How to know if the tenant is going to cause you trouble

Are you worried about whether or not the new tenant you are planning to give your house to will cause problems in the future or will he behave and act like a saint? Let’s explore how you can find out.

Generally when you are renting out your property, the following are the concerns generally:

  1. Will he pay the rent on time?
  2. Will he maintain the property well?
  3. Will he vacate the property on time?
  4. Will he ever vacate the property?
  5. Will he cause problems to you and the current residents of the building? 

The primary safeguard is of course putting all the terms properly in the lease deed that cover all the points and safeguard you, in case things don’t work out and you have to go to court.

Landlords do different kinds of things to make sure they are safe. Some rent out only to foreigners since foreigners will always vacate when they go back, generally maintain homes very well (at least Europeans, Americans, Japanese) and are generally more civilised and behave well.

Some rent out only on a company lease. Companies have a good financial capacity, are not generally out there to do frauds etc., and are believed to have a better reputation. 

Some do not rent out to a few categories like to real estate agents, builders, policemen, lawyers, politicians, government officials, some specific businesses they feel are not good etc.

These above methods don’t always work. I have seen foreigners and even Multi National Companies and big Indian companies creating a lot of trouble. But the percentage is very small. And even with Indian Businessmen or lawyers the percentage of problems is very small. You need to be able to find out how good the tenant in front of you is. Foreigners or people operating in Multi National Companies are just PEOPLE. They can misbehave and act odd just like any businessman etc. can. 

As a landlord you must ensure that you have a proper agreement in place even if you are renting out to a god! In addition to that you can do the following things:

  1. Get information of the tenant and tenant’s company name if he has a company. Check online for any frauds or information regarding any financial problems in connection to his name or that company. If he is a fraud, his name will pop up somewhere for sure.
  2. Find out where he is living now and why he is vacating. 
  3. Find out any common connection and verify the information received. This can be done very easily by going to that person’s Facebook or LinkedIn profile and checking any common friends and giving them a call. You will be amazed that sometimes you will find out that your own cousin is his very close friend and takes 100% guarantee. And sometimes he warns you that this guy is a total fraud.
  4. In the case of companies (Private Limited or Limited), you can easily get a full financial report online for under Rs. 1000/-. Get that and verify that at least they have the money.
  5. If they are living in a rented accommodation right now, find out the details of the current landlord and give a call to find out how they were, if they made all payments on time, and if they caused any problem in vacating the property. This is not always liked by the tenants but in some cases, they will give you the name and number of their landlord immediately and may even offer you to speak to them to clarify anything you want.
  6. If you are doubtful about the financial situation of the person and are going to refuse to give to him, you can as the last thing before saying NO, ask for his financial statements to see if he has the money. You can clarify that you are uneasy about your property going into the hands of someone you don’t know very well and would need this to feel more comfortable. As covered in point 3, you can verify about the company online (Private Limited or Limited company, not a Proprietorship or Partnership).

You don’t need to do all the above steps as in most cases you will get satisfied (or find out he is a crook) in the first few steps. Frauds and trouble-makers are creatures of habit. If they are really bad news, they must have been bad earlier and you will easily find out. As mentioned before most businessmen and other professionals are not crooks and pay on time, vacate on time and do not cause trouble. I have personally rented out hundreds of properties and have never seen any of them not vacating. Delay in rent payment sometimes can happen and has happened, but never have they required to go to court really. But even then, the Rent Agreement (or Lease Deed, same thing) always must cover all points well for both the parties concerned. 

Hope the above tips helped.

Ashutosh Bhogra

Your Real Estate Agent and Advisor

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