A landlord reference letter is one way to avoid the nightmare of a bad tenant. Delinquent tenants in your rental property usually mean late rent payments, extra work, and a dirty rental unit. Additionally, if bad tenants disrupt your other tenants, you could lose your reputation as an excellent landlord. During the rental application process, savvy landlords always request rental reference letters from previous landlords.
What is a Landlord Reference Letter?
A landlord reference letter gives you an insight into a prospective tenant’s character. The rental reference should let you know if the tenant paid rent on time, took care of the property, and was considerate of neighbors. Additionally, the letter of reference should state the length of stay.
Today, it’s common to send landlord references by email. But you can ask to receive landlord references in a written document or by phone. However, it’s preferable to keep a hard copy in the applicant’s file. Regardless of how you receive a landlord reference, there are ways to go about asking for one.
How to Request a Landlord Reference Letter
Your rental application should have a ‘previous landlord details’ section for the potential tenants to complete. This should include the landlord’s full name, address and contact number, and email address. If the application doesn’t have this space, you will need to ask.
It is best to get references from three previous landlords. Even if they are from some time ago, two or three rental reference letters are ideal. It’s essential to get more than one to cross-reference information and check that the applicant is being honest.
Landlord reference letters must be a part of the rental application. It’s not worth giving someone the benefit of the doubt and signing a lease only to receive a negative landlord reference when it’s too late. Contact the previous landlords as soon as possible to prevent delays.
Information a Landlord Reference Letter Should Contain
A rental reference letter should have enough information to help you make an informed decision. The details from previous landlords and other tenant screening checks should give you a general idea of the person. You can then have peace of mind about signing a lease agreement with the new tenant.
Here are some things that should be included in a landlord reference letter:
- The length of occupancy: It is best that a tenant’s history shows they stay in properties for more extended periods. Apart from work-related moving, someone who always has short tenancies could be a problematic tenant.
- Rent amount: The amount of rent they paid will confirm if they can pay your monthly rental amount. Of course, you should also get an income verification letter and run a credit check.
- Pay rent on time: Always ensure that the tenant’s rental history shows they paid rent on time. Even the wealthiest tenant is a bad one if they don’t pay rent on time. Late rent payments disrupt your cash flow and result in late payment fees.
- Cleanliness of the property: Did the tenant keep the previous rental unit clean? Everyone has their own standards, but there must be a certain level of cleanliness.
Damage to the property: Accidents can happen, and on occasion, there might be some damage. What is important is that the tenants either repaired it themselves or paid for the damage.
- Complaints: Complaints from neighbors could be a sign that the tenant will disrupt your neighbors.
- Condition of the rental unit: How did they leave the property? Tenants who leave a property in a lousy state increase a landlord’s expenses. Repairs and loss of rental income can be expensive.
- Renting to the tenant again: There are legitimate reasons why good tenants move home. So, it’s helpful to find the reason for leaving. If the landlord would be happy to rent their property to this person again is a good sign.
A word of caution: The tenant’s current landlord could give a glowing reference about them to get them out of their property if they are causing problems.
What to Check in a Landlord Reference Letter to Spot a Bad Tenant
It’s vital to get as much information about a potential renter’s character in the screening process. The landlord recommendation letter is a primary way to know what kind of tenant the applicant is. Even if they always paid rent promptly, they are hardly a good tenant if they trashed the property or caused disruption.
Here is how to use a landlord reference letter to screen tenants during the application process.
1. Late or no payments
You can’t afford to rent your property to someone who isn’t going to pay rent or has a habit of paying late. You should also check the applicant’s credit report. Their credit history shows their attitude towards paying bills and getting into debt. Remember that late rental payments are lease violations.
If you notice issues with payments, find out why. It might be something silly, like they forgot about a payment. Or there may be a legitimate reason why they couldn’t send the rent on time. In this case, offering online rental payments or automatic payments could solve the problem. However, never ignore red flags when it comes to making payments on time.
Evictions are a huge red flag. It could be due to late payments, not paying, or serious trouble with the tenants. Evicting tenants is always a last resort that landlords take. It costs time, money, and plenty of resources to evict a tenant. Of course, there are two sides to every story. But it’s usually best to stay clear of tenants with an eviction history.
Evictions aren’t just about tenants who don’t pay. Having a tenant that won’t leave after the lease agreement has expired means you have a property you can’t earn an income on.
3. Tenants who damage property
Any repairs are going to have to come out of your pocket. It would be best if you assumed that a tenant with a history of damaging rental property would do the same to yours. Remember, your profit and income depend on getting good tenants. Is it worth the cost of letting a bad tenant in the apartment because you forgot to check the letter of recommendation?
You may be able to do a criminal background check. However, this is only possible if your state permits it.
4. Neighbor complaints
Disruptive tenants result in unhappy neighbors and problems you don’t need. All tenants have a right to quiet enjoyment—meaning they can enjoy reasonable privacy, comfort, and peace in their accommodation. Tenants who play loud music or are rude will upset neighbors. If you lose other tenants because of one bad apple, your income will suffer. When speaking to previous landlords, ask if there were any issues with neighbors.
5. Complaining tenants
Try to avoid tenants who are in the habit of complaining. For example, tenants who call every day wanting one thing or another. Therefore, you should ask previous landlords about the tenant’s attitudes towards maintenance. Were they the type of person who considered everything an emergency? Equally as bad if the tenant avoided all communication and didn’t inform the landlord about maintenance issues.
6. The pet lovers
There is absolutely nothing wrong with having pets—if your tenancy agreement allows for it. But remember, too many pets can lead to bad smells, damage, and potentially upset neighbors. It is always sensible to limit the number and size of pets. The lease terms could also state that they must inform you before getting a pet.
7. The tenant left the property in a mess
A deep clean doesn’t sound like the end of the world, but you should be concerned if the previous tenant has mentioned this. The chances are high that you will also have to clean up once they leave. More importantly, it shows a lack of respect for the property and towards the landlord. Have a strict ‘leave as you find rule’ as part of your rental agreement and remind tenants of this policy before the lease ends.
Landlord Reference Letters to Avoid Bad Tenants— In Conclusion
The landlord reference letter is a vital element of a rental application. You should get a letter of reference, as well as checking employment history, paychecks, and credit reports. Finding the ideal tenant for your property requires time and property screening.
The perfect tenant will have an excellent financial history and be a pleasure to communicate with. Good tenants have a reputation for paying their rent on time, notifying you of the maintenance issues, and keeping the rental unit clean. They will also be polite and friendly towards your other tenants.
Some applicants may have had the odd issue in the past, but this doesn’t mean you should exclude them. When too many red flags start to appear, consider carefully if the rental payment is worth the potential problems.