Do I Need to Conduct a Background Check On My Potential Tenant? If So, How?

tenantriskverification March 15, 2012 1

When it comes to tenant screening, a landlord or property manager cannot be too cautious. Potential tenants need to be screened in order to protect yourself, your assets, your property, and—perhaps most of all—your reputation. There are a variety of potential pitfalls when it comes to new tenants; it is best that you perform a thorough background check.

In fact, it is an extremely good investment to do full tenant screening checks. For as little as fifteen to twenty dollars, you can get a tenant screening that checks for a tenant’s past evictions, as well as bankruptcies, judgments, and liens. You can also check a possible tenant’s credit history, where he’s lived in the past, as well as his criminal record.

Some tenant screenings go so far as to check against the Department of Homeland Defense’s known terrorist list.

A potential tenant’s history can tip off a few things about him. Perhaps he was evicted before. While an eviction may not necessarily disqualify a tenant from signing a rental agreement with you, it does offer some visibility into the tenant’s past that may tip off other risks that may not be entirely obvious.  Maybe he has a criminal record or is a known sexual offender.

These are all things you should know before you sign a rental agreement or lease with a potential new tenant.

A bankruptcy can signify a tenant who may indeed not be able to pay his bills, including his rent or lease payment. You are entitled to know the risks you are about to consider taking on. It is a good practice to ask potential new tenants where they have lived in the past. Finding out if the tenant has moved from place to place as leases expire is something you ought to know.

Now, some of these screens you can do for yourself. However, the vast majority of tenant screenings are able to be done faster, cheaper, and more thoroughly by an outside service.

Such services have specialized tools that they can use to perform these checks expeditiously. In fact, if you had to go down to the local courthouse to check on a person’s background, one screen might cost you $12 and 2 hours of your time.

A tenant screening service could possibly do the work in half the time and cost!

Of course, credit checks are so ubiquitous and easy to perform that you simply have to place an order with a credit reporting agency to find—within minutes—whether your potential tenant has a good credit history.

Again, if a tenant’s credit score is low, that does not necessarily rule him out as one of your soon-to-be tenants. It simply gives you the information you need to know in order to make a sound, risk-based and risk-mitigated decision. If all else is equal between two tenants, yet one potential new resident has a FICO of 700 while the other has one near 600, then you have the information you need to make a choice.

Tenant screening checks are of the utmost importance. Knowing the background of the person to which you may be renting is simple, fast, and quite inexpensive nowadays.

source : fidelisam

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