Don’t Be Afraid to Ask For Asset Verification (such as bank statements).
In this economy, you will encounter a lot of rental applicants who have experienced foreclosure and/or bankrupt and many of these applicants can be excellent tenants. However, you must look for the clues that will tip you off regarding a potentially problematic tenant. For example, if you see that your applicant has filed for Chapter 7 or 13 bankruptcy but the case was dismissed, this could be a red flag for many possible reasons. Just be aware that a dismissed bankruptcy petitioner never received a discharge and all of their debts are still outstanding. Also, be aware that there are many people who have gone through bankruptcy without having any judgments or evictions in their record. When you see an applicant that has gone through foreclosure which involved an eviction, beware! This means that the lender had to forcefully remove them from the property.
If you stick with the rules and avoid cutting corners or having pity on an unqualified applicant because they have appealed to your sympathy, you will be able to eliminate nearly all of the bad tenants.