10/23/2014

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Professional (Scam) Renters

Professional renters are scam artists who take advantage of landlords, and the legal system, to live in property, sometimes for a year or more, without paying rent. They know all the federal, state, and local landlord/tenant laws, and they use them in an effective way to keep a landlord off balance and unable to have them evicted immediately.

These people are professionals and they are almost impossible to detect. They use false names, addresses, employers, and they know how to make it appear, in the beginning, that they are legitimate and trustworthy.

Today, many property owners have become landlords by default. During times when property values were rising rapidly due to unchecked inflation and the real estate market was booming, people bought properties solely for the purpose of reselling them, called flipping, and making a quick profit.

But with the sudden downturn in the market caused by the rapid deflation of real estate prices, many people were left holding properties that were no longer sellable. The sudden drop in value caused also left many people with upside down mortgages. This means that the properties are, in essence, worth less than what is owed on them.

Inflated real estate prices left many people holding properties with extremely high monthly mortgage payments. These properties became hard to sell, and with the mortgage fiasco, the properties couldn't be refinanced either. This proved to be a double hardship on many investors, so to keep from losing their properties through foreclosure, many had no choice but to rent the property, thereby becoming inexperienced and reluctant landlords.

With so many properties being lost through foreclosure, those people who owned many of them have become renters, thereby making the rental market great for those who may be able to withstand a negative cash flow.

But even so, many people find themselves just one payment away from foreclosure or bankruptcy. They can't stand having a tenant who does not make his rental payments, not even once.

A landlord should use all available tools to screen potential tenants. Never let a tenant move in to your property until:

  • You check credit history
  • Verify employment
  • Communicate with former landlords about a tenants past rental history
  • And never let anyone move into your property until their first months rent and deposit check has cleared the bank.

So landlords must always be aware of professional renters whose only ambition is to live for free as long as they can get away with it. This causes undue hardships for landlords. Once a landlord gets caught up in a situation with professional renters, it's hard to recuperate, especially if the property owner has to make the monthly payments himself for an extended period of time.

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