Successful entrepreneurs and small business owners are good at spotting trends. More importantly, these individuals have a knack for monetizing while others may miss a golden opportunity.
Being a landlord for more than 30 years, I’ve run my share of credit and criminal histories on prospective tenants as part of their application process at the time of a property turnover. But I’ve never been asked by a tenant to undergo a landlord screening. You may wonder if there really is such a thing.
Meet Jesse Lince, vice president of marketing for Data Verification Services Inc., an Everett-based company that serves many area property management companies and landlords. Lince has seen some positive trends with the growing numbers of rentals that continue to make his business prosper. He’s part owner of DVSI, has been working in this industry for several years and has noticed some troubling trends.
“There are a high number of properties in the process of foreclosure or sitting vacant that are perhaps abandoned or bank-owned,” Lince said. “What we’ve noticed is that there are unsuspecting tenants who sign a lease for a house, thinking they are working with the actual property owner, or believing that the property is not in fact in the later stages of foreclosure.”
People will pay the first and last month’s rent along with a hefty security deposit. Add to this the cost of switching utilities, moving expenses and even simple home decor and tenants could easily invest over $5,000 up front with their move.
When Lince had some friends experience fraud first hand, he decided to learn what the industry was doing to protect tenants. These friends were duped by a con artist who posed as a property owner with keys to a nice vacant house and a great move-in deal on Craigslist. Within several weeks they learned that the house had been vacated as part of a bank foreclosure action and that the individual with whom they had signed the lease was not the owner. And he was long gone.
“Few companies offer a landlord screening service,” Lince said.
But there are plenty of folks in the rental market who would prefer peace of mind that theirs is not a home that will become a major legal or financial fiasco. DVSI offers a simple credit history and property status report that allows a tenant to determine if the landlord is on the up and up.
“It’s good to know up front that the taxes are paid and the mortgage is not in default,” he said.
Three categories evaluated by DVSI include establishing the legal owner, a clear mortgage status that has no flags for delinquency and property taxes paid to date. Any of these measures would be red flags if they come through with questionable information. And even if all is clear in the report, it’s important that the prospective tenant ask to check the ID of those with whom they are entering into a lease agreement.
Tom Hoban is a principal with Coast Real Estate, managing commercial, residential and high density properties throughout the region.
“It’s not surprising to me that there are people out there looking to take advantage of unsuspecting tenants in this way. What I’ve found most helpful is to know the people you’re doing business with,” Hoban said.
Hoban suggested that even if a person has keys to a house and is able to show the place as if they were the owner, you should still ask questions that would help to determine whether there is cause for concern. Perhaps asking about the former tenants or how long the property has been vacant. Ask about the typical utility bills for the place, or what day of the week garbage pickup occurs.
Lince indicated that there are other services DVSI is developing to serve prospective tenants searching for the right home. Learning about crime rates in a particular neighborhood is high on many renters’ list, as may be the quality of schools. The company is showing great awareness of trends and services that will support their customer’s needs.
“There is no substitute for due diligence,” Hoban said.
Landlords and property managers have been using screening services to establish the suitability of prospective tenants for decades; it’s certainly reasonable to encourage tenants to arm themselves with information to establish whether or not their working with a legitimate owner.
To learn more about DVSI and these emerging services, go to their website at DVSIOnline.com.
Juergen Kneifel is a senior associate faculty member in the Everett Community College business program. Please send your comments to firstname.lastname@example.org.