Yes, selling the house would be ideal. But if you cannot sell it and a short sale is out of the question, let me tell you a bit about renting and some things to watch for in the world of rentals:
Sometimes, you’re just not sure about a tenant. Maybe everything seems OK on paper, but you have an intuition that says there’s something untoward beneath the surface. Maybe you’ve got an ex-felon with no credit who claims to make $65,000/year mowing lawns, but he has honest eyes and a firm handshake. Either way, you’re going to want to get more information — here are some clever ideas that might help.
Actually call all of their references. The more people someone is willing to give you the phone numbers of, the more likely it is that they’re a functional member of society — and vice versa. In particular, look up past landlords on their credit report and call them, and call their hand-picked “references”. Sure, they’re hand-picked, but sometimes even a hand-picked reference will spill the truth about someone — and if the prospect’s hand-picked references can’t say glowing things about them, you probably don’t want to deal with them in the first place.
When you call their previous landlords, be careful not to ask them leading questions. If someone gives their roommate’s phone number as a previous landlord, and you ask only yes/no questions, of course, they’re going to give you the right answer. Instead ask them questions like “When did X move in?”, “How much was their security deposit?”, and so on. Be sure to ask them at least one question you know the answer to, and lead them in the wrong direction, for example asking “How did X fare in his three years at your property?” (Knowing full well he only lived there for six months.) That way, you’ll be able to verify that you’re actually talking to the landlord you want to be talking to.
Look them up on the social networks. It can be difficult detective work, sometimes, figuring out which of the John Smith happen to be the one that wants to move into your property — but if you can find something without investing an hour’s work, the results can be surprising. People share the darndest things on Facebook and Twitter!
Drop by their current residence. Getting an unannounced look at their current living space — even just through the front door — will often tell you things about their lifestyle that no amount of interviewing will. Come up with a form to drop off or a signature you ‘missed’, and try to chat them up at their front door. If they invite you in, that’s a huge plus. If they come outside and close the door behind them, ask yourself why they would do that. We do recommend calling from in front of their residence as opposed to just knocking. This is safer and still won’t give them time to hide anything.
You’re never going to be able to keep out every problem tenant — but if you set your standards logically and you don’t back down on the details, you can reduce your tenant-related stress enormously. Set your standards as high as the neighborhood will let you, and don’t back down.
One more tip. Never, ever, ever allow a person to sublease a property. This is when the original tenant refers someone to you and they original person did not follow their lease and are trying to pass it on to someone else. Never allow for this to happen, because odds are that it will end badly. Birds of a feather flock together and when there is one that is willing to burn you, there is another close behind willing to do the same thing. Start fresh, move on with a new prospect.
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