Whether you are a single property landlord or a professional property management company, one of the most critical steps in the screening process is the background check. Running thorough background checks on prospective tenants is the frontline defense against any rental drama down the line. Knowing what is covered, and sometimes uncovered, in a tenant background check can help you make informed decisions and minimize risks to best protect your property. Â
Identity Verification
Step one is confirming that the applicant is indeed who they say they are, and this is essential for security purposes. In order to do so, you will need to require proof of identity in the form of a driver’s license or passport.
Credit Check
A tenant’s credit history provides valuable insight into their financial reliability and responsibility. This portion of the background check examines credit score, outstanding debts, and payment history allowing you to gauge their ability to afford the rent and pay it on time. You will want to keep a close eye out for any possible red flags such as collections accounts or consistent late payments.
Criminal History
One of the more important facets of a background check is the criminal history. Safety is paramount for yourself, your property, and your other tenants. The criminal history screening will allow you to identify any past convictions that may be a cause for concern or pose a risk to your property or neighboring tenants. For a comprehensive assessment, search at the local, state, and federal levels.
Rental History
It’s said that past behaviors often predict future actions, and this can be applied to rental habits. Reach out to past landlords or property managers provided by the applicant to get a look at their rental history and behavior. Ask about their payment record, lease compliance, and any instances involving eviction or damages to the property.
Eviction History
History of an eviction can be a major red flag. Be sure to look for any indication of past evictions or legal actions filed against the applicant by previous landlords or property managers. While every circumstance may be due to a unique situation, understanding this bit of history can help you assess any future risks.
Employment and Income Verification
Stable income is essential for reliable and timely rent payments. By verifying the applicant’s employment status and income, you can ensure that they are able to afford the rent. Do so by requesting pay stubs or tax documents and contact their employer directly for confirmation.
References
Reaching out to personal and professional references gives you insight into the applicant’s reliability and character, so be sure to request a few sources from your applicant.
Background checks are imperative when properly screening prospective tenants. Conducting consistent and comprehensive background checks for each of your applicants greatly mitigates any risk, protects your property, and cultivates a positive rental experience between you and your tenants.