Signing a Lease with a Tenant
1) Rental Application
2) Credit Check
3) Signing the Lease
4) Security Deposit
Rental Application
When you have someone interested in renting your property, have them fill out a rental application. A rental application will provide the information you need to pull a credit report, verify past rental history, verify current employment, check references and anything else that might be helpful for you to make a decision on renting to this person.
Here is a sample rental application:
http://www.citicredit.net/applications/Free_Rental_Application1.pdf
Credit Check
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Freddie Mac, a quasi-government entity that finances mortgages, said it will begin renting out some foreclosed properties to their owners.
“Keeping foreclosed properties occupied and in better repair will support local property values and promote a faster recovery in the housing market,” said Freddie Mac Chief Executive David Moffett.
Fannie Mae, which announced similar plans earlier this month, said it has stopped about 20,000 foreclosure sales and halted 6,300 evictions of owners or renters this winter.
Under Freddie Mac’s new policy, tenants and former property owners need to demonstrate that they have enough income to pay the rental bill. Freddie Mac also said it would consider reinstating a mortgage for those borrowers who can qualify for a modified loan.
Washington-based Fannie Mae and Freddie Mac were taken over by the government in September after mounting mortgage losses put them in distress that was a prelude to the broader financial crisis that hit Wall Street last year.
Source: Freddie Mac to rent foreclosed properties
According to BusinessWeek, residential rents dropped in several major cities due to the decline in the demand for housing. People are losing money on their investments, cutting spending, and moving in with other family members in order to save cash. This is having an adverse affect on rental markets nationwide. Rental markets like New York City and the suburbs of New Jersey are drastically feeling the decline in demand for housing since the financial crisis exacerbated in 2008.
BusinessWeek.com worked with Axiometrics to come up with a list of 25 large metros where rent declines accelerated most at the end of 2008. In Salt Lake City, where the economy had been holding up better than most cities, effective rents (including landlord concessions) fell 2.3% in the fourth quarter compared with the previous quarter. By comparison, rents were climbing 3.3% in the fourth quarter of 2007. (more…)
From Realty Times, a new tenant was doing the landlord a favor by moving out an old refrigerator in order to make room for the new refrigerator. A friend of the landlord stopped by to help the new tenant move it. Upon moving the refrigerator, the new tenant lost his grip of the refrigerator and it landed on the friend’s foot. This resulted in a broken ankle, a trip to the hospital and surgery. The friend of the landlord sued the landlord for the medical costs. The court held out that there was an agency relationship between the landlord and tenant, which held the landlord responsible for the tenant’s action. The appellate court upheld the original verdict. Total medical costs were over $100,000.
So landlords, be careful what you ask your tenant to do because it just might just be worth it to do it yourself.
Source: Landlord May Be Liable for Tenant Who Does Work on the Premises by Bob Hunt
10) He or she is a Doctor or Professor that is living in the UK. (Good cover since Doctors and Professors are usually perceived to be honest and trustworthy individuals)
9) He or she offers to pay the whole years rent upfront. (How nice!)
8) He or she pays you by check and it is more than you agreed upon. (Hey, free money, right?)
7) He or she asks you to pay for furniture or shipping costs in a different state. (For some reason Tennessee is used for a lot of the scams)
6) He or she forgets what name they are using and starts switching it up in emails. (This happens more than you think) (more…)
In Rolla, Mo, a man identified as Dr. Gibert Kenny wanted to rent a property advertised by Floyd and Caroleen Ferrell of Realty Executives/Ferrell Associates. Dr. Kenny was out of country and wanted to pay the whole years rent upfront. They received the check for the entire years rent; however, the good Doctor wanted them to wire some of the money from the check via Western Union to pay for some furniture expenses in Tennessee.
Lets analyze this because we have all the key ingredients for the normal rental scam: fake check for upfront rent; wants money to be paid for furniture via Western Union; and the Doctor is out of country (probably somewhere in the UK).
If you have ever been a landlord, has a tenant EVER offered to pay the entire years rent upfront? (more…)
From Nashville, TN a woman was desperate to find a renter for her condo which she had bought as an investment a few years ago. She received an email from someone supposedly in the UK who was interested in renting her property. The would-be renter wanted to rent her condo, and he was nice enough to pay upfront…except, he wanted a portion of his check refunded back to him. WAVE THE RED FLAG!! (more…)
From Realtor.org:
Fannie Mae announced Tuesday that it would allow qualified renters of foreclosed properties owned by a government-controlled mortgage company to stay in their homes.
Under the National Real Estate Owned (REO) Rental Policy, renters of homes acquired by Fannie Mae will be offered a new monthly lease at market-rate rent or if they desire, financial aid to help them move.
Source: Renters Can Stay in Foreclosed Home
Ed Harmen thought he landed a great tenant for his rental property. The prospective renter was a doctor who offered to pay his security deposit and first and last months rent upfront. He sounds like a great tenant; however, this renter has one major downfall. He pays with fake checks since he is trying to steal your money. (more…)
From KOHD.com in Oregon, a woman received a check from a would-be renter. The person was out of state and the check was for more than what was originally agreed upon. The renter then requested to have the landlord send them back the difference. Here is a good quote:
But the check they sent is a fake, the money order you sent is real. Ed is out $3,600 and there isn’t much he can do. He’s reported it to the Oregon department of Justice, but they say there is little chance he’ll get his money back. (more…)
