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With more people looking for rentals than ever before, the tenant pool is huge with more than 44 million American households as renters.
As a property owner, this means that there is probably nothing more important than thoroughly screening the people you rent your home to.
If you've yet to perform your first tenant background check, here's what you need to know.
Top Tips for Conducting a Tenant Background Check
So, why is a background check so vital for landlords? Other than being one of the best ways to get to know your tenants a little better, background checks serve the following purpose:
- They offer vital insight into tenant rental history
- They give you an idea of how reliable a potential tenant might be
- You can learn about any criminal history (if any)
- They offer information on a tenant's financial history and whether they can meet rental payments
All in all, background check services help you understand and mitigate risk as a landlord by renting to the right type of tenant.
It's important to note that there are privacy laws you must adhere to as a landlord. This makes for a fair and transparent rental process. Here are a few tenant screening tips to stick to:
1. A Renter Credit Report
When running a credit check on a potential tenant you must always obtain written consent from the individual beforehand.
Make sure you only collect relevant information solely to assess the tenant's ability to meet rental payments.
2. Criminal Background Checks
The scope of a criminal background check is important. As a landlord, it's up to you to gather only the relevant information you need to make a measured decision about a tenant.
For example, minor offenses committed many years ago might not be relevant to their tenancy now. However, a history of violent crime will always remain relevant.
It's also a good idea to give tenants a chance to explain any negative findings before you make a decision.
3. Ask for References
An important part of the tenant verification process is researching a renter's employment history and rental history. This is where previous references come in handy.
Take the time to contact previous landlords and verify what they're like as tenants, how promptly they made payments, and how they cared for the property.
Don't forget to ask for verification of employment, too. This is important in ensuring tenants have a consistent form of income so they can meet rental payments.
4. Use Standardized Screening and Know the Local Laws
It's imperative that the same screening standards apply to all applicants. This is the best way to ensure your tenant screening remains transparent and fair (and you also remain legally compliant at all times).
Keep a thorough record of each tenant screening, including consent forms, application forms, references, background checks, employment verification, and rental history.
It's up to you, as a landlord, to ensure you stay abreast of all local laws and regulations regarding tenant screening. This is to ensure you avoid discrimination and any incriminating access to information.
Need Professional Assistance with Tenant Screening?
We understand that being a landlord and property owner comes with its fair share of stress. If you're a first-time landlord and need help conducting a tenant background check that's fair (and legal), we are here to guide you!
Our team at PMI Bridgetown, Portland, offers a full suite of property management services, including efficient, no-fuss tenant screening. Learn more here.
