lease, as to why they are keeping a portion of, or all of the deposit. If the notice is not sent as required within the 30 day period, the landlord forfeits his/her right to impose a claim upon the deposit, unless the tenant fails to give proper notice prior to vacating.   If the tenant objects to the claim, they may take the matter to small claims court.
  • The landlord and the tenant should take pictures of the home, inside and out, showing the damage and keep them for future records. The pictures will be important should there be any dispute because of damage to the home.
  • If, due to a disaster, the landlord refuses to renew a tenant’s lease, terminates the month-to-month rental agreement or increases the rent substantially, a tenant can seek a court decision on whether the rental agreement or any part of it is unconscionable or if the landlord is acting in a retaliatory manner.
Posted in Uncategorized | Leave a comment

Hurricane Preparation Checklist for Landlords and Property Managers

With over 30 years of combined experience in credit reporting, background screening and information services, the StarPoint team is here to provide you with the very best in products, technology and service.

Below we have create a few checklist that may be beneficial to you as a landlord or property manager in the instance a hurricane or storm is near.

PRINT CHECKLIST – PDF

Gather Important Information:
•    Make note important phone numbers and information
o    Nearest Hurricane Shelter:
o    Map of Evacuation Route(s):
o    Local Police Department:
o    Local Fire Department:
o    Insurance Company, Phone Number and Policy Number:
o    Tenant’s Emergency Contact Info: (Tenant Name, Where evacuating, emergency phone numbers)
•    Notify friends and family of your plan

Contact your Tenants
•    Give your Emergency Contact Information to your tenants
•    Get your tenant’s emergency contact information
•    Ask your tenants to park vehicles against the garage door and keep the gas tank full
•    Move furniture away from exposed windows and doors
•    Take all pets indoors to shelter them from the storm
•    Ask them to fill bathtubs and sinks with water in case water supply in interrupted or contaminated; turn off main water to house
•    Garden tools, awnings and grills should be anchored or sheltered
•    Set the refrigerator on maximum cold; do not open unless necessary; keep a full stock of non perishable items and canned foods
•    Stay in central room or on the downwind side of the house; move to another room as wind direction changes
•    Close all windows and storm shutters
•    Bring all lawn furniture inside or store it
•    Turn off propane tanks

Protect your Property
•    Turn off main gas valve before the storm hits
•    Install storm panels, plywood, or shutters over all windows, skylights, doors and open vents; tape exposed glass to protect from shattering
•    Prune dead or dying tree limbs
•    Insert wedges in sliding patio doors; if not protected, damaging winds will lift them off their tracks and blow them into the house
•    Elevate appliances and furniture off the floor and cover with plastic
•    Keep swimming pools filled to 12 inches below the edge; cover the filter pump and turn off the electricity; add additional chlorine
•    Lower radio and television antennas, protect satellite dishes
•    Close all outdoor electrical outlets and cover with duct tape
•    Secure garage and porch doors

Red Cross Supply Checklist for you and your tenant(s)
Provided by The Red Cross – (View PDF)

•    Water at least a 3-day supply; one gallon per person per day
•    Food—at least a 3-day supply of non-perishable, easy-to-prepare food
•    Flashlight
•    Battery-powered or hand-crank radio (NOAA Weather Radio, if possible)
•    Extra batteries
•    First aid kit
•    Medications (7-day supply) and medical items (hearing aids with extra batteries, glasses, contact lenses, syringes, cane)
•    Multi-purpose tool
•    Sanitation and personal hygiene items
•    Copies of personal documents(medication list and pertinent medical information, proof of address, deed/lease to home, passports, birth certificates, insurance policies)
•    Cell phone with chargers
•    Family and emergency contact information
•    Extra cash
•    Emergency blanket
•    Map(s) of the area
•    Baby supplies (bottles, formula, baby food, diapers)
•    Pet supplies (collar, leash, ID, food, carrier, bowl)
•    Tools/supplies for securing your home
•    Extra set of car keys and house keys
•    Extra clothing, hat and sturdy shoes
•    Rain gear
•    Insect repellent and sunscreen
•    Camera for photos of damage

Checklist for After the Hurricane?
Provided by The Red Cross – (View PDF)
•    Let your family know you’re safe
•    Continue listening to a NOAA Weather Radio or the local news for the latest updates.
•    Stay alert for extended rainfall and subsequent flooding even after the hurricane or tropical storm has ended.
•    If you evacuated, return home only when officials say it is safe.
•    Drive only if necessary and avoid flooded roads and washed-out bridges.
•    Keep away from loose or dangling power lines and report them immediately to the power company.
•    Stay out of any building that has water around it.
•    Inspect your home for damage. Take pictures of damage, both of the building and its contents, for insurance purposes.
•    Use flashlights in the dark. Do NOT use candles.
•    Avoid drinking or preparing food with tap water until you are sure it’s not contaminated.
•    Check refrigerated food for spoilage. If in doubt, throw it out.
•    Wear protective clothing and be cautious when cleaning up to avoid injury.
•    Watch animals closely and keep them under your direct control.
•    Use the telephone only for emergency calls.

Posted in Rental Checklists | Leave a comment

Tax Advantages to Renting Your Property

Rental real estate offers tremendous tax advantages and opportunity for tax planning. Taxpayers can depreciate property, deduct interest on borrowed capital, exchange rather than sell properties to defer tax on gains, use installment sales to defer tax on sales, and profit from preferential rates on long-term capital gains. Most importantly, you can generate or monthly income, with depreciation deductions that effectively turn the actual income into tax losses.

Deductions Are Not Unlimited
Real estate income and loss is generally considered passive income and loss for tax purposes. Taxpayers generally cannot use passive activity losses (PALs) to offset ordinary income from employment, self-employment, interest and dividends, or pensions and annuities. The rental real estate loss allowance and real estate professional status are two important exceptions to this rule.

As one exception to the PAL rules, taxpayers with adjusted gross incomes of $150,000 or less can claim a rental real estate loss allowance of up to $25,000 for property they actively manage. Active management does not require regular, continuous, or substantial involvement. However, it does require that the taxpayer own at least 10% of the property. Also, to qualify for the exception, married taxpayers must file jointly.

The second exception allows real estate professionals not to treat their rental activity as a passive activity – losses are not limited to passive income. This exception requires material participation by the taxpayer which is demonstrated by meeting one of seven tests. These tests are complex and include the number of hours of participation and the facts and circumstances of the participation in the activity.

Vacation homes, however, are taxed depending on how long the homeowner rents the property. If you rent your vacation home for fewer than 15 days during the year, no rental income is includible in gross income. If you rent the property for 15 or more days during the tax year and it is used by you for the greater of (a) more than 14 days or (b) more than 10% of the number of days during the year for which the home is rented, the rental deductions are limited. Under this limitation, the amount of the rental activity deductions may not exceed the amount by which the gross income derived from such activity exceeds the deductions otherwise allowable for the property, such as interest and taxes.

Posted in Home, Rental Industry, Uncategorized | Leave a comment

Are you putting funds aside for property repairs?

This is something that is commonly overlooked and underestimated.  As a landlord, you have an obligation to keep your rental property in good condition for the tenant; not to mention, you want to keep your “investment” in the best condition possible to maximize your return both through rental income and once you decide to sell.  I am talking about improvements but I am also referring to the large repairs that must be completed on a home from time-to-time.  These repairs include roof, windows, siding, exterior/interior full paint, decking, flooring, lead based paint repairs, and so on and so on.  It is imperative to make sure that you put aside funds to cover these repairs.  According to www.costhelper.com, here are some estimates on major house repairs:

Roof

Do-it-yourself materials to install an asphalt shingle roof on an average one-story ranch-style home (with a gently sloping roof of 1,700-2,100 square feet) can run $680 -$3.700, depending on the quality of the materials. Having the old roofing materials removed and new asphalt shingles professionally installed is about $1,700 -$8,400 on a typical ranch-style home, depending on materials and location.

Gutters

Expect to pay around $3 -$5 a lineal foot to have someone install vinyl (PVC) gutters, or about $360 -$600 for 120 feet and $750 -$1,250 for 250 feet.  Having aluminum gutters installed averages about $4 -$9 a foot plus downspouts at $5 -$8 each, or $500 -$1,200 for 120 feet and $1,050 -$2,400 for 250 feet.

Exterior/Interior Paint

When hiring a painting contractor, paint and supplies make up about 15-25 percent of the cost, while 75-85 percent goes for labor. For exterior painting costs typically average $1,500-$3,000 for an average single-story, three-bedroom home, but easily run $3,000-$5,500 or more for a multi-story or multi-level larger house.    For interior painting, expect to pay $200-$400 to have a 12×12-foot room painted by a licensed contractor with brand-name paints; a 15×20-foot room or larger runs $300-$700 or more; and a 1,200-1,500 square foot home is $1,100-$2,000 or more. Having the ceiling painted bumps the cost to the high end of the scale.

HVAC

Adding central air conditioning to an existing forced-air heating system or installing a new HVAC system in a 2,000-square-foot house averages $3,500 -$4,000, and can be done by two technicians in 2-3 days, with little or no change to the existing ducting.

Keep in mind that with the new EPA laws governing renovation and work completed on a house built prior to 1978 there is a lot more cost involved in making repairs.  This cost will be most likely passed on by the contractor to the homeowner.  The cash reserve required for your rental property will vary with the style and size of the home.  A good rule of thumb is to keep at least 4x the monthly rent in a cash reserve.

Blog Post by John Durham, Marketing/Communications Director, Excalibur Home Management is an Atlanta Property Management Company

Posted in Home, Rental Industry, Uncategorized, Welcome | 1 Comment

8 questionable rental fees to avoid charging

 Not all fees are created equal. In fact, some stretch the law.

 1. Excessive late-rent fee
The Landlord Protection Agency, a website that provides advice for landlords, has this to say about late-rent fees: “Late charges should hurt. … It should be a painful enough fee that the tenant will not want to pay again. Ever.”

Although the site says its forms are legally credible, this free advice may have bypassed such review. Lawyers in any state will tell you that late-rent fees are not to be used as punishment or deterrent.

“The purpose of the late fee is an attempt to try and compensate the landlord for the inconvenience or cost associated with a late payment,” says Steven R. Kellman, director of the Tenants Legal Center of San Diego. “It is not meant to be a bully stick waved at the tenant. The idea that I’m going to whip you each day you don’t pay, that’s not the intent of the law.”

2. Overnight guest fee
Here’s another fee that doesn’t pass the test.

Plenty of landlord notices lay out a $25 charge for a tenant’s overnight guest, for example, or a $50 rent increase for an additional occupant.

There’s just one obstacle: federal law, says Kellman, who sees plenty of unenforceable lease provisions that naive landlords pull from the Web.

A landlord can limit total occupancy at a point set by law — typically two people per bedroom plus two — to protect his unit. He can also require that a permanent occupant pass a criminal background check. But he can’t tack on arbitrary charges, Kellman says.

“That’s illegal, because it’s discrimination under familial status,” he says. “If you want to have a relative move in or have a baby, that’s your right.”

If landlords are concerned about the extra cost of water or electricity, “then they need to get separate meters and you pay for what you use,” he says.

3. Unnecessary application fee
It’s OK for a landlord to pass along the cost he must incur to run credit and security checks. But some states limit the amount per tenant. And in all cases it is illegal for the landlord to take the fee and not run the check.

4. Repair fees
If you pay to rent an apartment, part of the deal is that the landlord keeps the property in working order. In fact, he is legally responsible for maintaining a fit and habitable dwelling. He cannot charge tenants for repairs.

The exception would be if a tenant broke something through blatant negligence. In that case, the tenant would have to fix it.

If landlords were allowed to charge for upkeep or make tenants do it, some might allow units to fall into disrepair, leaving tenants in substandard housing. Legislators passed laws to prevent that.

“It’s the same reason that we require people who make Cheerios to have clean factories, and why we don’t allow Pintos to have exploding gas tanks,” says Janet Portman, a housing lawyer with Nolo, a publisher of legal guides. “It just comes down to a legal principle that you just can’t do that.”

5. Redecorating or cleaning fee
This is essentially to pay for the extra fix-ups landlords do between tenants, maybe a deep carpet shampoo or repainting the walls. But this is not the tenant’s responsibility. The tenant has covered his own damage through the security deposit. Any scuffing or fading that’s the result of normal wear and tear should not come out of the tenant’s pocket.

This onerous fee might also be called an automatic damage fee, a refurbishing fee or a move-in fee.

“If a landlord generally cleans a unit after one tenant leaves and another tenant moves in, that’s not typically a fee a landlord can assess a tenant,” says Peter Iskin, a lawyer with the Legal Aid Society of Cleveland.

6. Administrative or processing fee
It costs money to advertise a unit, and some managers want to pass this cost along to tenants, although they’re often vague about just what this $50 to $300 is for.

Sometimes it’s used only in lieu of a credit-check fee; other times it’s applied toward advertising, staff and even printing-paper costs.

“There are an immense number of fees being added that 10 years ago we didn’t get from people,” said Del Walmsley, a landlord with multiunit buildings. And this one “is just garbage, a way to get upfront money from people.”

In some states, the law agrees. Massachusetts and California, for example, have strict regulations that prevent landlords from passing along basic overhead costs. Staff and office supplies dressed up as administrative fees? Those won’t get by a judge. Late fees that exceed the reasonable costs incurred by the landlord for that extra trip to the bank? Those also won’t fly.

 

7. Any fee called “a nonrefundable deposit”
A deposit, by definition, is returned when certain conditions are met. A security deposit, for example, is returned to the tenant if the unit is left in good condition. If it won’t be returned, it’s a fee, not a deposit.

If someone asks you for a “nonrefundable cleaning deposit,” for example, tell them that you’ve already given them a security deposit.

8. Finder’s fee or holding fee
This is a fee the tenant pays to supposedly hold the unit, but in many places they’re illegal, lawyers say.

Also, such fees don’t provide the tenant a legal guarantee that he will get the apartment. Landlords can also be harmed, by taking units off the market only to have a tenant change his mind.

“Making these types of agreements that are not clearly legal creates complex situations that very often cause a problem,” says Michael Kelley, director of rental housing resources for the city of Boston.

Only a licensed broker may charge a fee, and that’s for additional assistance in locating an apartment.

Check your state laws
See what fees are legal in your state by checking with the consumer-affairs division. The city, or a university housing office, may also list fees that landlords may legally charge tenants in your area.

“If it’s not listed as a legal fee, then it’s in fact an illegal fee — even if it’s not listed that way,” Kelley says

Posted in Credit Reports, Home, Rental Industry, Tenant Background Check, Tenant Credit Reports, Tenant Rights, Tenant Screening, Uncategorized, Welcome | 1 Comment

Why Rental Property is a Good Investment Now

The U.S. is on the cusp of a fundamental change in our housing dynamics.  Changing demographics and new economic realities are driving more people away from the typical suburban house and causing a surge in rental demand.  Tomorrow’s households want something different. They want more choice.  They are more interested in urban living and less interested in owning.  They want smaller spaces and more amenities.  And increasingly, they want to rent, not own.  Unfortunately, our housing policy has yet to adjust to these new realities.

Booming Rental Demand

  • One-third of Americans rent their housing, and nearly 14 percent—17 million households—call an apartment their home.
  • Changing demographics mean changing housing preferences.
    • Married couples with children are now less than 22% of households and that number is falling.  By 2030, nearly three-quarters of our households will be childless.
    • 78 million Echo Boomers are beginning to enter the housing market, primarily as renters.
    • 78 million Baby Boomers are beginning to downsize, and data shows seniors are more likely to rent after moving.
  • Between 2008 and 2015, nearly two-thirds of new households formed will be renters.  That’s 6 million new renter households.
  • Because of these changes, University of Utah Professor Arthur C. Nelson predicts that half of all new homes built between 2005 and 2030 will have to be rental units.

A Pending Supply Shortage

  • New multifamily construction set an all-time post-1963 low in 2009 at 97,000 new starts.  2010’s construction levels are predicted to be even lower.
  • We need to be building an estimated 300,000 units a year to meet expected demand.   Yet most forecasts suggest we will start fewer than half that in 2011.  That’s not even enough to replace the units lost every year to old age.
  • While there is a glut of single-family housing, on the apartment side we are heading toward a shortage as early as 2012.  The shortage of affordable rental units is particularly acute.  The Harvard Joint Center for Housing Studies estimates a 3 million unit shortage nationwide.
Posted in Rental Industry | Leave a comment

SSN Lookup – Check to see if a Social Security Number is Real

Are you unsure if a SSN is valid or do you think a tenant gave you a fake Social Security Number? There a few helpful websites out there to decode social security numbers including one by Steve Morse which by entering the first 5 digits of the person’s social you can find out the state and date range the SSN was issued.

SSN Decoder

SSN Decoder

For example I will check the social security number beginning with 421-11-xxxx.   I can see the social was issued in Alabama between 1981 and 1982.

If you would like more detailed information and would like to verify if the SSN matches the person’s name and if the SSN is listed as a deceased person you can purchase StarPoint Screening’s SSN Identification Verification Report. SSN ID Verifier searches more than 19 billion public and proprietary records to instantly verify identity based on basic driver’s license information and potentially fraudulent identities.

Sign-up and Order Now!

Posted in Tenant Background Check, Tenant Screening | Leave a comment

What does a -9999 credit score mean?

Fico -9999 credit score

Fico -9999 Credit Score

Have you ever ran a credit report and received a -9999 FICO score?  The FICO score range is between 300 and 850 but according to TransUnion a consumer would get a score of -9999 when the consumer has 2 or fewer trade lines for evaluation available.  If the consumer currently does not possess enough active credit accounts then TransUnion can not generate a positive score.  Also, please review our guide on how to read a TransUnion Credit Report.

Q. When does a -9999 FICO score usually appear?

A.In most cases we see a -9999 FICO score when a credit report is run on someone under the age of 20 and who has not yet applied for auto or student loans and who has not yet used a credit card or other line of credit. In other cases a -9999 can be generated for someone who has all their accounts in collections and two or less active tradelines.

Q. What can I do if my applicant receives a -9999 FICO score?

A. First you can review the credit report to see why the applicant received the score.  Are they a young adult without established credit or are they an adult who had filed for bankruptcy, has closed accounts, or has all their accounts in collections?

Posted in Tenant Credit Reports, Tenant Screening | Leave a comment

Rental Applications and Tenant Screening

Aggressive tenant screening is an investment that pays for itself many times over, by preventing most tenant defaults, tenant damage, and tenant lawsuits. But how exactly should you screen these rental applications? How do you measure tenants’ relative worth?First, let’s spend a moment discussing the rental application itself, and what data you need to make sure you collect.

Make sure each applicant fills in their current landlord’s name and phone number on the rental application, as you’ll want to call them for a reference on what kind of tenant the applicant is. Granted, tenants can lie and fill in a friend’s name and number on the rental application, or sometimes their existing landlord will be so desperate to be rid of them that they will lie, but this isn’t often the case, and when it is, you can usually tell that something is wrong.

Be sure the applicant fills in their employment and income data on the rental application as well, including a supervisor’s name and phone number, so you can verify the information. When you call the supervisor to verify the applicant’s employment and income, also verify what kind of employee they are, and the chances of their continued employment.

Find out the rental applicants’ pet and child status: do they have children or pets? How many? What ages? What breeds? We’ll talk more in a moment about discrimination, but it’s worth noting here that you cannot, under any circumstances, deny a rental application because of their familial status, including anything to do with their children. Don’t ever list children as a reason why you denied someone’s rental application, it’s illegal.

Be sure to collect information about their assets, such as vehicles, bank accounts, or any other kind of property. This may seem unnecessary, but in a year from now when your tenants default on their rent and leave your rental property in a state of shambles, you’ll know how to collect the money from them after winning a judgment in court.

Finally, make sure your rental application includes a section for them to state whether they’ve ever been evicted, been sued, been convicted of a felony, and other such disclosures. If they go bad as a tenant, and you discover they’ve lied about one of these issues, you’ll have a signed statement of perjury you can show in rent court.

Other than verifying their rental history, employment, and income, you’ll also want to pull some background reports about the rental applicants from third parties. To be able to do this legally, you’ll need a release clause in the rental application, authorizing you to perform any background checks necessary to evaluate them as prospective tenants. First, check their credit history, and look for late payments, look for bankruptcies, and look for their amount of debt (any of these are very bad indicators). Second, check their criminal history, for obvious reasons. Third, check their eviction history, and, if available, their checking history to make sure they aren’t in the habit of writing bad checks. Say what you will about the entitlement to second chances, most people are either committed to paying their bills or they’re not; tenants who have been evicted once are astronomically more likely to default on their rental payments again.

Finally, a word on discrimination. The federal Fair Housing Act outlaws denying any rental application based on the applicants’ race, color, national heritage, religion, gender, disability, and familial status. If someone takes you to court over this issue, you’ll have to prove that you chose a different tenant over the suing applicant for a reason other than any of those seven reasons, which is yet another reason why you MUST collect detailed rental applications, perform detailed background checks, and keep records of all of them for at least six months. If a rejected rental applicant asks you why you rejected their rental application, tell them you’ll have to look up their application to check, and then mail them a letter specifying their credit, income, employment, or housing history.

As a last note on the matter, it is easy to unknowingly break this law, by stating in your advertisement for the property that you’d prefer a specific type of person (such as “looking for a young couple…”). Be extremely careful to avoid these mistakes, and because some states have different laws adding to the federal law, be sure to check your state’s laws as well. All of this trouble just to sign a rental agreement may sound like a lot of work, but when you find a good tenant, who will pay rent on time, keep your investment property clean, and not sue you, you’ll be glad you spent a little extra effort on tenant screening.
Author Resource:- Brian is a landlord who did his own tenant screening and property management for many years before reaching too many properties to continue managing them himself. He contributes regular real estate investing content to a variety of online resources for landlords.

Posted in Credit Reports, Home, Tenant Background Check, Tenant Credit Reports, Tenant Evictions, Tenant Rights, Tenant Screening | Leave a comment