At first glance, being a landlord has many perks – on top of being able to own an appreciating asset, you get to pocket a decent side income every month plus, you have the option of moving back into the property when a tenant’s lease has expired.
But the truth is, being a landlord is a far cry from having a regular side hustle, and some may even say it’s a second full-time job as once you manage to rent out your property, you have to oversee it regularly to ensure your tenant isn’t bending the rules and causing trouble.
The last thing you want is to realise that you have a tenant from hell living under your roof, so here are 7 tenant red flags to look out for to ensure that your home doesn’t end up in the wrong hands.
1. Tenants who have an unstable employment and income records
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While landlords may tolerate late payments that occur once in a while, it can be annoying when every month’s payments are delayed.
That’s precisely why it’s standard bread and butter for a prospective tenant to give their details to a landlord, particularly those regarding job history, proof of income and rental history. It also goes without saying that tenants with unstable employment and income have the highest probability of not paying their rent on time.
From their income slips, landlords should be able to gauge if a tenant can afford rent, and as a ballpark figure, rent should not cost more than 40% of a tenant’s monthly income. You should also ensure that this information is verified, such as by making sure that the income slips given to you are authentic bank statements just in case they’re forged.
That said, it doesn’t necessarily mean that unemployed tenants are unsuitable, as they could have a good pool of savings to be able to afford rent or are freelancers with a constant flow of gigs.
This means that although proof of employment or income is a good way to figure out whether or not the prospective tenant can afford rent, other factors should also be taken into consideration.
2. Tenant’s residential status can’t be verified
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To rent out your place to a tenant, you need to know and verify their residential status to see whether or not they are legally allowed to rent.
Although this might sound like a no-brainer, this is especially important when you have foreign tenants, as some could do sus things in your property and leave the country before you catch them.
For foreign tenants, you can check out which pass they are holding onto, and this could be an Immigration Pass, such as a Student’s Pass or Long-Term Pass, or a Work Pass, such as an S-Pass, E-Pass or Work Permit.
You can then verify the pass given to you through ICA, or MOM, if it’s a work pass, through their respective portals and also double-check with their original passport photocopies.
3. When they have a poor credit score
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For a more comprehensive way of judging a tenant’s ability to afford rent, a credit check through the Credit Bureau portal would be helpful for you to determine if the tenant is financially sound. If they refuse to show you their credit score, it could indicate they are hiding something from you.
As you can’t check their credit score on their behalf, you can get them to provide you with the details of their credit report. As a credit report costs S$8.00, with prevailing GST, you can offer to reimburse them for the required cost.
A CBS Credit Score is a four-digit number that ranges between 1,000 and 2,000. If the individual’s score is nearer to 2,000, they have a low risk of defaulting on payments, while if the credit score is closer to 1,000, it indicates a higher risk of defaulting on a payment.
With the report, you can find the breakdown of details like your tenant’s debts and spending habits. However, it should be noted that certain groups of people, such as new foreigners and students, might not have a credit score just yet.
4. Tenant’s background is problematic or doesn’t fit you
Even if a tenant is legally allowed to rent and can afford to do so, that doesn’t automatically make them a right fit; lifestyle clashes do occur between tenant and landlord, and it’s definitely best to sieve them out from the get-go.
While a small handful could have criminal convictions that would make renting to them a big no-no, others could have lifestyle habits that aren’t wrong per se but simply don’t fit you.
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Besides getting to know their lifestyle better through conversations, you can also do a quick social media scan to check what type of person they are such as if they are pet lovers or if they love to host parties which could clash with the type of person you are looking for.
5. When they are rushing to move into the unit
While, as landlords, you may love to score a tenant as quickly as possible without much effort, having one who wishes to move in too quickly isn’t a good thing.
When renting a property, taking as much time as necessary to ensure that you make the right decisions is important both as a landlord and as a tenant.
Typically, tenants should search for a unit around 2 to 3 months before their lease ends, so they need not rush through the process. However, a tenant who wishes to move in ASAP could indicate they lacked the initiative to plan, which could signify future disputes.
Apart from indicating upheaval, it could also show a lack of thought and planning or something even more severe.
Of course, they could have legitimate and urgent reasons to relocate, so you shouldn’t disqualify them based on this one red flag alone, but it is a factor to consider when looking for a tenant.
6. Tenant has a record of breaking leases
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If you notice a tenant has a record of breaking leases, as seen on their rental history, you should hear a bell ring in your head.
While they could have good reasons for breaking their lease in the past, you wouldn’t want a tenant with a history of leaving abruptly. Still, it’s always good to have an honest conversation with them regarding their past leases so you can find out the context and perhaps the reasonings behind why they did so.
7. Tenant gets too close & personal to you
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Now, this could be the real dealbreaker. Granted that it’s good to have friendly relations with your tenant, having them be too close to the point they trauma dump on you is highly unprofessional.
Plus, they will likely use their personal drama to guilt trip you into letting them break agreements in their lease or to delay paying rent, possibly even to the point where the money will never even come to you. Well, we’re saying no to toxic partnerships.
7 red flags to look out for when looking for tenants
If you’re not living in a house under your name, having a good tenant is key, as renting a property is a significant commitment. So it’s crucial to take the time to find the right tenant that fits your needs.
That is why it is crucial to look out for certain red flags in tenants when screening them. Once you’ve noted these tenant red flags, you’ll have a simpler time sieving out the right tenant for your home.
For more renting tips:
- Tips to renting alone
- Moving from a flat to a bungalow overseas
- HDB Parenthood Provisional Housing Scheme
Cover image adapted from: TheSmartLocal, Unsplash
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