How Tenant Background Checks Can Save You Money

Performing background checks can help you find tenants that are reliable, responsible, and upstanding, which can help you save money in the long run. Tenants who are reliable are more likely to pay their rent on time and a background check can provide you with information about a potential tenant to help you make the best choice for your property. Before establishing a rental agreement with a potential tenant, invest in tenant background checks to help you save time, money, and energy in the process.

When renters are looking for a place to live, there are many aspects of the search that affect their choices, including monthly rental prices and location relative to work, family, and friends. Most of the time, renters want to find a place that feels like home, and you as a landlord want them to treat their home with respect. Similarly, you as a landlord have certain qualifications in mind for the type of renter you want to trust on your property. A thorough rental application should include a tenant background check that allows you to pre-screen candidates and collect additional information that helps you make the best decision.

Tenant background checks provide you with the following information so you can make an informed decision.

Employment History

Perhaps the most important factor in selecting a prospective tenant is whether or not they will be able to make their rent payments. A tenant background check provides landlords with the employment history, which can help inform you of whether or not this person has a reliable and consistent income. An appealing prospective tenant may not have significant gaps of time without employment or a history of frequent job loss. It helps to get a picture of a prospective tenant's current and past employment for a more comprehensive understanding of their financial reliability and responsibility.

Criminal History

A criminal past doesn't need to automatically disqualify someone from a rental agreement, though a tenant background check will provide you with more context so a discussion can be had about any criminal history. There are certain red flags you want to look out for, though, when it comes to criminal record history, especially those that involve money. A criminal history of fraud or tax evasion can be a red flag that this person may not be a reliable tenant or they may not demonstrate the level of fiscal responsibility you are looking for in a future tenant.

Rental History

One of the most helpful ways to find out whether a potential tenant will be a reliable and trustworthy renter is their rental history. A tenant background check will provide you with a detailed rental history, which will show their history of rental agreements, as well as any history of eviction or other red flags that might make you wary, like frequent moves or large gaps in reported residence. A potential tenant who has lived under one rental agreement for a long period of time can be a positive sign that they are able to maintain the requirements of a responsible tenant.

What to Look Out for with Tenant Background Checks

Landlords and property managers usually have a general understanding of why tenant background checks are important. A tenant background check will help you determine the right choice of tenant that will result in reliable rent payments and ensure your property stays well-maintained and safe. Running tenant background checks on potential renters also provides landlords and property managers with a greater understanding of a person's financial and rental history. These types of routine screenings are helpful for identifying any red flags that might signal that this potential tenant would not be a good fit for your rental property. There are other factors to look out for through the rental application process to make sure you find the optimal tenant for your property.

Application Etiquette for Prospective Tenants

The application process is typically very clear and thorough, which gives a prospective tenant a great way to make a first impression by properly completing all the necessary pre-screening information. When you advertise vacancies on your property, a responsible prospective tenant will follow the instructions and supply any requested information through the application process. Additionally, if you post contact information with your advertisement, your first contact with a prospective tenant might even be over the phone or via email.

Prospective tenants recognize that rental applications are part of the process and should do their best to supply all the requested information. When a prospective tenant has concerns about what might show up on a tenant background check, such as any criminal history, they can address that information with the landlord or property manager in an attempt to be open and transparent. If you sense hesitancy in completing the required paperwork, a prospective tenant might be wary of what will be revealed in a tenant background check. Areas left blank or filled out incorrectly could be simple errors, or it could be a red flag that you want to review further.

References for Prospective Tenants

You might request references from prospective tenants as part of your rental application in order to better gauge someone's rental history. However, prospective tenants come from a variety of previous living situations, including living with family members, which can make providing references a tricky business. Family members listed as references isn't a red flag in and of itself, though a prospective tenant may wish to identify family members for their references in an attempt to avoid sharing information from a previous landlord or property manager. That's why a tenant background check can provide you with the necessary rental history and residency information so you can make an informed decision.

Why Rental History Is Important

Reviewing the rental history of a prospective tenant can help you determine whether they have demonstrated a history of responsibly adhering to rental agreements. This can also provide you with any history of evictions, which are an obvious red flag that can be cause for concern. Moving residences every year within the same city might be a sign that someone is moving out to avoid evictions. However, it helps to dig into this information further and have a conversation with the prospective tenant when you have questions or concerns.