When you own real estate properties, you can either sell it at a higher price after fixing it up or you can rent it out to tenants. Should you decide to go for the latter, there is one very important thing that you must consider – screening tenants properly. You don’t just shake hands with future tenants and let them stay in your properties.
Without proper tenant screening procedures, you might end up with tenants who are not paying on time, have evictions in the past or could potentially vandalize or damage your property or that of your neighbors. If you have a residential building that you are renting to several tenants, this is something that you want to avoid. As the landlord, you are liable to ensure the safety of everyone living in your properties. Hence, you should be mindful of new tenants and their background. It is essential to conduct a criminal background check. Be sure to include a sex offender check if your property is near a school or play ground. There have been horror stories of properties being used to manufacture and sell drugs so proceed with caution if you see a drug related criminal background. This is important information that is not difficult to obtain if you select the right tenant screening agency. What you have to do is to prepare application forms with a clear disclaimer authorizing a credit and criminal background check. You should also ask for a few verification documents, such as copy of driver’s license, pay stub, etc. On the internet, you can find many tips and guidelines that you can use for your tenant screening needs. Here are some of the things that you can try or take note to help you get through screening activities like tenant credit check, criminal and professional background check, etc. The Tips and Tricks of Tenant Screening
The first thing that you can do to make it easy for you to screen tenants is to draft a rental application form. You can also do some online research to find free downloadable forms. This should include personal details of the tenant along with financial and professional background information. Be sure to consult the FCRA and you local fair housing laws to ensure that you are in compliance with local and federal laws. If possible, have your attorney review your disclaimer/authorization statement to ensure that you are protected from any potential lawsuits. When conducting background or tenant credit check, make sure to be thorough; do not rush or skip steps. Credit and background checks for tenant screening won’t take too much of your time. It is better to be safe than sorry so please do not rush. Besides, you might skip important details if you are rushing to make a decision. It is also advisable to call the former landlords of your applicants. The pattern of the person’s payments in his/her former apartment or house could speak to how he/she will fare in yours. Also, this will let you know of any eviction incidents. You can’t be sure that your applicants will always provide contact information to previous landlord-especially is they know they had a negative history there. For this reason, it is always smart to do and eviction history report to uncover anything the applicant may be trying to hide. Now, when evaluating your tenant and tenant screening results, you should set a scoring system. However, keep in mind that this must be objective and must be used uniformly to score all applicants fairly.
A good starting point is to set minimum requirements. For example, there should be a minimum income requirement and a minimum score when it comes to credit ratings. Again, these minimums must hold the same for all applicants. You do not want to be accused of discrimination. It is good practice to have your scoring system written or typed out ahead of time-this way applicant will know what you are looking for even before they apply. Another important thing to investigate when doing tenant screening and tenant credit check is to check for employment history. Consider the length of time that he or she has spent in each of his/her companies. This could be an indicator of whether the person will have stable income in the future or if you will lose a few months’ rent while he/she is job hunting.
This article originally appeared on ctcredit
