Will Nesbitt
I am by nature a trusting person. This business has taught me to verify every statement that a tenant makes. Scammers and bad tenants can sometimes give every appearance of being trustworthy and upright people. We never cut corners on background checks. ~ Will Nesbitt

The key to good property management is good tenants. Nesbitt Realty rarely has problems with tenants that we place. We often inherit problems from landlords who selected their own tenants or from landlords who have brought us tenants from other property managers. The key to finding a good tenant is starting with an understanding the criteria that describes the ideal tenant and proceeds to a method for determining knowing if an applicant approaches that ideal.

What we look for in tenants

Nesbitt Realty prefers to deal with tenants that:

  1. A good tenant pays the rent on time every time. This means paying on or before the first, rather than at 5 pm on the 5th.
  2. A good tenant is honest. A good tenant does not sneak in a co-tenant or pet.
  3. A good tenant is fastidious or at the very least reasonably clean. A good tenant does not bring pests like rodents and bugs.
  4. A good tenant does not break systems or damage the property.
  5. A good tenant is courteous and easy to work with. A good tenant understands the difference between a property manager and a hotel concierge.
  6. A good tenant doesn’t disturb neighbors.
  7. A good tenant complains at appropriate times. Tenants that don’t report maintenance issues cost landlords money and cause head-aches for property managers.

    Julie Nesbitt
    I like tenants that pay on time. Late paying tenants cause extra work and unnecessary stress for landlords and property managers. ~ Julie Nesbitt
  8. A good tenant doesn’t complain when it’s not appropriate. This means that a good tenant doesn’t ask to replace or upgrade functioning systems. A good tenant doesn’t expect more than the lease provides. A good tenant doesn’t complain that an appliance doesn’t work when the tenant doesn’t know how to operate the appliance.
  9. A good tenant does not smoke in the rental.
  10. A good tenant is looking for a rental term that is as long as the landlord want to rent the property.

So this is what we’re looking for in a tenant, but how do we find renters who measure up to this ideal. Experience has taught us that bad tenants can appear as polite, nicely-dress, well educated people with good jobs. Under the wrong circumstances these same people can make a property manager and landlord’s life a living hell.

Fair Housing Laws and our conscience dictates that we do not judge people based upon appearance.  We do however just people based upon their track records and their actions. If a applicant is rude to us at the outset, they will probably be rude as tenants. If a tenant is applicant is dishonest, we can expect them to be dishonest as tenants.  If an applicant has trouble scrounging up money for background fees and the first month of rent, we can expect that same person will have troubles while they are in the rental.

But even if every appearance initially is good we still vet every tenant with a full background check. Every tenant and occupant must submit a government issue photo identification. From there, as property managers we start our vetting process.

  1. Credit history check
  2. Criminal history check
  3. Income verification
  4. Check with past landlords
  5. Check for internal consistency

Credit History

Good great is a good indicator, but is no guarantee of a good tenant. Good credit history indicates that someone pays bills on time and knows how to manage their finances. Renters usually have worse credit than homeowners / landlords.  Bad credit is not an absolute disqualifier. There are perfectly valid reasons why some people have bad credit and some of those people with bad credit can be outstanding tenants.

A credit history check is not the beginning or end but it is a good place to start to get a picture of whom you’re dealing with.

Criminal History

No criminal history is another positive indicator. There are plenty of bad tenants who have no criminal history and there are some outstanding tenants who have criminal histories.  The criminal history is another important facet to understanding whom we are dealing with.

Income Verification

Landlords and others who are not in property management may be shocked to learn how many people lie about their incomes on rental applications. Not only do some applicants lie about how much they make, they lie about about where they work! This has taught us to verify income for each and every applicant.

After we verify the income amount and source we compare that income to the monthly rent to make sure that the tenant can afford the place.  We use industry standard practices to calculate ratios to determine if the applicant can afford existing debt obligations and still have plenty of income to cover the monthly rent.

Check with past landlords

This is usually the slowest part of the process because former landlords are not always quick to respond. Part of the process of checking with past landlords is verifying that the phone number provided is actually the landlord’s phone. Then we need to verify that the person who claims to be the landlord actually owns the property that the applicant claimed to have rented. Once we’ve done all this, we talk to the landlord and ask them a series of questions about the applicant. Landlords can be very informative, especially in off-the-record conversations.  This is an important window into understanding what sort of applicant we are dealing with.

Check for Internal Consistency

Once we’ve assembled the picture the applicant we now take a look to make sure the story makes sense.  If it doesn’t make sense, it isn’t true.  There are many examples of this we’ve seen during our years as property managers but here’s one example.

A 54 year-old female applies to rent a property. She intends to let her 25 year old daughter live with her. However the mother has a large home in Mclean. She owns that home jointly with her husband whom she is not divorcing or separating from. The story doesn’t make sense. The mother has no intention of moving in, she is trying to cover for her daughter’s bad credit / lack of income or whatever.  It’s even possible that she is participating in the scheme because she wants us to have the tenant from hell, rather than have the daughter move in with her and her husband in Mclean.

Our recommendation

After the background check is complete we make a recommendation to the landlord based upon our experience as property managers and the information that we have verified. Ultimately the landlord decides if the risk is worth taking, but they make that decision based upon facts and expert advice.