So you have just purchased a rental property, and after much renovation and painting you are ready for those first tenants. But just how do you make sure that they will not only take care of your property like it was their own, but pay that rent on time every month?

Tenant Screening can give you a good idea of their rental history and if they pay their bills, but my lawyer gave me one tip that I have followed completely and it has worked so far. i even used this tip when I found new tenants through word of mouth and didn’t do a credit background check. I simply made sure they were employed and followed this one tip.

Tenant Screening Question

Can you fill out these forms to put the utilities in your name? Then watch their reaction. If they squirm or look scared then you know they are not the tenants for you.

If they have run from other rental properties, have a slew of unpaid bills, or simply dumped the last landlord with the heat and electricity, then this question can empty a room of prospective tenants quicker than yelling FIRE. They have to be in the good books with utilities to get them in their own name.

My lawer gave me this great tip. He said you can have people with the best jobs, high end careers, that pay their car loans and have many toys they have bought and paid for, but if they fall behind with the utility companies, they will not get the utilities in their name without either A. paying off what they owe, or B. giving a very large deposit. The utility companies are not lenient. You pay or else.

I am not lumping tenants all into one bad pot, but utiltiy companies don’t go after their cars or other possessions for non-payment, and if the tenants felt the heating bill was too high where they were, they may not have paid it all and simply moved out,

Utility Companies Have Very Long Memories When it Comes to Tenants

But the electric and water and even gas companies have a very long memory, so many prospective tenants will try and get you as the landlord to keep the utilities in your name and they “will pay you”. They will come up with some kind of sob story about how they were paying to much and there were errors and blah blah. Don’t fall for it. Or they may suggest you raise the rent to cover the utilities, don’t fall for that one either, or next thing you know the heat is set at 75 degrees and they are hanging out in their tee shirts in the winter while you pay the heating bills

Beware of Tenants That Want You To Cover Utility Bills

A friend of mine fell for this story, and each month the utility bills were very high because the tenants simply didn’t care and jacked the heating and used tons of water, she would give them the bill and they would “forget” or “don’t have enough money”.

Next eye opener, is that you cannot simply turn off the electricity and water to tenants. So all you can do is start the eviction process. She did this, and by the time they left under eviction she was stuck with a 1200 dollar electricity bill.

So, do your tenant screening and make sure they have jobs, but at the end of the day if they squirm when you tell them the utilities have to go in their own name, then show them the door.

Also see Buying Rental Property and Do Your Tenants Have Renters Insurance for more tips on investing in rental properties.