Posted by Ryan Howard on Mon, Aug 29, 2016
Landlords and property managers are wise to consider a potential tenant's background before they decide to rent to them. Not only should you protect your property investment, you may have to think about neighbors, homeowner's associations, security concerns and most importantly, can your tenant pay rent on time? If you go with your gut, you may be shelling out cold hard cash in eviction costs later. In fact, screening before renting can give you peace of mind and a better idea of the person signing the lease agreement.
Which background checks will give you the answers you need about a new tenant?
Basic Background Check and Social Media
Many property owners may opt to perform a basic background check on potential tenants as well as a search into the applicant's social media. A basic background check will include:
- Identity verification
- National criminal database background check
- National sex offender search
With limitations such as cost and time, these basic searches will provide valid information including fraud indicators. Be aware, however, of what's missing from a basic background check. After obtaining this data, are you sure if your tenant can pay rent on time?
A search of an applicant's social media, a topic still under scrutiny, may also provide data but these types of searches could potentially be used against the landlord if the tenant is denied housing for discriminatory reasons.
Credit and Financial Background Check
In order to determine the applicant's creditworthiness and rent payment history, landlords should run a credit or financial background check for tenants. The following reports will offer insights into the tenant's finances:
- Credit history report (with FICO scores)
- Credit summary listing accounts, liens, bankruptcies and more.
- Rental history to assess past rent payment records
VeriFirst Tenant Screening also provides a numeric risk score that will predict the applicant's ability to pay rent on time.
Criminal Records and Tenant Reliability
There are many ways in which a tenant is deemed reliable inclusive of paying rent on time and having a clear criminal record. In fact, earlier in 2016, the Department of Housing and Urban Development established new criteria with regards to discrimination for criminal records. Applicant's cannot be denied housing if they have an arrest record without a conviction. All rental policies must be revised to include these new requirements.
Property owners may also like to know if their potential tenants have a history of property damages, unpaid rent or deposits from previous rentals. A Tenant Eviction Record Search is an instant statewide search to determine if your applicant may skip out on you and leave you with damages or a big bill.
Stay Compliant and Stay Out of Court
Interested in learning more about your tenants? Remember that your rental policies and lease agreements but maintain privacy and credit rights of your applicants. Instincts can also be useful but back those up with accurate data provided by a professional background screening company. Let us know if you need assistance with your tenant screening policy.