Many landlords refuse to hire a property manager because they don’t want to pay the management fees. But take a look at this article: Fremont Rental Scam. The minimal fees charged by a property manager could have saved these landlords tens of thousands of dollars. No tenant screening process is full proof and a property manager’s policies and procedures can’t prevent all potential losses. But as a property manager, here are some things Park One Properties would have done differently to prevent these landlords from being ripped off:
How we can help
First, rarely will we accept a pre-printed credit report from a prospective tenant. It is too easy nowadays for scammers to produce a fake report. We typically require any applicant for a rental property to allow us to pull a credit report ourselves. This helps to assure it is an accurate and current report. The report includes all previously known addresses of the applicant and a search of court records for any prior evictions.
Second, we require each prospective tenant to provide a copy of their id. The name on the id must match the name on the credit report as well as all the other documentation we require from the applicant such as pay stubs, income statements, etc. The address on the id must match one of the addresses provided on the previous address report.
“It is too easy nowadays for scammers to produce a fake report.”
Third (and this is a big one) we NEVER hand over keys to a tenant until we have received the first month’s rent and the security deposit in “good funds”. We typically receive this in the form of a cashier’s check, but will also accept a money order or wire transfer. We are sometimes willing to accept a personal check, but only if there is at least 2 weeks between the time the funds are provided and the time the tenant will receive the keys. This allows us ample time to deposit and clear the check. BTW, we also require the tenant to provide proof that they have obtained renter’s insurance before giving them keys.
Fourth, we do not accept “promises to pay” that allow tenants to string out late rental payments. We are very proactive about rent collection and take quick action by issuing a “Notice to Pay Rent or Quit” as soon as legally allowed. This notice is the legal first step to a forcible eviction and serves as a loud “shot across the bow” by letting the tenant know we are serious about collecting the rent and willing to evict them if necessary.
Knowledge is power
Finally, we are very knowledgeable of the legal eviction process (aka Unlawful Detainer process) and can move through the process very quickly. Many landlords lose precious time just trying to figure out the process. After months of trying they are sometimes forced to start over because their Notice to Pay or Quit, Lease, or other relevant documentation was not prepared correctly or not served on the tenant correctly. When required to evict a tenant for non payment of rent, we can typically have it completed within 30 to 45 days. We once successfully evicted a tenant for non payment of rent in 21 days.
As property managers, we can’t guarantee that we can prevent any and all losses to a landlord. But because of our established policies and procedures, experience, and knowledge of the legal system, we can guarantee that a landlord’s chances of suffering a loss are greatly diminished by hiring us. No one is crazy about paying fees. But the minimal fees charged by a property manager are peanuts compared to what a landlord could lose because of a bad or fraudulent tenant.