CategoriesProperty Management

The Importance of a Tenant Background Check

tenant background check

Did you know that over 77 million people in the United States have a criminal record of some kind? While most of them are nothing worrisome, that statistic really highlights the importance of a tenant background check if you’re renting out your property.

This is especially important if you’re not around to be able to physically meet with the people you’re looking to rent to. Why? Well, when you’re not living in your house, it’s important to make sure that you have a solid property management system in place.

This includes doing a tenant background check to make sure you’re entrusting your property with responsible and reliable people. Tenant background checks are easy to do and can give you peace of mind while you’re away. Not sure what this kind of background check entails? Read on to learn how you can start to better screen prospective tenants.

What Is a Tenant Criminal Background Check?

A tenant criminal background check is a screening process that landlords use to evaluate potential tenants. The landlord will obtain a report from a credit reporting agency or another company that specializes in tenant screening. The report will include information about the applicant’s criminal history, as well as their credit history and any previous evictions.

Ultimately, as a landlord (or even as a property manager if you manage multiple properties), you can use this information to determine whether or not the applicant is a good fit for your rental property.

However, it’s important to keep in mind that there are other factors to consider when making a leasing decision. Other factors, such as the applicant’s rental history and credit score, are also important. When it comes down to it, though, it’s a great idea to use all of the information at your disposal to make the best possible decision for your property.

What Does a Tenant Background Check Reveal?

The specific details of what a landlord can learn from a tenant’s background check will vary depending on the company conducting the check and the information that the tenant has provided. However, most checks will include a review of the applicant’s credit history, criminal record, and rental history. Landlords may also contact references provided by the applicant.

Credit History

A renter’s credit score is a great way to gauge someone’s financial responsibility. While you don’t need to know about their credit card spending, their score will demonstrate their ability to pay rent on time. Additionally, a renter with a history of late payments or bounced checks is more likely to fall behind on rent, which can put you in a difficult financial position.

Criminal Record

If you’re renting out a property, it’s important to know your renter’s criminal record. There are a few reasons why this is important. First, it can help you to screen for bad tenants. If someone has a history of violence or theft, for example, you may want to think twice about renting to them.

Additionally, it can help you to avoid potential liability issues. If a tenant with a criminal record commits a crime on your property, you could be held responsible.

Rental History

You obviously want to ensure that a tenant will be able to responsibly live in your home, pay rent on time, and not create major damage. Checking their rental history is a great way to do this!

If they have a history of paying rent late or skipping out on rent altogether, that’s a red flag. Additionally, their rental history can give you an idea of how well they take care of a property they live in. If they have a history of trashing apartments or leaving them in disrepair, that’s something you’ll want to know about. 

Is Tenant Screening Legal?

The simple answer is yes. As a landlord, you have the right to screen your tenants to ensure that they will be good for your property. This includes running a credit check, checking references, and even requiring a criminal background check. 

However, the real answer to this question is both yes and no. For some landlords, screening potential tenants is a way to protect their property and ensure that only qualified individuals are living in their units. However, there are also risks associated with screening tenants. If landlords use criteria that could be considered discriminatory, they may open themselves up to legal action.

As a result, it is important for you to familiarize yourself with the law before screening potential tenants. When done correctly, tenant screening can be an effective tool for protecting your property. However, it’s helpful to speak with a property management specialist before you start taking actions that could potentially result in legal liability.

3 Benefits of a Tenant Background Check 

Still not sold on the benefits of background checks for potential tenants? Here are three big benefits we’ve seen from others in your situation.

Reduce Tenant Turnover

Running a background check on potential tenants will reveal their rental history. In this history, you’ll want to look for trends. This will give you an idea of how long they tend to stay in one place.

If they’re constantly moving around, that may not be the best fit for your property. By looking for responsible renters before signing a contract, you can reduce tenant turnover and ensure those who rent from you stay for a long time.

Save Time and Money

Tenant turnover is costly and so are frequent repairs due to damage and other costly rental issues. By screening out problem renters, you can avoid the hassle and expense of dealing with late rent payments, damage to your property, or other issues.

Peace of Mind

Finally, and often most importantly, knowing your tenant’s criminal record can simply give you peace of mind. If you’re aware of any potential risks, you can take steps to mitigate them.

As an absentee homeowner, that peace of mind is worth any background check cost you might have to pay.

Get Help With Tenant Screening

Interested in getting a tenant background check for each of your potential renters? You don’t have to figure it all out alone. At Reedy & Company, we offer property management services that include tenant background checks as part of a rigorous screening process.

Our goal is to help make renting your property as simple as possible. Get in touch today to learn more about how we can help.