Landlord Tenant Screening

It may be difficult for investors to find a good, safe investment in the current economy. There is uncertainty because of economic issues in Europe and the national debt. The stock market is a huge gamble. Gold has a high price and doesn't produce any sort of dividend. Bonds have a low yield due to low interest rates. There is, however, one good area to invest in the current economic climate. Rental real estate can offer both short and long term returns. A rental property can increase in value while offering a recurring revenue stream. There are plenty of distressed properties out there and plenty of opportunity to buy low. Demand for rental housing is also higher because people feel less secure about committing to a long term mortgage (and many don't qualify). An investor can immediately enjoy a positive cash flow while building equity, which eventually can be converted to cash by selling the property.

Unfortunately, even a local market with high prices to rent and low prices to buy can still carry risks. One of the biggest threats to the value of the investment is a bad tenant. A bad tenant might not pay the rent. A tenant that doesn't pay rent or damages the property will cost you lots of money. Your investment can easily turn into a burden and an expense, rather than an income generating asset.

In order to protect against nonpayment, vandalism, eviction proceedings, unsavory characters and other issues, landlords should run a tenant background check on applicants. It is important to do a quick background and credit check on all tenants. You don't want stolen merchandise found in your house or drugs being dealt out of your house! You do not want your investment property to become a crime scene! Protect yourself with a thorough background check.

This entry was posted on September 12, 2012 at 2:57 AM and has received 6932 views. There are currently 0 comments. Print this entry.

Rental property management can be one of the best investments in the current economy. Gold and stocks are too expensive to have much potential as investments. Bonds and CDs are safe but yield very low returns. Rental properties offer the opportunity to buy low, as well as a meaningful revenue stream. This gives investors the best of both worlds. In many local markets, housing prices are still falling and rental prices are rising. This combination of trends creates an opportunity for investors to buy houses and apartments and rent them out for a positive cash flow. The numbers work out perfectly. The tenant is paying the note and the holding costs such as insurance and taxes. The investor is turning a profit each month. This can be boosted further if the investor chooses to take a depreciation write-off on the house, thereby lowering the income tax bill at the end of the year.

Unfortunately, this scenario doesn't always play out in the real world. While most tenants pay their rent on time every month, there are some tenants who aren't so reliable. If a tenant fails to pay the rent, it creates a triple whammy for the landlord. The cash flow from rental income stops, but the investor still has to pay the taxes, insurance, and mortgage. To make matter worse, the landlord might have to take collective action or begin eviction proceedings. This adds legal fees to the financial problems. In the worst case scenario, the bad tenant retaliates against the landlord by intentionally causing as much damage as possible. That adds even more bills and wastes even more time as the house or apartment needs repairs before it can be rented again. A scenario like this can wipe out a few years of profits for that particular property.

To make the worst case scenario less likely to occur, landlords can require applicants to submit to a credit check. It's much easier to avoid a bad tenant than deal with one, and a tenant credit check is one way to minimize the risks. If a tenant has a history of not paying bills on time, this is a red flag that landlords should consider before renting the property. Past behavior is a good predictor of future behavior. This is even more important if the delinquent bills were rent, or worse, if there is a history of evictions. In these cases, property investors may want to protect themselves by not signing a rental contract with that applicant. Alternatively, they may allow the applicant to rent the property but take other measures to protect themselves. This might include a higher security deposit or a higher monthly rent.

A tenant credit check is relatively cheap and can be done for less than thirty dollars. This is a very small price to pay as an insurance policy against a deadbeat tenant, which can cause losses that run several thousands of dollars.

This entry was posted on September 12, 2012 at 2:49 AM and has received 5839 views. There are currently 0 comments. Print this entry.

Good investments are difficult to find right now. It's a little too late to jump into the stock market, which is unusually high considering the anemic job market. Likewise, gold has skyrocketed over the past few years. Buying high is always a bad idea because there's little upside. Bonds have such a low rate of return that they're not worthwhile. But there is one place where it's possible to cover all of the best investment practices--buying low, investing for the long term, and investing in assets that provide value and generate revenue. That sector is real estate - an area of investment that many people might not think is the best place to put their money. With the foreclosure rate still high, there are lots of cheap properties investors can buy with little risk. Because many markets have higher rental prices, it may even be possible to find houses that can be rented for a positive cash flow. The tenant pays the note, taxes, insurance and a little extra. The investor builds equity that can be cashed in several years down the road and may even want to take a depreciation write-off on the building.

If the local market conditions are right, this can be one of the most lucrative investment strategies. Unfortunately, there is one major pitfall. A bad tenant can destroy the investment plan and cost the landlord thousands of dollars on multiple fronts. The worst case scenario is a tenant who stubbornly occupies the property without paying rent, vandalizes it and uses legal tricks to delay the eviction process for as long as possible. This can be even worse if state and local laws offer little protection for the landlord. At the end of the day, bad tenants can cost a landlord thousands of dollars.

Tenant screening is one way to minimize this risk. The key is to keep bad tenants from ever occupying the property in the first place. Fortunately for property management investors, tenant background checks are available. Before entering into a rental contract, a landlord has the opportunity to find out if the potential tenant has a history of problematic behaviors such as not paying bills, causing excessive property damage, or being evicted. Other information is available as well such as a criminal background check, which can tell a landlord whether the applicant is a possible danger to other tenants or poses a risk of bringing criminal activity to the property.

A tenant background check can range from approximately twenty dollars to forty, depending on how extensive it is. Even if such checks are run on several applicants, it's still a worthwhile expense. That little bit of money now can save thousands of dollars in the future, as well as a long of aggravation, if it keeps a bad tenant from renting the property. Click here to order a background check now.

This entry was posted on September 12, 2012 at 2:44 AM and has received 7119 views. There are currently 0 comments. Print this entry.

One of the best investments you can make right now is real estate. Many people might not think of real estate as a good place to put their money because real estate (and specifically foreclosures) was a huge contributing factor in the recent recession. Foreclosures are still occurring at a high rate and in some parts of the country prices are still falling. This makes investing in real estate seem counter intuitive; however, it might be the right move, especially in markets with low selling prices and high rental prices. Low interest rates make bonds less than ideal, and the stock market is risky. Gold is currently priced too high to have much of an upside. Real estate is the way to go, as long as investors avoid get rich quick thinking.

Successful investing often means sticking with your investments for the long haul, rather than a quick flip. In the case of real estate, the best strategy is usually to buy cheap properties and rent them for a steady income. The real estate market collapse has provided many opportunities for investors to acquire cheap houses, and depending on the local market the rent can pay the mortgage and provide a profit. Investors might also consider depreciating the building to help with taxes.

Residential property can be lucrative, but a bad tenant can ruin your business model. A particularly bad tenant can leave a house or apartment in need of thousands of dollars in repairs. Even worse, some tenants refuse to pay the rent. This forces the landlord to go through an eviction process, incurring expensive legal fees. Depending on state and local laws, this can be a very time consuming process as a bad tenant may use every procedural trick possible to drag out the dispute. Meanwhile, the tenant is occupying the property rent free and you lose money.

The best way to avoid that scenario is tenant screening. As part of the rental application, a landlord can run a tenant background check. This may include a tenant credit check to make sure the applicant doesn't have a history of delinquency or default. It may also include a criminal background check and a public records search for evictions (which would obviously be a huge red flag). There are no federal fair housing issues with such a background check because doing so judges the applicant as an individual. People with criminal records, bad credit or a bad rental history are not covered by the Fair Housing Act.

A basic tenant background check report can be completed for fewer than twenty dollars, and a more extensive one can be run for less than forty. This is a small price to pay for security when compared to the thousands of dollars that can be lost on property damage, unpaid rent and legal fees that can come with a bad tenant. A tenant background check is one of the best ways for property managers to protect their investment.

This entry was posted on September 12, 2012 at 2:33 AM and has received 6567 views. There are currently 0 comments. Print this entry.