Episode 50: The ART of Checking References
Summary
Two of the most stressful times in a landlord's life: getting the right tenant IN and the wrong tenant OUT. Today's episode is all about getting the right tenant in! Packed with resources, today we review just a bit of the tenant screening process. I reveal the potential tenant screening checklist as well as HOW to have the conversation with a former landlord or character reference.
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*BONUS RESOURCES*
Full Episode Transcription
Welcome to my life as a landlord where we untangle all things housing and educate the curious. If you're
looking for some entertainment with some honest, awkward conversations, you've come to the right
show. I'm your host, Dr. Jennifer Salisbury. This is my life as a landlord. Welcome to it.
Hello there and welcome to my life as a landlord. Today is episode 50. Oh my goodness. I am absolutely
in disbelief that we have reached this episode mark, this is pretty cool. Today's topic is a landlord topic
and it is one of my favorites because I have developed the sixth sense of Landlord and this is all about the
art of checking references, the art of checking references. And as you progress in your landlord life,
you're going to get better and better at seeing through some of the crap. Uh huh. You're going to see this.
And I'm excited that this is all about screening your tenants. So screening your tenants is absolutely one
of the most important things you can do in your rental life. Mike and I often say that we would rather let
a unit go empty, then put the wrong tenant in. Now, I have found out the most two stressful times in my
life as a landlord. Getting the right tenant in and getting the wrong tenant out. Today's episode is all about
helping you get the right tenant in. Okay, so let's jump into this. I'm going to assume that you've got an ad
up for your rental somewhere. We'll talk about marketing for your rentals in a different episode. We're
going to just talk about checking references here. So you've got an ad up for your rental. Maybe you've
shown it. Maybe you've had an open house. Don't know. For us and for our rental fleet. We require a
preliminary application to ensure there is no issues with deal breakers for a potential tenant in the unit.
Uh, the preliminary application is very simple. We don't require IDs or pay stubs for an initial
application. Uh, so deal breakers that we're looking for in that preliminary application, things like
smoking tenants in a non-smoking unit, even if they're smoking outside, we don't permit it on certain
units. There's too many beings in the unit, right? They've got a family of six who want a one bedroom.
It's not going to work. We're not even going to show them the unit. Too many vehicles for the unit.
Maybe they own an auto wrecker. And they have two tow trucks and four vehicles that they're working
on. That's not going to work in most of our places. Also, non-approved animals in the unit, such as
snakes or aquariums with or without water. Notice that in all of those items. That there's no
discrimination. We are following the fair housing guideline on preliminary application deal breakers.
We're going to talk more about fair housing as we progress. But I want to let you know, as we go through
this preliminary application for us is required before we even show a unit. So that's what we do. But at
some point you're going to receive a preliminary application okay. So somebody's going to throw their
name in. They're going to say, hey, it's me and my husband or me and my wife, whatever. And you're
going to concurrently check references with them. Maybe they they say where their employer is, but they
don't provide a pay stub. They provide a, um, contact information for either their current or former
landlord. And we go from there. Right. And so we'll be showing a unit concurrently to make sure that the
unit works for them while we are going through our tenant checklist now. I am going to give you lots of
information on this today, so if you haven't done so already, I highly encourage you to take some notes.
Stop the podcast for now. Grab a notebook and paper or sorry, notebook and pen or something. Because
this is there's a lot of information on this one. And this is vitally important, especially if you are a newbie
landlord or pickle landlord. You want to do this right? If you are a landlord who is growing in your
business and you're not, either you're not a newbie or a pickle landlord, you might learn a nugget or two
in this. So this is cool. Okay, so what I do for, uh, preliminary application for a potential tenant, what we
do. And so I actually have a reference check sheet. This is for tracking when I receive a preliminary
application okay. This is for tracking. I put the applicant name on the top. And and if there's two
applicants they both have to qualify. Same thing with a cosigner. Let's say you have a young person
who's never rented before and one of their parents is going to be a cosigner. Same thing. The cosigner
must, must, must qualify for this as well. So we do a criminal check on them. We do a civil check on
them if we can, depending on where they are. If they provided an ID in their preliminary application,
great. If not, they'll have to provide it at the end before we finally qualify them. Same thing with a pay
stub or an income proof of some kind of income proof. Uh, maybe they've got a, um, maybe you've got
an A, someone who's retired and they, they are living off their either their savings or their investment
accounts. That's fine. But you've got to make sure that that's true. Previous landlord at least their previous
landlord, if not their last two landlords. You need some proof of housekeeping. You want to make sure
that there's not had any mischief. So this is just again, this is just the check sheet of what I'm doing. Once
we receive the preliminary application, then we talk about animals. Do they have pets or any other
animals? And I'm talking emotional support animals, service animals, anything if they've got an iguana,
something. Uh, but we've got to know what the animals are. Also, their vehicles make model insured
operating. We got to make sure we understand their vehicles that are involved. Do they have two
vehicles? Do they have five vehicles? I don't know, maybe they don't have any vehicles. We have tenants
that just take the bus. That's fine. Are they a smoker or a vapor that is becoming more in importance as
we're progressing into this world where you've got vaping going on and smoking, there's a lot of places
that are allowing marijuana, but if you don't have a marijuana license or you, uh, you've got a license to
grow marijuana, you need to know all that. As a landlord. You need to know that. And one of the last
things is a credit report. Credit check. Now you can do a credit check as a landlord. Or the tenant can
provide a credit score and report. But that is my checklist for now. We're going to go into even more so if
you wanted a difficult podcast about checking references, well guess what? This is exactly what you
signed up for. I'm going to rattle this off again, and then you will be able to see some of this on the
website. My life is a landlord.com. Okay. Now, uh, let's see, we're going to go through this criminal
check ID income, proof of income or pay stub, previous landlord, uh, or former landlord, at least a we
usually say three years of landlords. Uh, pets or animals. Vehicles. Are they a smoker or a vaper. Do
they have a license to grow marijuana or smoke marijuana and then their credit status? Okay, that's a lot
to track, but if a tenant wants your rental, that's that's required. That's how we do it. And we really we
really screen our tenants. There's a lot of people who agree and they go, wow, you really screen them? I
do screen them. I don't want any riffraff in my tenants at all. Okay. Now, the one that the tenant checklist,
the potential tenant checklist that I am going off of the I just read to you, it's it's in Microsoft Word that
you can print and track manually if you have 1 or 2 rentals that might work for you if you want to do it
remotely, if you want to do it on Google Drive and you have someone that is local to your rental or your
property manager, you can you can track it on an electronic means like Google Drive or Sync, or if
you've got a program, there's a couple different programs that you can use, and you can track all of your
application criteria through your program. But the whole idea here is that you want to go through each
one, and there may be items that I missed. If you are a seasoned landlord and I missed something, please
email me. Learn at my life as the landlord.com I. I enjoy when other landlords educate me. I think that's
actually really cool because that's the whole idea of this podcast is to educate one another. Okay. So that's
the first aspect of this. You've received a preliminary application. You've got your potential checklist
potential tenant checklist or I call it potential tenant reference check sheet. Whatever it's called doesn't
matter. But at some point you're going to get to the previous landlord reference check previous landlord
okay. This is one that most people have a real hard time doing. I don't have a hard time doing it because
I've been doing it for a long time. So I'm going to teach you what I know now. This is when you are
calling former landlords for a potential tenant. You're calling them, you're picking up the phone, dialing
the number. Okay. So let's let's go through this scenario. Let's go a couple different ways. First of all, let's
make sure that the phone number that that potential tenant provided works. Let's say it's cut off.
Voicemail is not set up. It doesn't even ring nothing. Go back to your potential tenant and say that phone
number is no good. Can you provide another contact information, another contact number? You know,
maybe they have something else. Maybe the former landlord is no longer living or is not able to answer
questions. That has happened. We've got a lot of folks that are, um, either passed away or are not able to
provide references anymore because of their, um, their health conditions. Right? So but I always go back
to the potential tenant and say, look, I need another reference of some kind. So that's if the number
doesn't work. Okay. So then let's go through here. You as a landlord are calling another landlord for a
reference. So it sounds like this. Hello there. My name is Jennifer and I've received a tenancy application
from applicant name. He or she has listed you as a previous landlord. Do you have a minute or two to
talk now? And then you pause. You pause because remember, this other landlord is receiving a call from
you out of the blue. The chances are, I'll say medium 5050 that the the tenant that gave this reference
may have called them and said, hey, can I use you as a reference? Maybe they didn't write, they may not
have. So it may be coming out of the blue. If you're catching this other landlord off guard, then they may
say, no, you know what? Can I call you back? Or can you call me back in 15 minutes if they say that. Set
a timer on your phone and call them back. Remember? Time is of the essence when you're talking about
qualifying these tenants, okay? You don't want to wait a week and then call them. No, you want to call
them as soon as you can. If they say yes, if you're asking if they have a minute or two to talk and they say
yes, here's the trick. You don't want to have them on the phone for half an hour. You want to get the
information from them and then let them be, because chances are what they're going to do is they're
going to answer your questions, hang up the phone, and then call the tenant, the potential tenant. Hey, so-
and-so just called me about your application. I hope you get it right. That's what's going to happen. If yes.
So first thing I say is, great. How long did they rent from you all? They rented for five years. They rented
for ten years. They rented for five months. Only one month. Whatever it is. And then I say, what exactly
did they rent from you? And they'll say, oh, they rented a room in my house, or they rented our cottage
back in the backyard, or they rented one of our apartments. Then I typically say, okay, how many
bedrooms did they rent? Typically I try to say how many bedrooms because that tells me how big and
what kind of responsibility was involved if it's a separate suite. So if they say it's a two bedroom cottage
or it was a one bedroom in my house with a shared bathroom and a shared kitchen, that's pretty intimate,
right? That's pretty intimate. Um, did the tenant have pets or animals? They'll say yes. No, tell. Did they
have any issues with the animals or the pets? No, we didn't have any issues. Or yes, the pet can get a little
grumpy or can bark a lot. They're going to tell you a little bit about this. One of my favorite questions is
about mischief. Has there. Was there any issues with mischief or behavior for this tenant? Meaning if
they're sharing a room in the house, did they do what they're supposed to do? Do they put their dishes
away? Did they act normal? Did they? You know, if they're renting a cottage, were they, you know,
playing video games and being loud and, and lights on at two in the morning that kind of thing. Was
there mischief for not behaving? Did they ever receive any warning letters? Right. If they start to say yes
for some of this. That is a big red flag. Okay. Were there any issues with late rent or utility payments? If
they start to say yes, they would pay usually rent late 2 or 3 days, but I would always get paid. 1s Okay.
In my program, my tenants pay on or before the first at midnight every time. This isn't a discussion. If
they're going to be late, then there's a late fee. But they also need to communicate with me. They also
need to communicate with me. And my tenants are fantastic at communicating. They'll say when
something happened. Unforeseen. Um, can I pay you a bit late on Friday? That is absolutely not the norm
for my crew. Not the norm at all. They are phenomenal and they're great communicators. So if that is
normal for this tenant to pay late on rent or utility, that could be a big red flag for you. It'd be a huge red
flag for me. Okay, then there's three other quick questions we ask did the tenant give proper notice to end
tenancy or did they just move out? Did they give proper notice, whatever that means in the area, whether
it's 30 days or two weeks or one full calendar month, whatever that means. Did they give proper notice to
the landlord to end tenancy? Will the tenant get their deposits back? Will they get them back? And
typically, if you end tenancy early for my units, they they forfeit the deposits. And so if I get a call I'll say
no. They forfeited their deposits. However I would have had no problem had they not ended it early due
to work or due to whatever. Um, I would have given their deposits back. No problem. We had no
problem with renting to them, for example. And then my favorite question if you only have one question
to ask them, ask them this. Would you rent to them again? 1s Remember, you're talking to the former
landlord. Would you rent to them again if they say yes? That is a big tell. If they delay at all. If they
delay it all, if they say okay. Yeah. Remember. For me, I always say there is two ways a landlord will
answer your questions. Your for these references, they'll answer. There's two versions. The first version
is the yes no. How long do they rent from you? Six months. They don't embellish at all. They're just
trying to get through your questions. And that's it. The other kind is a glowing reference where you just
have to say, oh my gosh, I rented to Christine and she was amazing and she would do this. And and
literally you don't even have to ask him any questions typically, because they will ask they will answer
them for you. Now, which one do you want? So you need to make sure you're getting Ahold of these
former reference former landlords as a reference. You need to talk to them. And if you can't get Ahold of
them, sometimes that is telling in itself. Okay, so that is how I look through the, um, the entire
conversation. And just to, you know, at the very end of this conversation that I'm having with this former
landlord, the last thing I will typically say is knowing that we are working on renting to this person. Is
there anything else I should know as their future landlord? Is there anything else I should know? 1s And
that's where you kind of get, hey, they're wonderful. They're friends of the family. You know, we've
known them for a long time and we kind of get the the coffee table conversation, which I really
appreciate when we get to that point. At this point, you've really kind of connected with this landlord.
You're starting to see the underbelly of what, you know, these potential tenants are all about. And you're
kind of figuring this out. Is this going to work? Is this not going to work? But again, this landlord
reference is only one part of the whole application. Okay. So up to this point you have received a
preliminary application. Just name basic information from your this potential tenant okay. You've got
your potential tenant checklist going. You've gone through some of these items and you've called their
former landlord reference or even character character reference something very similar. If they're going
to be um, let's say the landlord has passed away, but you've got a character reference from, um, from a
professor at their university. So if you've got a character reference checklist, it's something very similar.
And say, you know, if how did how long did you know them. So you can take the reference checklist for
a landlord and you can alter it for a character and say, you know, if you had a rental, would you rent to
them if you knew them? You know, give me an example of of you know, how you know them. How long
did you know them and what reference did you know them? Some kind of something that is not just on
paper. That's typically what I go with. Okay. So once you've done your checklists, you've gone through
the entire conversation. The applicant has seen the unit. Then it's time to complete the application.
Because remember they just gave you a preliminary application. Did they give you all of the information
that you've asked for? Um, do you still need IDs, pay stubs, bank statements, um, credit reports, credit
scores? Do you need to check their credit? In Canada, you've got to pay for a credit report, but you've got
to ask their consent to get it. But in the US, the potential tenant pays for it themselves. Now they can
provide you one. And I can say that I want a credit report with the score within the last 30 days, and so
they can go to a number of different websites and pull that for themselves. Or they can say, you know
what, just send me the link, I'll pay for it. And then I get a copy and so do they. They get a copy as well.
Okay. At some point you're going to need to say yes or you're going to say need to say no, because it
is very possible that you could have multiple potential tenants for the same unit all at once. In fact, in
today's day and age, with the housing crisis, it's probably likely that you're going to be having several
people qualifying all at the same time. All right. Because we're talking today about references, the art
of checking references. I decided I would throw in a. Bonus reference, a bonus resource for all of you
landlords out there. Every once in a while, I have gotten a request from a tenant from a departing tenant
who is asking for a reference letter from me. Okay, now, for those of you who have listened to my
podcasts in a bit, uh, I have there's a episode that I did about how to up your chances on getting an
impossible rental, and in that I talk about the package that you need to create as a potential tenant to
make it easy for your landlord to say yes. What I'm about to talk to you about is a tenant reference letter
for your departing tenants. The letter would go in that package. You're doing the work for that future
landlord. So while the majority of this podcast was all about checking references, I'm giving you a bonus
here on how do you provide a reference, a letter, not just the phone call, because there's very likely as a
landlord, you're going to get the phone call, you're going to get the other end of the phone call there.
People are calling and asking you about these tenants, but how do you provide a tenant reference letter
for departing tenants? Okay, I'm going to talk through this. And then the template. I'm making available
on the website. My life is a landlord. Com okay, so I've just done the template. It's in a PDF, take it and
make it your own. But basically on letterhead you've got your landlord company address, city, state or
province phone number. And if you've got a website, great the date regarding the tenant, the tenant name
and you say dear tenant, the security deposit or reference letter for whatever the address of the unit is.
And then something like, we appreciate your tenancy and are pleased that you chose our company to
meet your housing needs. We wish you all the best in your new home and would be pleased to hear from
you. If you need housing in our area again. Now think about that. The last question you ask a former
landlord is would you rent to them again in that one line? I have already answered that for the future
landlord. I'm welcoming this tenant back. So landlord reference information. Here's the information I go.
Now, this is sort of the nuts and bolts you need to know. These dates and these amounts deposits were
paid on whatever date they were paid. Move in date, whatever day you moved in move out date was data,
move out and your rent at the time of move out because you know you can have rent increases as you go,
the amount of deposits returned. And that's going to be however much it's returned. And then the last bit I
say is this account was in good standing at the time of Move out again. We hope you will consider us as
landlords again should your journey return to our area. If you have any questions about your tenancy,
please email me or phone me sincerely. And then I sign it with my name and my company. And the other
thing I say is in the event someone has ended the tenancy early, but they were a rock star tenant. They
were awesome. The only reason that you're they're not getting their deposits back is because they broke
their lease and they forfeit their deposits. I will put something in that and say, had your work not taken
you away from us early, we would have been had no problem returning your deposits. I would say that
straight in the letter and then I send that off. I've only provided maybe a handful of these over the years,
but it's such a powerful tool for the tenant moving forward. That it's an amazing resource. And so as a
landlord to another landlord, I want you to be prepared. When you have a rock star tenant that you're that
you're losing. Give them this as a parting gift. And that's going to be amazing. Okay. In today's podcast
we talked about a preliminary application, how to set up your potential tenant checklist, how to do a
former landlord reference checklist. And as an aside, how to do a character reference. Just a quick
character reference in the event the landlord is not available. Sometimes I do both. Then we talked about
a bonus resource of providing a tenant reference letter for departing tenants. But just as a an aside, I want
to let you know that all of the checklists are available. Lots of references on the website. My life is a
landlord comm and there's previews of these resources today. Here's your call to action. All my landlords
out there. Take a look at the resources that are on the website and make them your own. If you are a
seasoned landlord, there may be a nugget or two that I talked about today that you had no idea would be
helpful. Take it and make it your own, and increase your toolbox so that when something happens, you
are prepared and not freaking out. Okay, we don't want you to be stressed. We want you to find the right
tenants and have a very nice long tenancy. Okay, there's your call to action. Let me know your comments
and questions by emailing me at learn at my life as a landlord. Com remember comments and questions,
create the next podcasts and the next resources. And speaking of which, when you get to my life as a
landlord. Com you will see two free Blackout Bingo cards pop up, one for newbie landlords, one for
pickle landlords. Both are designed to help you educate yourself as you move forward in your landlord
journey. They are free so check it out. Next week's podcast topic is a tenant based topic and that's episode
number 51, where I have received an interactive email from the office of the Privacy Commissioner of
Canada. I can't wait to show you all about that. We'll see you there.
Thank you for joining us this week. To view the complete show notes
and all the links mentioned in today's episode, visit our website at www.mylifeasalandlord.com. If you're
looking for educational resources for getting into real estate investing, becoming a landlord, or even a
better tenant, then I have a page on my website to get you started looking for a solution to the pickle that
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Thank you again for joining me, Dr. Jennifer Salisbury in this episode of My Life as a Landlord. I'll see you next time.