As a landlord, not every tenant is suitable to rent your property. Of course, you don’t want frustrations, stress, and damage caused to your property.
For legal, financial, and personal safety, it’s vital to have tenant screening before letting your property. Tenant background checks are similar to an x-ray allowing you to know more about your potential renters. You can easily identify red flags, avoid problems, and pick the best renters.
Know who you rent to for safety precautions, liability protection, or reducing tenant turnover. Whether using a tenant screening service, property manager, or doing it yourself, tenant background checks help you confirm a tenant’s identity, criminal record, credit report, and proof of income.
You already have an idea of how important tenant background checks are, right? But what exactly should you include in your tenant screening checklist?
To get you started, here are some of the things to include in your tenant background checks.
A credit report is one of the utmost factors to include in your tenant background checks. With credit report info going back 7 to 10 years, it’s a gold mine of information for you. It helps you to dig deeper into the financial history of the potential tenant.
You don’t want the stress and hassle of dealing with tenants who don’t pay their rent on time. Your tenant’s credit report status helps you determine if they can pay their bills on time.
While the credit report won’t show the credit score of your potential tenants, you can see their loan status, bankruptcy, and collection accounts. You also see past lawsuits, implying you can know if the tenant has had a past dispute with a landlord for failing to pay rent. Well, don’t forget to confirm their identity to ensure they don’t pose as someone else.
Sex Offender Registry Check
Do you know renting out to registered sex offenders can get you sued if your property is close to a school, park, or other places visited by children? To avoid such instances, be keen to avoid leasing to such tenants. Screen your tenant through the sex offender registry to check on the current status.
Also, sex offender checks can be regulated by the state. You thus want to check on where your state stands prior to screening potential renters for sex offenses.
Check on Criminal Background
While it’s considered discriminatory to prohibit individuals convicted of crimes, it’s your call to make. As a landlord, develop your own criteria and policy of the background checks to take tenants through.
If you feel renting to a person convicted of crimes will jeopardize your property safety, then you can avoid them. However, consider the type of offense in question, the severity of the offense, when the crime was committed, and legal restrictions in your state.
At times, a criminal background check is viewed as discriminatory. While some states and cities allow for a criminal background check on tenants, others don’t. You thus want to check on whether there is a provision in your state.
Proof of Income and Employment Verification
In accepting potential renters’ applications, it’s vital to check on their proof of income. The reason is, you need to determine if they can afford the amount you are charging for rent. You are within your rights to confirm your potential tenants can pay rent comfortably.
One of the easiest ways to collect employment information is by requesting recent pay stubs. You may ask for the pay stubs for the last three months. However, if your potential renter is a freelancer or self-employed, then ask for their most recent tax returns.
In addition, you may want to reach out to their employer for employment verification and clear any doubts.
References From Previous Landlord
What made the potential tenant move out of their previous residence? While it’s not a must, you may consider asking for a reference from the previous landlord. This offers you more insights into the potential renter from a landlord’s perspective.
The reference can either be a formal letter or you can ask for the previous landlord’s contact to reach out to them. You want to know if the tenant paid rent in time, if they were evicted, their rental history and if they maintained the property in the right condition.
The information is right from the horse’s mouth and can go a long way to help you make a better judgment.
Has the potential renter been evicted before? Eviction is the nightmare of every landlord. By all means possible, you need to prevent an eviction situation from ever happening.
One way to shun eviction possibilities is checking on potential tenant eviction history. You need to determine if the tenant was previously evicted and what the description of the incident is. If you are not sure, inquire about this when calling their previous landlord for a reference.
A tenant screening company can also help with tenants’ eviction records. These are found from their rental history report database. By working with a tenant screening service, you can ensure the entire background check is done thoroughly and effectively.
Hire a Property Management Company to Conduct Tenant Background Checks
As a landlord, the aim is to find reliable tenants who will pay rent on time and take care of your property. This calls for tenant background checks before accepting any rental application. Tenant screening provides a detailed overview of your applicants.
Are you looking for a property management company in Memphis? Reedy & Company has got you covered.
We offer our clients best-in-class advice in making property decisions. We screen the best tenants to take up the house, reducing vacancy losses and ensuring a consistent income stream.
Contact us today for more info.