There are many reasons for carrying out tenant background checks. Tenant screening helps landlords avoid renting to unsavory characters whose behavior may drive down property value and rent rates. Conducting background checks can also help property owners and landlords avoid occupants who may cause property damage or threaten other residents.
Every landlordâ€™s worst nightmare is the â€œprofessional tenant,â€ a person who moves from rental to rental, damaging property and/or failing to pay rent. Tenant screening often weeds out professional tenants â€“ indeed, just mention that you conduct tenant background checks, and most professional tenants will skedaddle. Finally, having a consistent, fair tenant screening procedure will help you comply with federal laws on fair housing.
A thorough tenant screening procedure should include the following investigations:
Employment History, Personal References and Rental History
Your tenant application should ask each interested party to complete a form outlining employment history, personal references and rental history. The employment history portion of this tenant screening process will help you appreciate the tenantâ€™s current financial capabilities. Can they afford your rent? An employment history check can help you find out.
Reviewing personal references is another important part of tenant screening. Most of the time, applicants will cherry pick only references they know will provide a glowing recommendation of their character, but once in a while following up on a reference will raise a red flag. Speaking with personal references can help you establish whether a prospective tenant is dependable.
A review of aspirantsâ€™ rental history should also be included in tenant background checks. If possible, contact each previous landlord in a tenantâ€™s background and double check that the individual in question left the property in good condition, and in good standing with fellow renters.
Personal references, rental history and employment history are crucial pieces of the tenant screening puzzle, but because theyâ€™re fairly easy to spin in oneâ€™s favor, itâ€™s important to include other services in your tenant background checks. Read on to discover other recommended tenant screening investigations.
Consumer Credit History Check
A credit history check can help you understand a potential tenantâ€™s personal character. If a credit investigation turns up bankruptcies or liens, it could indicate a general lack of financial responsibility and a consequent willingness to let rent payments slide. On the other hand, if your consumer credit history check reveals consistent on-time payments to credit card companies and others, you can bet this person will also act in a financially responsible way as your tenant. No tenant background check is complete without a consumer credit history investigation.
Eviction History Check
National and county-level databases may be searched for any history of evictions. This level of tenant screening detail is probably unrealistic for the small property owner, whose time is too limited to allow such in-depth inspections. However, a third-party background check company has often spent years developing eviction history resources, so you may find it cost effective to outsource this aspect of tenant screening.
Federal, State and County-Level Criminal History Check
Federal, state and county-level databases can help you check that a potential tenant has not been convicted of crimes. The county-level seven-year history search is usually most effective and is based on a tenantâ€™s counties of residence. Federal criminal database records are available for 40 states and are drawn from court records, state prisons and sexual and violent offender lists. State-level criminal searches can help fill in gaps between county and federal-level searches. Finally, a search of the 49-state sex offender registry should be included in your tenant screening procedures.
Liens and Judgments Investigation
Professional background check companies often offer liens and judgments investigation to supplement personal credit history information. Ordering this analysis gives you one more layer of security regarding tenantsâ€™ fiscal responsibility.
Conducting the above investigations as part of your tenant background checks will help you find respectful, delightful tenants. One last piece of advice: Be sure to include all names a person has gone by in your analysis. Otherwise, you could miss a crime or fiscal peccadillo committed under a former name.
Considering the amount of time it would take the average individual to educate themselves on how to properly conduct a tenant background check, many landlords entrust their tenant screening process to a professional background check company.
[ Photo by: cincyproject, on Flickr, via CC License ]