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CNBC reported on October 2 that 34 million people may be at risk of eviction in October. That’s 33 percent of the 103 million-plus renters in the US. But here’s a figure that is more telling. The National Multi Housing Council (NMHC) reports that 86.8 percent of renters who live in properties managed by professional managers had paid their rent by October 13. Professionally managed properties account for only about 22.9 percent of rental properties. But the vast majority of their tenants have paid their rent. Most renters, 77.1 percent, live in properties managed by the rental owners of the properties, landlords reports the Census Bureau. A far greater percentage of them are in danger of eviction.

Why the disparity in people behind in rent between the two types of managed housing? Without question, both kinds of properties have suffered from their tenants losing their jobs because of the pandemic. The difference is that professionally managed properties are sticklers for screening, They rent to people who believe that paying rent comes first no matter what. Before professional managers even think of renting to an applicant, they check credit, rental history, references, and verify income. That eliminates marginal applicants instantly and sends them to private landlords.

Private landlords may not be so diligent about applicant screening or might even believe there’s no point in screening since the “applicants just lie on their rental applications, anyway.” It makes you shake your head in disbelief. Yes, they do lie on their rental applications, but they are easy to catch in their lies. It’s just that many small landlords may not know how to go about screening and catching applicants.

At least one website even suggests that applicants with spotty rental history don’t even bother with professionally managed properties since “large property management companies typically require a credit check on all applications. These property managers will most likely turn you down if you have bad credit,” reports thebalance.com.

“Instead,” they suggest, “aim for properties owned by individual landlords, who often don’t check credit or who may be more willing to take a risk on a tenant who doesn’t have the best credit history but has good rental history and solid income.” Is it any wonder that the vast majority of tenants who can’t or won’t pay their rent are living in properties managed by landlords?

The only two times a landlord gets into trouble are when he feels sorry for someone or is in a hurry. Marginal tenants move a lot and so are practiced at the art of deception. The vast majority of landlords are nice people and want to give people the benefit of the doubt, so they may believe the stories applicants tell them.

Oh, they’re good. Professional bad tenants, you know, the ones who only pay rent when they are facing eviction (and maybe not even then but sneak out in the middle of the night), and who are bad neighbors, count on landlords not being as diligent as a professional property managers and have an entire bag of tricks to get the keys to a rental property. You think they must hold nightly training sessions on Zoom to learn all the latest shady tricks and techniques for fooling landlords.

They describe in detail the black cloud that follows them around everywhere they go, dooming them to bad luck. They have a knack for going to work for companies that are about to lay people off and renting from landlords who insist on prompt rent payments and taking good care of their homes and then evict if they don’t pay the rent or trash the place. “We said we’d fix all that stuff we broke!” they cry in anguish.

And their story is creative. They may use the same one on every landlord they rent from or tweak it a little for different people. But it’s always a “poor me” story. And the landlord feels sorry for them and actually lets them move into his or her rental that day!!

Another trick takes advantage of a landlord whose mortgage payment is due and doesn’t have a rent-paying tenant. He’s is in a hurry. These folks have a wad of cash and will pay the landlord three months’ rent right then.

Here is the difference in response between a professional manager and a private landlord who wants to give “people a chance” or is in a hurry. The professional manager will say, “that’s nice, but we need to check everything on your rental application to see if you meet our rental standards.” That’s what marginal or actual bad tenants don’t want to hear. They head for the nearest private landlord to try their story on a more sympathetic ear.

Rental standards provide one of the keys to successful landlording. Too many landlords rent on “gut feeling.” Their magical power, they believe, allows them to decide who will be a good tenant and who will not. Written out rental standards eliminate gut feeling and put managing rental property on the business basis it needs to be.

Rental standards show professionalism. Even seeing rental standards can send a marginal tenant to another property and landlord. And screening properly eliminates the ones who will try to slither through. Careful screening, what all the rental management companies do, eliminates the unworthy renters.

That means doubt everything until you have proof. Check credit, call references and previous landlords (and verify they are real and not just friends masquerading as references), and verify employment or source of income. You decide what’s acceptable, not the applicant. You must take charge of your rental properties if you are to make a decent profit and pay the bills.

With careful and diligent applicant screening, you can have the same results as the professionally managed rental properties and get the rent on time.

By Robert L. Cain

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