By Stuart Nance
Renting out commercial or residential property is always a risk. The only way to earn a reasonable profit on your holdings is to rent them, but the property is worth much more than the rental cost. If a tenant treats your property poorly or fails to pay rent, you can be tied up for months if not years dealing with the damage. Some items can tie you up in court dealing with the legal ramifications of missed rents, while others can be a matter of escrow, where you wind up paying to get rid of a the tenant. Running a rental background check can help you avoid a multitude of problems.
A tenant can send their rental payments to escrow, in order to avoid paying you the rent until the matter is handled in litigation. For example, you as the landlord are responsible for much of the property maintenance, but not all of it. If a tenant ruins a carpet it is their responsibility unless the carpet is old enough to warrant replacement anyway. However, once the carpet is ruined, you may need to go to court to prove that the carpet does not need to be replaced as part of normal wear and tear. You may need to provide copies of receipts for when the carpet was installed and statements about the durability and expected life of the carpet, all in order to collect the rental funds that rightfully belong to you anyway. A rental background check can help expose those who make a habit of these kinds of litigation.
A rental background check can include so much more than a simple credit report. While a credit report is an important part of the total rental background check, alone it does not provide nearly enough information. A rental background check needs to include: address verification, for reference checks; litigation history, to avoid those with a history of rent court and eviction; credit check, to ensure they are financially able to make the rental payments; and much more. The added information provided on a rental background check put you in a much better position to determine who you will rent out your property to.
Adding a rental background check as part of your tenant application process is not difficult. There are many companies that offer these services, some of them able to give you instant checks for much of the information, online. Do not wait until after the next bad tenant costs you thousands of dollars; stop the problem before it starts with a rental background check.