Imagine finally finding a tenant for one of your rental properties after weeks of searching. Although they seem reliable on the surface, they end up causing a substantial amount of damage to your home.
They're also involved in illegal activity, making their presence an enormous liability. Within weeks, your passive income stream is disrupted.
To avoid issues with tenant reliability, it's crucial to conduct a proper tenant background check. However, not everyone understands how to navigate the process without encountering issues. Let's explore the most important information you need to keep in mind so you can handle this obligation fluidly.
How It Works
The process is a bit more complicated than most people anticipate. First, you'll need to obtain written consent from the potential tenant.
This can either be part of the rental application or provided as a separate form. You can then gather the necessary information, such as their Social Security number, driver's license number, date of birth, name, rental history, and criminal history. The more information you collect, the more effective the background check on the tenant will be.
You'll then need to choose a screening service to help you complete the background check. It's worth noting that you might need to run a credit check separately depending on the service provider you work with.
Issues It Prevents
One of the most important issues tenant background checks prevent is missed payments. When you assess someone's financial reliability beforehand, you minimize the chance they can't/won't pay rent on time.
Another problem you can circumvent is property damage. People with previous evictions or poor rental histories are more likely to cause damage to your property.
This is often due to destructive behavior or negligence. The last thing you want is to cause issues with safety and security.
There's also something to be said about keeping dangerous individuals out of the neighborhood. Registered sex offenders and people on the national terrorist watch list can cause problems for other people in the community with their presence.
Some service providers include a risk score for potential applicants. This can be used as an index of how dangerous or unreliable the tenant could be if you choose to rent to them. Be sure to assess their common courtesy when you meet with them, as well.
Choosing a Professional
Before choosing a screening service, you'll need to research their past reputation. See what other people have to say about the results they got. Pricing is another factor to consider, as you'll often get what you pay for.
If they offer rock-bottom prices, this could be a sign they won't meet your quality standards. Are they easy to communicate with? Continue your search until you find someone enthusiastic about working with you.
Never Neglect a Tenant Background Check
If you don't run a tenant background check before renting to tenants, you risk encountering a large number of issues you would've otherwise avoided. The tips in this guide will ensure you navigate this process quickly and legally.
All American Realty and Investment Group is a full-service real estate brokerage management company. We pride ourselves on delivering fast results without sacrificing quality. You'll learn more about how we can help when you get in touch with us today.