Three things to include in a background check for a potential tenant.
If you own a rental property, you know that background checks can feel tedious but are mandatory and crucial. If you are worrying about background checks on your own, what should you include in them? There are so many good things to look for, and you don’t want to miss anything—they can end problems before they even happen! To help you with that, here are the three things we recommend including in a background check:
1. Personal information. This one sounds simple, but it is crucial to get it correct. Ask for their name, social security number, current address, phone number, etc. It’s important to run a credit report on the applicant, and it’s up to you what you want your minimum to be. No matter what you choose, this will help you understand their financial status and check for possible fraud, large amounts of debt, missed payments, etc. Lastly, make sure you look at their criminal records. Again, you get to decide what you’ll allow; just remember that you risk getting in trouble if a crime happens on your property, so be careful to avoid that as much as possible.
2. Rental history. It’s good to know if an applicant has been evicted before, as evictions can be very expensive for the landlord. Also, we recommend asking for references from past residences. Then you can ask their previous landlords if they left the place in good condition, made payments on time, got along well with their neighbors, were easy to communicate with, and more.
"These things will help you determine what kind of resident this applicant will likely be."
3. Payment ability. You want to make sure the applicant can make their payments to you. Look into their employment records and if they currently have a job. Then you can check their rent-to-income ratio. Different landlords have different requirements, so it’s up to you to decide what you want that percentage to be. However, if their entire monthly income would be as much as their rent payment, this would not be a great tenant.
A lot of these things are up to your discretion, but they’re important to help you determine what kind of resident this applicant will likely be. Just make sure to pay attention to Fair Housing Laws. Also, give them a chance to explain something on their record. Maybe there were extenuating circumstances. Either way, this will also help you avoid legal trouble with various laws and guidelines.
This is all a lot of work and has a lot of room for error, so we recommend handing this over to a professional. If you want help with legal issues, background checks, and tenant screenings, don’t hesitate to reach out! Call or email us anytime, as we would love to work with you.