Thursday, October 7, 2010
Most tenants are good tenants, especially the ones who go through our thorough tenant selection process. What we are constantly shocked to discover is how few prospective tenants have ever had a credit check carried out on them. The one thing which is impossible to tell from looking at a person is what they are like with their money. The best dressed can be the worst spenders. Past behaviour is a reliable predictor of future behaviour - it takes a lot for people to change their habits. So, if you are managing your own properties, or you have a property manager, make sure your prospective tenants have a credit check carried out before you accept them as tenants.
Once they are in your property, it is too late – you cannot legally carry out one once they are a tenant, and you can’t kick them out just because you didn’t do your due diligence on them. If it is to confirm what you already suspect because the rent doesn’t come in regularly, well, why bother? You should perform a credit check on every prospective tenant who consents and is likely to be offered a property. You don’t need to check every applicant.
You can legally discriminate on a person’s ability to pay rent. If someone has a history of defaulting on loans or credit, it is a fair bet they won’t place a priority on paying you rent. Don’t take them. If your property manager does not routinely carry out credit checks on prospective tenants, don’t keep them on.
We have saved our clients expense and heartache by turning down tenants with undesirable credit histories. Want to know more? Give us a call and we will tell you all about it.