Pub. 2 2017 Issue 1

14 www.ctaahq.org MAKING BETTER DECISIONS ABOUT TENANTS T his is a good time to be in the rental business. Rental prices have been going up and the credit ratings of residents have been improving. That translates into a strong rental market. But that doesn’t mean a property manager doesn’t have to be careful when deciding whether to accept someone as a tenant. Evicting tenants is unpleasant. It is also expensive. Court costs and lost revenue and operating costs can average $3,500 per unit. Unfortunately, evictions are also an unpleasantly frequent fact of life for most property managers. The typical eviction rates annually in the U.S. are three percent of the residents. The percentage varies by property type and by state. For example, high-end properties generally have a lower percentage of evictions than low-end properties, and state law has an impact as well. It is easier to evict someone in, say, Texas than it is to evict someone in California; Washington, D.C.; or New York. How can a property management evaluate potential residents to determine whether someone is likely to be a problem? The best answer is to screen them. When you are screening potential tenants, some methods of screening are legal and some are not. Federal housing laws prevent you from screening out anyone on the basis of age (except for some senior-citizen communities), family status, gender, national origin, physical or mental disability, race, or religion. In some places, it is also illegal to screen out someone for marital status, gender identity, sexual orientation, or a source of legal income.