In 2015, an estimated 2.7 million people were evicted in the US.
That’s a mind-boggling number, and with the upward trend in evictions, that’s likely to have grown in the two years since.
The largest factor driving this eviction trend is the rising cost of rent, while salaries and wages have simultaneously stagnated, and the data shows that the higher the portion of take home salary rent comprises, the more likely an eviction becomes.
While this is an alarming socio economic trend in general, and one that will certainly affect this country deeply in years to come, it’s also a major concern for landlords. After all, with more families opting to rent for one reason or another than ever before, this could happen to anyone.
Evictions Are Hard for Everyone
Let’s be honest: no-one wants to put anyone out on the street. Chances are, even if you have done so in the past, you didn’t take this drastic action lightly, and you probably lost some money in the process.
The fact is that evictions are bad for everyone. They put families in impossible situations, they cost landlords money, and they’re likely to leave your property empty and losing money for at least a little while.
If you’ve had to do this more than once, you might even have chosen to use a third-party property management company, simply so that you don’t have to deal with the fallout directly.
This is one situation where prevention is infinitely better than cure.
Tenant Screening Is Critical
The single most important thing you can do to avoid having to deal with evicting a tenant is to conduct thorough tenant screening. Here’s how this can help:
- The key issue here is affordability. Since families who pay larger chunks of their salaries to rent are more likely to default, leading to eviction, knowing what your prospective tenants earn is a very important.
- Another important issue you want to check when finding the right tenant is the length of time your prospective tenants have been in their jobs. Even if they’re earning great salaries, the ink may not be dry on their employment contracts, and it might not stay that way.
- A credit report or basic credit check will also tell you if your prospective tenant is in financial trouble in general. When there are lawyers and debt collectors knocking on the door, they might decide to use their rent money to buy some time.
- Finally, don’t forget criminal record checks. Even if people are completely above board today, they may have a criminal past, and when money is tight, sometimes people choose to do things that are not completely legal, especially if they have a history of criminal activity.
Proper screening might not be able to predict a tenant being fired or racking up unexpected medical bills, but it can help to show you what their track record and character is like. People tend to behave the way they have in the past, so if there are any red flags there, you should at least address them.
Ultimately, renting out your properties remains a risk, but you can take steps to limit those risks and help to protect your investment.