Desperate times have brought leniency to the rental industry. In an effort to make up for lost revenue, hosts and property managers may be tempted to cut corners, accepting any and all renters interested in booking.
In many cases, the pandemic has pushed renter screening off the table altogether. With efforts focused on maintaining financial health, overlooking warning signs is easy. As a result, you may end up hosting someone who overstays their welcome.
What is a squatter?
In the rental industry, a "squatter" is someone who stays longer than their agreed-upon dates. In other words, a squatter is a person who occupies your property without owning, renting, or having a lawful reason for doing so. Under certain circumstances and in certain regions, evicting squatters is difficult and can cause serious financial and legal headaches.
COVID-19 has increased the risk of squatters since many property managers are shifting towards mid- and long-term stays because of the drop in short-term vacation rentals. This, however, brings up issues of tenancy rights and increases the risk of renters overstaying their welcome. To steer clear of conflicts or a lengthy eviction process, check out these tips on avoiding squatters.
1. Know the warning signs.
The first step to avoid squatters is keeping them out of your property in the first place. To do this, look for the warning signs. Typically, troublesome renters can be identified by vague or hasty responses to your questions. If you’re having trouble getting answers from a tenant prior to them moving in, don’t bother renting to them—they’ll likely bring more harm than good. It's your right to select renters who are best for your business.
Pro tip: If the renter booked from Kopa or any other online platform, check out their reviews—both incoming and outgoing. Poor reviews from hosts means they’ll likely cause you grief during their stay. Poor reviews of hosts could mean they have unfair and unrealistic expectations.
2. Ask for a deposit and state your payment requirements.
Receiving payment from a tenant should never be in question. Require renters to pay some upfront costs before they move into your rental property to prove they're serious about the space and protect you from any unpaid rent and/or damages. These can include:
- Security deposit, which is typically $500-$1,000 per bedroom.
- First month's rent, which equals the amount they'd pay for their first month.
- Last month's rent, which equals the amount they'd pay for their last month.
- Add late payment fees for monthly rent that's more than 3-5 days late.
- Run a credit check to ensure the renters can pay their monthly rent and deter any renters who aren't serious.
Over time, you'll determine what is a good deposit amount that addresses your needs of financial security and closes prospective renters by not scaring them off with a big deposit. To ensure the renter is aware of all these requirements, state them directly on your listing and in any messages you send to them. That way, there will be zero room for misunderstanding the terms and conditions of the stay.
3. Require rental and employment information.
Ask the renter questions and collect personal info to keep them accountable during their stay. (Just make sure the questions are acceptable under the Fair Housing Laws.) While many platforms like Kopa require contact info to sign up, you can find out about the purpose of the renter's stay. If they’re booking with housemates or roommates, collect the personal details of the other renters as well.
If the renter is staying multiple months or looking for a more flexible arrangement, ask about their employment history. It’s important to know that they’ll be capable of paying the rent. If they don't provide an adequate offer letter or employment verification, consider asking for a reference to ensure they’re employed or have some income to cover their stay. If you still have doubts about the stay, run a background check to give you a more complete picture of the renter.
Collecting this info can help you decide whether or not you’re comfortable with the renter. If they’re a local, find out why they need a temporary accommodation and make sure they understand that it is temporary.
4. Sign a lease.
Whether you're renting mid-term or long-term, you need to set clear expectations and rules about people living in your property. Be clear about the conditions of their stay, and be specific about what day you expect them to move out of the property. To protect yourself, write out your rules in a legally-binding rental agreement (also known as a lease) and have the renter sign it.
If the renter breaks this agreement, you have legal grounds to evict them or charge them with trespassing if they refuse to leave. It’s your responsibility to protect your property and business, so make your rules clear.
5. Plan for the worst-case scenario.
Even as a responsible host, people can slip through the cracks. In case this does happen, have a plan for evicting squatters. This could mean speaking with a real estate attorney in case a renter is fighting with you over tenants' rights or calling the police to kick them out on the basis of trespassing.
6. Trust your gut.
Even when times are tough financially, don’t skimp on renter screening. When done properly, it can actually save you money. Getting hit by unpaid rent or property damage will often cost you more than the original payout. Even worse, if you have a squatter, you could have a long and costly legal battle ahead.
If you suspect a renter has ill intentions, you’re probably right. Watch out for red flags and don’t take any chances.
This post was written by Autohost, a background check and guest-screening system for hospitality providers. The intelligent software verifies guests to protect properties, owners, and communities in the vacation rental space.