Tenant Screening

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.

Hurricane Preparation Checklist for Landlords and Property Managers

preparedness_checklistWith 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.

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.

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

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.

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!

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?

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.

How to Check Business Credit Rating

Much like your own personal credit rating, businesses are assigned credit ratings. These numbers, on a scale from 0 to 100, are a sign of how reputable the business is when it comes to dealing with creditors. An optimal credit rating for a business is 75 or higher. You can check a business credit rating for yourself, as long as you have the right information.
Find a reputable website where you can check a business credit rating.  At www.starpointtenantscreening.com , you can even search for a business and select the right one from a list.

Ask for the business identification number. A FIN or an EIN is helpful when you want to check a business credit rating. You can get the identification number from the owner of the business. However, some owners are reluctant to give this information out. It’s similar to a person’s social security number, and many businesses protect this information for their own security.

Check the personal credit of the business owner. Some businesses, especially small businesses, are funded based on the owner’s personal credit rating. If you find out the credit rating of the owner, it’s a safe assumption that the business has a similar credit rating.

Equal Access Rule: LGBT/Gender Identity

HUD on Jan. 24 proposed a rule that would prohibit discrimination in federal housing programs on the basis of sexual orientation or gender identity. The rule is available at http://bit.ly/hLMC0H. HUD says that lesbian, gay, bisexual and transgender (LGBT) individuals and families are being arbitrarily excluded from housing opportunities. HUD reports that 20 states, the District of Columbia and over 200 localities have similar laws.The proposal clarifies that the term “family” includes LGBT families and couples and also prohibits inquiries regarding sexual orientation or gender identity in all HUD-assisted housing or housing with financing insured by HUD.

While this proposal is limited to HUD-assisted housing, there was movement in the last Congress to expand the protected classes in the Fair Housing Act to include not only gender identity and sexual orientation, but source of income as well. At this time, it is unclear whether such efforts will emerge in the 112th Congress.