Many of our clients that we “inherit” are because the same realtor who sold them the property starts to manage that property and does not have any experience or doesn’t know the different processes that exist and must be followed when renting a property. They don’t know what precautions must be taken before handing over the keys to a new tenant.
These management companies, or just realtors, have not done their job well when they had to and did not ask tenants for income verification. Income confirmation is one of the most important parts when deciding if the tenant is truly qualified to be able to pay their monthly rent.
Tenants generally do not commit to a contract, a very important legal document, with the intention of not paying their rent and living free for the next few months. That lie is short lived. There are relatively quick legal procedures to remove from the property those lying tenants. In addition, this trick of wanting to deceive the owner or the property management company, lasts very little, because once you enter an eviction process, that leaves a dark spot in the tenant’s record and poorly qualified for their next rent, or attempt to buy a home or buy a car. The tenant qualification process is based on their credit record and if it is ruined by lack of payments, it will be very difficult for them to rent a quality property or live in well qualified neighborhood.
When you are about to hire a property management company, check and confirm how they do the tenant income verification process. The key questions to ask them are:
• Do they ask for copies of the latest pay stubs?
• Do you call the company on the pay stub to verify it?
• Do you call the previous owner to verify that they have a good record of paying their rent?
• Which companies they use for the credit record verification, if they had any eviction in Florida or in another state?
• Do they have criminal records in Florida or in another state?
• Is the income to debt ratio compatible with the rent they are going to pay?
• The income they receive should be 3 times the amount of the monthly rent.
• Have they maintained a stable work history in recent years?
When you have tenants with non-typical income for example retirees, students and those without a typical salaried job, you may have to find other ways to verify their income.
There are times when we find good tenants but they do not comply, for example, with the rule of receiving 3 times the rental income. We have ways to help the Landlord not to lose a good tenant. Among the options that we use is to ask the tenant to give an extra month of secutity deposit as guarantee. Another way is to ask them to get a trustworthy and responsible person who is also in the rental agreement and is responsible for paying the monthly rent. This is typical for college students who have their parents as signatories on the contract and guarantee rent payment.
If you have questions, need help with managing your tenants, or don’t want to take tenant calls for everything that happens on their property, we can help.
Here are our contact details:
GLOBAL INVESTMENT & MANAGEMENT GROUP LL
1390 Brickell Ave, Ste 104, Miami, FL 33131
Tel: 305-951-0821 Email: management@globalpropertymanagment.com
Happy tenants, happy owners.