Tips to Avoid Problem Tenants

A local newspaper has published an article recently about landlords need to vet their tenants and be thorough in the tenancy agreement. As a landlord myself, I couldn’t agree more. Many landlords that I know tend to skip the most crucial step when renting out their property. Unlike overseas, tenants are to be interviewed by letting agents/ landlord themselves prior to decide whether to rent the property to the prospect or not.

Having the right tenants in your property can truly make a huge difference in your ability to succeed in owning investment rental property. While problem tenants can definitely exhibit some warning signs, there are some problem tenants who are quite adept at getting past landlords. As a result, it is important to understand that you simply cannot always rely on your first impression of a prospective tenant in order to determine whether they will be responsible and reliable.

If you are landlord, it might be worthwhile to check out our 8 things before you rent out your property ebook.

There are some tips you can use; however, in order to avoid tenants which could prove to be difficult.

First, always have your prospective tenants complete a rental application or at least something in writing. A rental application is seldom practice here in Malaysia unless you have your property manage by letting agents. Let’s face the fact that most of us prefer to manage the property ourselves. Most would prefer to save up a month’s rental and some management fees. Nowadays, an initial engagement with prospective tenants are either through online, phone call or mobile messaging. Depending on the channel you use to advertise your vacancy. As we are not letting agents, do conduct an informal interview with the prospects. We normally ask these questions to know if the prospective tenants are suitable for us; or if you rent by rooms, you will need these questions to pre-screen if they will get along with your existing tenants:

Are you currently working or studying?

• Are you looking for a room or whole house?
• May I know your monthly budget?
• Are you planning to stay for long term or short term?
• Do you own a car?

To know whether the prospects are student or working is important to determine their source of income and whether they have the ability to keep up with their rental. When you ask a question, you will eventually be able to tell if the prospect is financially able by probing hard enough. For example, ask for the tenant where did he/she stay before and for how long. The longer the period of stay the better to show tenant ability to pay for rental.

When you ask whether the prospective tenants are looking for a room or whole house is depending on your rental strategy. This is normally to filter your prospects to suit your property profile. If you have more than one properties, then this question may be relevant to you.

Prospective tenants’ budget is important to determine if they are able to afford for the rental. If you are offering many rooms in your property, perhaps you should ask this question and offer smaller or bigger size room according to prospects’ budget. Master room would cost more as it normally comes with its toilet.

Asking whether the prospect is going to stay long term or short term is more towards your own planning. We all know that looking for new tenant is a tedious job. If you ask this question, you can plan further and know what to expect later.

Though asking Malaysian whether they have a car or not seems to be a ridiculous question to ask (thanks to our world class public transport!). But you need to know that you probably don’t have a football field size parking lot in front of your house! If there is insufficient parking space available at your property, do let the prospect know in advance so that both you as the landlord and the prospect as tenant can make an arrangement on the parking issue.

Always make sure that you obtain proof of identity. This includes seeing a photo identification card from any prospective tenants that you interview. Make a copy of the IC and be certain that you attach it along with tenancy agreement.

Again this is not normally practise in Malaysia, but having references are also essential. Just as if we are interviewing for a job. Although it is not a norm to ask for reference from previous landlords but this action could potentially save you from problem tenants. A genuine tenant should have no problem in providing such information. If the prospective tenant is reluctant to co-operate due to whatsoever reasons, then it’s your judgement call whether to proceed with their tenancy or not. Make sure that you obtain the name and contact number of the prospect’s previous landlord so you can follow-up. By checking with the landlord directly you have a better chance of determining if there were any problems.

Finally, make sure that you include information regarding a house rules with each tenants. The house rules should state what is expected of the tenant and have the prospective tenant sign and date the document along with the tenancy agreement. By making sure that these expectations are clearly outlined in the beginning, you can help to avoid a number of problems.