Good reference checking and credit checking are the key to whittling out the bad apples from the good ones.
Every Landlord and rental Property Manager should be conducting reference and credit checking as part of their application process.
You'll soon find out whom, lied to you in the rental application process.
Here at Chase Property Management we reference and credit check every application that comes through, this can be a timely process, but its imperative to take the time now rather than finding out latter down the road, that tenants are being chased by debt collectors; or that after 6 months they stopped paying the rent; or their garden and lawn care practices leave much to be desired.
It is best to have a sample of questions that you ask each reference, How long have they lived at their current address? Did they always pay the rent on time? Were there any issues with noise or damage to the property? (for example).
Family members are not references!!!!!!! If you feel that the tenants have given you a friend or a family member to act as a landlord, ask trick questions, it always pays to have a few well considered questions up your sleeve to catch out fraudsters.
Often we have tenants that have owned their home and haven't rented for years, so they have no current Property Manager or Landlord to do a reference check. If they have sold their home, ask the Real Estate agent for a reference, they have been in their home on numerous occasions, so they will be able to give you good incite on how the property was maintained. Employment references are also a good reference if no current/previous Property Manager or Landlords are available.
Credit Checks can show up all sorts of Credit history: bankruptcy; defaults on bills; and if you use Tenancy Information New Zealand, (TINZ website) TINZ also allow Landlord and Property Managers to load any 14 day breach notices, so you can see right from the outset if Tenants have had any notices lodged against them. You can also check the Ministry of Justice Fines, a great way to see if they have been to the Tenancy Tribunal. And if so, read the order that was made for or against them.
Reference and Credit Checking is almost as important as the Tenancy Agreement. If its not thorough then you don't really know who you have living in your investment rental property. I wouldn't want to take that risk, would you?
Chase Property Management is here to help, if you would like some more information on credit checking or what are the right questions to ask when reference checking, please feel free to contact us.