Who CARES About Getting a Good Tenant?

 

“…what we do in life… echoes in eternity.”

(Maximus (Russell Crowe) in Gladiator)

It’s been an unsettling time to be in the rental home game for the past year and a half. 

 

Many people (including tenants) lost their jobs or had their incomes affected negatively.  This made many tenants late on rent and on the verge of eviction.  To stop this, politicians signed the CARES Act (which included an eviction moratorium) which has made it hard (and in some cases, illegal) to evict non-paying tenants.  Without rent, landlords are forced to make payments themselves which has put them in a cash-crunch.  It’s been a tough season for all involved.

 

No one likes evictions.  Tenants, landlords, politicians, property managers- it’s failure on some level.  But in the world we live in, someone has to pay and be paid for services to continue; we don’t live in utopia.  So as eviction court cases pile up at the court house (evictions can be filed, just not judged and acted upon) and rent balances swell, what can be done at this point?

 

The CARES Act also has provided states with billions of dollars in rental assistance.  This means that tenants can apply and get free rent and utility money.  We’ve had tenants get up to 6 months in funds that was sent to us directly to cover past due and future rents.  All the tenants needed to do was to call 211 in the Charlotte-area to be directed to the best resource based on their situation.  It seems relatively simple, though with most massive programs, there were hiccups.  But we’ve seen it work.

 

However, we also have tenants who choose not to avail themselves of these programs for whatever reason.  They might not trust the government, are confused by the information asked for, or just don’t want to do the legwork needed to secure the assistance.  The situation can seem hopeless and they may feel they might as well ride the process out as the media and politicians give messages that evictions will be blocked indefinitely.  They might as well save (or spend) their money now and worry about their housing situation later when they are forced to.

 

Landlords do not want to be in a position hoping that third parties will “do the right thing” someday, while they are left holding things together on the back end.

 

Going forward, that has placed a greater premium on tenant screening.  The bar keeps moving as we’ve never experienced a pandemic before which had whole industries in the economy largely shut down.  This has affected credit scores, bad debt, and recorded evictions from normally reliable people.  So what we see on paper (through credit, criminal, income, and landlord screenings) might not be indicative of future performance.

 

The important thing to remember is that whoever is placed into a rental house now is with you for the foreseeable future.  When the eviction moratorium is lifted, there is going to be a huge backlog of cases.  Getting an eviction tried and acted upon may take a really long time.  Securing the right tenants takes on an added degree of importance because they will be with you for a while.

I’d proceed with placing new tenants very methodically.  It might not be a good time to cut corners (“Half the security deposit?  Sure, we’ll take that.”) or roll the dice on ambiguous applications for a quick tenant placement.  A bad decision can last a long time and be very costly in this environment.

 

It is imperative to really CARE about getting a good tenant presently.  Get all the information, take your time, and make an educated determination.  It’s more important now than ever- tenant decisions made today can reverberate for a long time.

 

Happy Landlording!