Professional tenants are vampires. They suck the lifeblood of both your property and the neighborhood, moving in with no intention to pay, and living rent-free for up to two years.
If you think I’m being melodramatic, imagine paying the mortgage on your property for two years with no rental income to help cover it. Then imagine having to hire a lawyer to clear out the vampire infestation. Then imagine the damage to your property, once the villains are finally gone.
Has the mood been properly set for a horror story?
Tenant Screening: The Single Most Important Activity in Property Management
Benjamin Lyons, a landlord based on Miami, has seen more than his fair share of professional tenants.
It starts out simply enough: a kindly, charming man or woman applies to rent from you. If you’re smart, you run tenant credit reports, criminal background checks, and eviction reports on them.
Or maybe you cut corners, and you never see these tenant screening reports and their red flags. Benjamin didn’t bother to run background checks on his rental applicants, at first.
Savvy landlords reject the rental application as soon as they see the horrible credit report and eviction history report.
Even as you collect rental applications and run tenant screening reports, give yourself bulletproof protection against lost rents by insuring against them. For a few hundred bucks, you can buy rent default insurance: if the tenant stops paying the rent, the insurance company pays it for them until you finish the eviction process and replace them with a more reliable renter. See Steady for an example of rent default insurance.
Cue the Sob Story
Then the applicant calls on the phone, to explain that they fell on hard times, lost their job (through no fault of their own, mind you), went through a gut-wrenching divorce, lost their sister to tragedy. Maybe a combination of all three. Maybe there were identity thieves involved, or Nigerian princes, or shark attacks, or zombies.
But they appeal to your sense of humanity, to your heartstrings, and tell their tale in a way that makes you want to help them get back on their feet again.
So you do your good deed for the week and offer to sign a lease agreement with them, congratulating yourself for your open-mindedness and willingness to help people on hard times turn their lives around.
Then they don’t bother paying rent.
Delay Tactics Part I: Playing on Your Empathy
Two months after moving in, Benjamin’s tenants stopped paying the rent.
Benjamin called them to ask what’s going on, and they delivered another sob story. In his case, he told the family-health-problems story.
The details of the story vary. It could be “I’m having health problems,” or “They cut my hours at work,” or “My daughter needs surgery.” They ask oh-so-nicely for you to please, please not file eviction, and just give them two more weeks to pull the money together.
Two weeks go by. No rent arrives. You call again. Maybe they dodge your calls, or maybe they give you more sob stories, and ask you to wait just a little bit longer.
This continues until you finally get fed up and start the eviction process.
Delay Tactics Part II: Playing the Legal System
Benjamin waited two months before even starting the lengthy eviction process. He served the eviction notice, waited for the mandatory waiting period to end, then filed in court.
But professional tenants know every loophole in the law, and they will foil you. Benjamin’s tenants gave him a partial payment and another sob story.
Because he accepted the payment, he had to start the eviction process all over again.
Which, of course, he didn’t do right away. The tenants had promised to catch up on the rent! So he gave them time to do it. But no rent came in, and eventually he filed again for eviction.
This time, Benjamin made it to the hearing. But the tenants had a story ready for the judge, one of unfit living conditions in the property. The judge ordered Benjamin to refile for a hearing when he had proof that the property was habitable.
Delay Tactics Part III: Dirty Tricks
Benjamin had to then provide written notice of entry, a day before entering the property. When Benjamin entered the property to take photos and prove the property was in perfectly good shape, he found that the renters had systematically made the property “uninhabitable” by the technical definition in the law.
It went on like this for two years.
At one point, towards the end when the tenants had run out of most other tricks, they called the local newspaper with a scoop on a “local slumlord taking advantage of underprivileged residents.” The paper ate it up and published it. Colleagues, friends and relatives saw the story and asked Benjamin about it for months afterward.
It was a horror story for Benjamin.
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How to Spot & Avoid Professional Tenants
So what can landlords do to avoid parasitic professional tenants?
First, they must, must screen all tenants extremely diligently. Tenant credit reports and criminal background checks are only the beginning. Be sure to use a company that includes an identity verification with all background checks.
Most importantly, run an eviction history report.
Second chances and compassion are great – so give money to local charities that help people get back on their feet. That way you voluntarily give however much you want, and don’t ruin the returns on your investments.
Don’t rent to someone who’s been evicted in the last five years, unless you have the rent deducted directly from their paycheck.
Beyond Tenant Screening Reports
Good screening does not end there either. Verify their employment, and their income. Talk to their supervisor to see what kind of employee they are. Do they show up every day on time? Do they ever come in reeking of booze? How likely are they to remain employed? How likely they are to receive a promotion?
Talk to their current and prior landlords, and verify that the contact listed as the applicant’s landlord really is their landlord (check online public records and ask for corroborating evidence).
Walk through the applicant’s current home, and see how they treat it. Look for signs that it really is their home, such as photos of them mounted on the walls.
In addition to tenant screening, you can also buy insurance against the tenants defaulting on rent. If the tenant stops paying, the insurance company pays it until you complete the eviction process and replace them. Check out Steady as an inexpensive example.
Report Rents Payments to the Credit Bureaus
As both a carrot and a stick, report rent payments to the credit bureaus. It rewards good tenants who pay their rents on time, and penalizes late payments and rent defaults.
Granted, professional tenants tend not to care about their credit. But it leaves a better paper trail of their misbehavior.
SparkRental recently started offering this service, as part of our online rent collection service.
Plus, when you advertise on the rental listing that you’ll be reporting rents on tenants’ credit reports, it helps attract the right kind of renter and deter those who habitually pay rent late — or not at all.
Professional tenants are a blight that give all renters a bad name, and make trouble for their neighbors as well as landlords.
It may be extra work now, but preventing vampires from moving in is a lot easier — and cheaper — than getting them out later.♦
(Wow! We didn’t once make a “deadbeat” tenant joke, with all that zombie and vampire talk! Never too late…)
I think this is vital information given the costs to get rid of these tenants. Enjoyed reading your article, The website style is perfect : D. Just right process, cheers
Not nearly enough landlords take the risk of professional tenants to heart. Extremely expensive, I’m going through a year-long eviction myself right now with a set of deadbeat tenants playing the system.
Thanks for sharing!
I didn’t know it was legal to ask all those “character reference” questions off the tenant’s supervisor and HR.
Sure – landlords can ask character-related questions, they just can’t take into account any of the factors listed by Fair Housing laws (race, gender, disability, etc.). It’s important landlords know what kind of person someone is before handing them control of something worth hundreds of thousands of dollars, right?
I would not as an employer risk a slander or defamation lawsuit because I spoke to a potential landlord of my employee. The only thing landlords get from me is dates of employment and salary.
Certainly that’s your right as an employer. Most (good) rental applications do include a release clause however, authorizing communication between landlords and employers. But obviously your business is, well, your business!
I frequently get the same BS from employers as Gilead just displayed. So I have a list of employers that won’t talk. Any time they call me for a reference on a potential hire (which doesn’t happen very often, for sure, but it does happen), I return the favor and give them the “Gilead minimum”.
Vampire avoidance! Great job Brian!
Thanks for sharing your tips!
Great article! But the pictures were a bit….much. Some of us aren’t horror movie fans. Next time not so creepy please.
Here’s to good tenants and no financial vampires!
I do not think that there are professional tenants! What I am sure that exist are dumb landlords who try to take advantage of tenants. But when these landlords mess with the wrong person they face severe consequences!
Then by all means, go out and spend hundreds of thousands of your own dollars to buy a property, and let people live there rent- and consequence-free.
you are awesome I just evicted a professional vampire. Oh, what
an ordeal. Everything was by the book and on lockout day he acts
all surprised, did not pack a thing, and is now sending me non stop
threatening emails about his stuff and how it better not be moved, etc…
ARGH!!!!!!!!!!!!!!! This was through a property management company that allegedly does screening. I think this pm company called renter’s warehouse only cared about their commission and they got it and i am stuck with the aftermath.
I’m so sorry to hear that Erick. Make sure you know your local laws about removing his belongings, some cities are extremely tilted toward tenants in this regard.
The good news is that professional tenants are a nightmare you only live through once, because from here on out you’ll be aggressive and thorough with your tenant screening. Best of luck, and keep us posted!
I think I found a professional tenant who is mad that someone is educating the landlord about his tricks.
Haha, indeed Bobby!
There absolutely are “professional tenants”. The really sad part is that the ultimate results of society’s tolerance for their existence is that rents are significantly higher than they would be absenting all the BS landlords must put up with. Of course this is the greatest for the least expensive housing, because the percentage losses are the greatest there. So what we have is all the honest poor people (definitely the majority) subsidizing the few dishonest “professional tenants”.
Can you imagine what groceries or gas would cost if “professional shoppers” were allowed to take anything they wanted for 30 days or more, and the store had to go to court to evict them from the store, with little prospect of actually collecting the cost of 30 days of groceries?
Here here Thomas!
It’s true: good people end up subsidizing the rotten apples, in any given neighborhood. One of the many unintended consequences of anti-landlord regulation.
Awesome tip to prevent these “Professional Tenants” to be a future pain. And yes It may be extra work now, but preventing vampires from moving in is a lot easier — and cheaper — than getting them out later.
Thank you for shedding us light on how to defeat vampires and zombies! Kidding aside, online rent collection does help, as does aggressive tenant screening.
So true ….smh there’s allot of forums where ppl attack landlords calling them leeches who live off ppl I tell them the same thing go and buy yourself a home then if you don’t like renting ….like they feel entitled to live for free or not pay the full amount like if you owe them something ….owe some stranger ? These ppl are nuts
I couldn’t agree more Charlie!
Great article. I’m in a horrible situation. Can’t wait until this nightmare ends. Thanks for the article.
I’m so sorry to hear that Suzan. Best of luck in resolving it quickly!