Landlords include background checking renters in their interview processes to protect themselves. Landlords like yourself thoroughly background check renters so that they can avoid dealing with bad tenants in the future. Unfortunately, landlord insurance cannot protect you from the stress bad tenants can cause. A background check should include the necessary information to make an informed decision on the approval of a tenant. This typically includes credit reports, criminal records, financial information, and past renting experience. There is an enormous amount of information to check while screening a tenant, and this article will explain the steps needed to obtain that knowledge to make an informed decision.
Create a rental application to have your tenant give you their basic information. The application should include the prospective tenant’s full name, date of birth, contact information, driver’s license information, (or another relevant form of ID) social security number, and financial information. Important financial information needed would be income, employment history, banking and credit references. Additionally, having three personal references necessary for the application can help give you additional knowledge on the applicant. Adopt this technique to allow the prospective renter to provide their information that you will use to complete the background check process.
In Person Interview
Additionally, conduct interviews for your tenants to help establish the landlord-tenant relationship that will be necessary going forward. This is also a great time to ask questions that will help you seek out any red flags and establish any rules you may have for the property. Good questions to ask include: “Why are you moving?”, “How frequently are guests going to come over and spend the night?” and “What is your schedule like?”. Additionally, it is imperative to ensure that the applicant can pay the first month’s rent and security deposit. Take a look at their ability to financial plan and build a good credit score. The answers you are looking for may vary depending on the nature of the property. However, it is important to understand how the tenant plans to use the property in the future. This practice will help facilitate communications with the tenant for an additional inquiries regarding the screening process.
Tenant Screening Services
As a landlord, you have the right to conduct screenings and checks on your applicants. In doing so, you minimize the risk involved with renting. There are many different companies that offer background checking services to landlords. Information such as annual credit reports, criminal records, foreclosures, evictions, and employment histories are services to look for in a screening company. In the event of something surfacing from using one of these services, send the prospective renter a copy of the information from the screening. This will allow you and the renter to discuss the context of the offenses to help with your decision.
Use the history of the renter provided in the application, interview, or background check to your advantage. You can use it to contact the past employers, landlords, and personal references of the renter. The information from these contacts will help determine the financial, property, and personal responsibility of your respective tenant. Ask the employer to verify the income of your renter to ensure that they will be able to afford the property. A good rule of thumb to follow is that your tenant’s gross monthly income should be three times the amount you will be charging for renting. Contact previous landlords and personal references to help establish the liability of your tenant. This will help determine if ultimately they can be trusted with the property.
To summarize, understanding background checks is a key part to being a successful landlord. Taking advantage of resources provided by the renter on an application is useful to understanding the responsibility of your tenants. Use interviews as a way to clarify any details about the property and the renter’s intentions. It is crucial to exercise the right to use screening services to verify and find information regarding your renter. Finally, contacting any references such as employers and previous landlords are useful towards drawing conclusions on the responsibility of your tenants, financial or otherwise. Apply all of these methods in conjunction to allow you to paint a clear picture of who your renter is and if they will meet up to your standards. These methods will reduce the overall stress involved with the entire process and help you make informed decisions when picking tenants for your property.