Why Every Landlord Should Conduct a Tenant Background Check
Background checks are becoming common practice for many employers. Available to individuals, it’s also recommended that you perform background checks for nannies. Property owners should also invest in background checks on their potential tenants. It’s a small expense that can spare a great deal of misery, damage and liability down the road.
Avoid Expensive Damages
Part of a background check includes talking to former landlords. Unfortunately, you cannot count on applicants to list rentals where they caused expensive damages. Professional background companies will work around this problem by using credit reports. You can call the owners of properties listed as residences on the report to cover those the potential tenant neglected to list. It’s better to discover that a tenant has a habit of damaging property before you agree to a lease and supply them with keys to the property.
When a tenant damages a residence, the property owner may have to file a judgment to receive payment. This information will be in the credit report, allowing you to avoid renting to someone who won’t be respectful of the property. Unpaid judgments for damages are particularly troublesome, but you can uncover this information by reviewing their credit report.
Eliminate Unstable Tenants
Someone who moves around every few months isn’t an ideal candidate. Their habit of moving means that you could face the expense of renewing your tenant search again. Applicants can try to hide their tendency to get frustrated and move by not listing addresses on their application, but the information will appear through the background investigation.
Receive Rent Payments on Time
As a landlord, you want to know that the rent will arrive on time and in the full amount. You want to rent to people who can afford the property, and you can find that information by reviewing their credit history. You want to eliminate candidates who are overextended on credit and people who are at risk for filing bankruptcy.
Safety and Security
Criminal background checks are also important when you rent a property. You can make your property safer and help avoid thefts by eliminating tenants with criminal records. Not only will your property be safer, but you will also limit your liability if your tenant should break the law and harm someone. Even though you cannot control your tenant, you can eliminate your potential liability by taking every measure possible to ensure you do not rent to someone who is dangerous.
Avoid Frivolous Lawsuits
Background checks will uncover all lawsuits in which your applicant has been involved. This is important for uncovering if a former property owner had to go through the courts for missed rent payments, damages or other charges. However, it’s also good for discovering if your potential tenant has a habit of filing frivolous lawsuits. You can avoid a great deal of stress and drama by eliminating applicants who are looking for an easy payday with phony injury claims and other fraudulent lawsuits.
Increase Profits
Evictions are expensive. There are legal papers to file, timetables to comply with and a mountain of paperwork to fill out. While you may successfully remove the tenant from your property, you will almost always lose money in the process. Background checks can help you avoid evictions by screening out people who cannot afford the property, won’t respect it or will cause problems in other ways. It’s an investment in your rental property business that will increase profits in the end.
Landlords should take the time to put every tenant through a thorough background check. In addition to looking at the credit report and talking to past property owners, it’s also important to check criminal records, court records and even driving records. It will help you safeguard your property and avoid expensive damages. It will help you keep your property safe and secure. Making the investment in a background check will help you increase profits by avoiding evictions.
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