Rental Background Checks – A few good words of advice

If you are managing a rental property, a substandard tenant will certainly be more painful than a rental vacancy.

Income property vandalism, tardy rent checks and legal implications, are just the beginning headaches and high cost hassles that arise from renting to just one bad tenant. If you happen to own a multi-unit rental property, you can add to the equation the loss of established, always on time paying renters. The good news is that most can be avoided by having a rental background check policy in place that will help you distinguish and select good tenants from bad tenants.

You may want to consider making an effort and dedicate some of your valuable time to elaborate a comprehensive tenant screening process. As a rule of thumb in whatever you do, put it in writing, and entail everything that you require of every rental applicant. This thorough “filtering” process is initially based on an descriptive rental-lease application. You may want to ask questions such as:

• What happened in their last rental that they are looking to move out?
• Do ask about their job and probable continuation of employment
• Who will be responsible for paying rent in the event of job loss
• Bank account information where rental funds will be paid from
• Personal habits (i.e, smoking, pets, other persons who may share rental even on a temporary basis)
• Any ongoing civil litigation?
• Past criminal records? This question itself serves two purposes. First, it defines what the applicant is capable of (You must use your gut feeling here as to the severity of any past criminal offenses as many of “good people” have had mistakes in their past) and secondly, test their honesty and integrity.
• Can they provide references as to their character? – This itself may be the pivotal point of you making the right decision. We feel inclined to mention once again the word “gut feeling”.

You may also want to include a sub-leasing clause in your rental agreement to avoid a potentially bad tenant renting from your good tenant in the event he/she decides to move on.

Take your time and think about all the different scenarios you want to avoid. Doing so, will also act as a selling point for a good tenant to rent from you knowing you run a “tight ship” as that prospective tenant will have the peace of mind that you will not rent the next door apartment to just anybody who can cough up three months funds to move in.

Become familiar with Federal Housing Laws.

Federal housing laws exist to safeguard tenants from discriminatory rejection by landlords. For example, you cannot ask questions about race, gender, age, relationship gender preference or religion. Do become more familiar with those laws when assembling your rental agreement. You can learn more at the HUD Fair Housing Laws website. After you prepare a rental agreement draft, we cannot stress how paramount it is to have an attorney review it.

One final piece of advice.

Don’t be deceived by heartbreaking stories or someone who knows how to use their charm. In other words, don’t be so impressed or taken aback by someone that leads you to disregard your rental background screening process. There are many “nice” troublesome people who have left others holding the bag. Rental screening is a disciplinary science that should be combined with your own instincts. Just remember, information is gold!

Source: background-checks-systems