If you have an investment property and you want to find a tenant, besides running a credit check and verifying financial stability, you always want to get a reference from the present landlord, right? Well, not always.
When a tenant is a problem, most landlords will write whatever it takes to get rid of them, so you could get a glowing letter of recommendation that will not be at all honest. The best thing is to get a letter from a previous landlord (if one exists) since they have nothing to gain by being honest; the tenant is already gone so they don’t have to make up stories to make them move out.
It is typical to have a lease application where you ask the prospective tenant to disclose certain facts and it is a good idea to review the booklet Truth in Renting (in NJ).
Here are some of the basic questions you want answered by the prospective tenant. At Towne Realty Group we have a standard lease application but we also know the right questions to ask.
1. Current residence (years there)
2. Previous residence (years there)
3. Employment verification (years there)
(If employed for less than a year, find out where else they worked and how long at each job. Plan to call and VERIFY this information. It may not be true.)
4. Get the social security number to verify accuracy and to report any interest once you deposit the security deposit into escrow. (Most banks are requiring a 700 credit score to lend money on a mortgage, so you want to be in this range to make sure the rental candidate has a good financial track record)
5. Get the names and ages of children, family members, nannys, who will be living with the renter(s).
6. Pets if any ((names, ages and breeds. You may find other animals moving in and out if you don’t limit which pets are allowed. Did you know it is illegal to get a pet security? Nothing more than 1.5 months of security is permitted on residential leases in NJ – but is is not illegal to ask for more rent per month (to accept a pet — maybe $50 to $100 more a month and that is not refundable.)
7. Any recent (within 5 years) foreclosures, arrests or a bankruptcy.
8. Make & model of all cars owned or leased, being parked on the premises and copies of insurancepolicy.
– and last but not least, as a Realtor friend shared with me
9)Emergency contact info: name, address, phone and email of someone who can be contacted if you cannot reach the tenant.
There are many questions that a Realtor or a landlord might ask, but you want to make sure you get the’ right’ answers before turning over the keys to your property.
First question: ask to speak with the current landlord or property manager. A letter of reference is not enough and could be forged or written to get rid of a bad tenant.
Don’t ask: ‘did they pay their rent on time?” It’s too easy for the answer to just be yes.
Instead ask: ‘How many times did you have to request a late fee for rent checks? or ‘How many returned checks did you recieve from this tenant?’ ‘What is your late fee in this case?’ These questions force the landlord or property manager to come up with more than yes – no answers and could give you clues to how things went during the rental period.
Here is another leading question: ‘Will you be able to return the entire 1.5 months of security deposit when the tenant vacates?’ This tells you if there is any damage or if the tenant gave the full amount of security. ‘Did the tenant use any portion of the security for their rent?’ Many tenants refuse to pay rent at the end of the lease and instead expect the landlord to utilize the security. If there are any damages at the end of the lease, the security deposit is no longer available to make repairs.
Depending on the answers, the tone of voice, any hesitation, you will be able to ask more like ‘What exactly happened that required repairs?’
Another good question is: ‘Was the tenant cooperative about showing the space to new prospects?’
When your tenant is about to leave, you want to make sure that they will not inhibit new tenants from looking or you could have a vacant property in between tenants and that will cost you money. Ask specifically: ‘At what times were showings permitted for new tenants to see the house/apartment?’ This will give you a clue to what to expect when your lease it up and the ease of finding/showing new tenants the space.
Also ask: ‘Did you have many repairmen during the course of the lease?’
Sometimes tenants are particularly hard on property and it is good to know what if anything was broken.
There is no guarantee that any of these questions will be answered honestly, but it is important to also verify that the length of time the tenant says they lived in the place, matches up to what the landlord discloses. It is good to make sure you are getting straight answers.
It is always to your advantage to hire an attorney for advice and make sure your lease protects you. Landlord tenant relationships can be tricky and the law protects the rights of tenants, so if yours does not pay rent, it will cost you. Make certain that your lease states that in the event of eviction or legal proceedings, the tenant pays.
Remember in NJ – a lead paint disclosure is still required and you must also comply with your townships Smoke Detector & Carbon Monoxide Detector Certification process so you have protection in the event of an accident.
At Towne Realty Group in Short Hills, NJ we handle many rentals for both tenants and landlords. Many of our listings are both for sale and for rent, and the owner/landlord will accept whatever comes first. Here is a link to see a few of our rentals today: http://www.trghome.com/Listings.asp
For more details email: Info@trghome.com