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Perform Screening Tests To Prevent Delinquency In Real Estate

Aug 17, 2007
The best way to benefit from any real estate investment is to lease it for a stipulated period and a particular amount. It is an excellent option for the flat owners as they get a chance to recover the amount they invested in buying the property. For the tenants, renting an accommodation is a good idea if they are not looking at a permanent establishment or do not have adequate finances to buy an accommodation. However, both the landlords and the tenants need to perform rigorous screening tests on one another to check any possibility of a fraud or defaults.

Preventive Measures For The Tenants
It must be a strict no to taking an accommodation on lease without signing a proper lease agreement. The small print of the lease agreement document could be strenuous to your eyes, but when read through carefully, keep the possibility of all potential dangers away. Therefore, you must read all clauses mentioned in the lease document carefully. In case, you do not understand something printed on the document, seek the professional help of an advocate.

Always check a lease agreement for waiver provisions. Such provisions authorize the landlords to evict their tenants before the lease period is over and could cause significant trouble if left undetected. Further, check for a clause in the agreement that avoids your landlord showing the apartment for a second lease to the future tenant or for sale to potential buyers. This could interrupt your privacy.

Lastly, do not rent a place that is not in good condition and refrain from doing any repair works in the agreement. Do not undertake any renovation in the rented accommodation, as the landlord is authorized to demand it the way it was originally.

Preventive Measures For The Landlords
It is important for the landlords not to be carried away by the documents furnished by the potential tenants to qualify for the deal, as those who intend to do frauds can easily create fake documents. Double check the tenant's credit history and verify that with what the tenant has provided to you on the lease application form. Such information will give you insights into the tenant's payment patterns and ensure trustworthiness. Generally, people with bright credit histories make good tenants.

Further, check the identity of the potential tenants carefully. You can ask them to produce before you various bills, such as, water bills, mobile phone bills, and landline telephone bills. After verifying the name and address, it will be a good idea to contact the tenant's previous landlords to find whether the person pays on schedule and maintains the property well.
About the Author
David Gass is President of Business Credit Services, Inc. His company publishes afree weekly e-newsletter on Small Business Consulting at their web site http://www.smallbusinessconsulting.com
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