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.

How to Protect Your Rental Property Investment

Purchasing, improving, and managing a rental property, no matter how large or small, is a big job. It's a large upfront investment, and it takes time, energy, and money to protect and maintain it. From the beginning, you want to make sure you're making wise choices as a business owner and rental property owner, and that begins with setting goals and taking steps to achieve them. Here are our top four ways to protect your rental property investment.

Get the Right Insurance

Homeowner's insurance, renter's insurance, and landlord's insurance are all very different, but so are the different policies and plans within each type of insurance coverage. Talk to a trusted insurance broker or agent to ensure that you have the right coverage for your specific type of rental property and whatever needs come along with your property. Also decide if you'll require renters to carry their own renter's insurance policy and what you will require from them in that. Whether you're renting out a single home for long-term or short-term, or if you own a multi-unit rental property, your needs will vary and your insurance should meet those needs.

Focus on Safety

Safety is huge in any rental property--both for you and for your tenants. There are legal requirements regarding repairing and maintaining the physical space of your rental properties, but it's even better to go above and beyond to ensure it is as safe as possible. This includes the physical structure of your property, as well as the grounds and surrounding areas. One way to maintain a focus on safety is to reduce the likelihood of crime by improving security and screening your tenants for criminal backgrounds. It is one thing to improve security against outsiders, but you welcome a whole new level of security challenges when you allow someone with a criminal history to reside in your rental property.

Be Prepared for Emergencies

In the event of a natural disaster, severe storm, or another unexpected emergency, you want to ensure that your tenants and physical property are both safe and secure. Prepare your tenants and property for unexpected events by having evacuation and emergency plans in place and posted (if possible and applicable). Make sure tenants know where fire extinguishers and utility shut-offs are, and be prepared with extra flashlights, batteries, space heaters or fans, and even generators. If an emergency does occur, you want to keep everyone and everything safe while still maintaining and running your business efficiently, so put whatever you need to into place in advance so you are prepared for anything.

Be Smart with Your Business Practices

Making wise business decisions and being consistent in your business practices is key to not only the success of your business, but also in maintaining your investment in your rental property. Create and enforce rules evenly across all properties, tenants, employees, residents, and so on. Always have tenants fill out an application and make sure you're screening every individual who will reside on your property, even if they are a family friend, relative, or acquaintance of any kind. You don't need to sacrifice business practices and tenant quality in any situation, so make sure you're being as smart as possible with every decision you make.

What Shows up on a Background Check for an Apartment?

When running a background check on a potential tenant, the report will give detailed personal information about the applicant. A background check pulls information from public records to confirm the applicant's identity and provide a clearer picture of their residential, employment, and financial history. Tenant Background Search offers a fast and easy online service to address any landlord's needs in assessing a potential tenant.

A person's residential history can provide you with a better understanding of where the person has lived in the past and how long they typically reside in one location before moving to the next. This is helpful for landlords looking to find tenants who are interested in specific short- or long-term rental options and ensure the property is the right fit for the applicant's needs. It is also helpful to have an understanding of a person's rental history, whether they have experience renting in the past, for how long, and whether or not they made payments on time. Additionally, it is incredibly important to know if the applicant has a history of property damage or destruction, disturbing other tenants, or even a history of eviction.

A background check can also help verify the accuracy of the applicant's employment information listed on their application. It is important as a landlord to have an accurate understanding of the potential tenant's expected income for the duration of the lease, and an employment history can shed light on how long the applicant has been employed and their current salary. An application and background check may also provide additional employment-related information to help the landlord determine the tenant's rent to income ratio, helping ensure the potential tenant will be able to afford the rent and other living expenses. If you have a minimum income requirement, the background check report is the most accurate representation of the applicant's income and you can check this information here.

Other information regarding a potential tenant's financial history may prove to be important in the background search. Tenant Background Search offers various levels of packages, with the standard package offering a background check, the standard plus package offering a background and credit check, and the comprehensive package also including a history of eviction report. When reviewing a potential tenant's credit report information, you will see their credit score, which is made up of a variety of important factors such as their payment history, their credit card utilization, and their credit availability.

Finally, a Tenant Background Search report will also include information on the applicant regarding any criminal records, such as any misdemeanors or felonies, and whether or not the future tenant is on the sex offender registry. It is important to understand the state and local laws regarding what information in a criminal record you may use to base your decision on an applicant. In general, the idea of reviewing an applicant's criminal record is to help you determine whether or not the applicant would be a good renter for your property. Use Tenant Background Search services for all your background checks and credit checks in order to help you identify the best tenants for your property.

How to Screen Tenants

The screening process for potential tenants can seem overwhelming, but there are practical steps one can take to help identify quality future tenants and also potential tenants to avoid. Tenant Background Search understands the importance of finding responsible, reliable tenants for your property and offers three levels of comprehensive reporting to ensure you have all the information you need to make the best decision for you and your property. The following are 5 steps for how to best screen tenants:

Step 1: Meet the Applicant

While in-person meetings may not always be feasible, it can be so helpful when possible to learn more about the applicant and begin the application process together. When you are able to meet a potential tenant in person, the unofficial screening can begin. Find out what has them on the market for a new rental opportunity and what they did or did not like about their previous rental experiences. This can help you get a better understanding of what the potential tenant is looking for in a property, while also getting to know them a bit better. You may ask what brings the tenant to the area and whether they have long-term plans to stay in the area. While this information is unofficial, it often helps put your mind at ease through the rest of the steps.

Step 2: Review the Application

A standard rental application will request the applicant's full name, date of birth, social security number, driver's license, or another form of identification, and residential address history for at least two years prior. You will likely want to include other information in the application as well, such as proof of employment and proof of income. Included in the application or in addition to the application, you will want to collect the applicant's permission to run a background and credit check so you can thoroughly screen the potential tenant.

Step 3: Run Tenant Background Search

A background check and credit check on potential tenants are incredibly important to screening tenants for everything from any criminal history to their ability to pay the rent. Tenant Background Search offers online services for background, credit check, and additional reporting and provides comprehensive reports for review. Tenant Background Search is proud to offer quality services with a range of price options. The basic package offers a background check, while the plus package offers both a background check and credit check. The comprehensive check also includes an eviction report. The service is easy to use, the results are fast, and there are customer service representatives available 24/7 to address any and all questions or concerns.

Step 4: Review the Report

When reviewing a potential tenant's background and credit check, it is important to verify the identity of the applicant and understand the objectives and outcomes for both reports. The background check provides you as the landlord with information on the applicant's criminal history and personal history, while the credit check offers a financial summary and how the potential tenant handles debt. Reviewing a financial summary of the applicant can help demonstrate whether or not they have a history of on-time payments, their credit card utilization and credit score, and verification of their income. Public records of any evictions and bankruptcies are also helpful. Tenant Background Search provides simple yet thorough reports so you can easily get a greater understanding of the viability of the potential tenant.

How to Run a Credit Check

As a landlord, you understand the importance of finding responsible tenants who will pay their rent on time. Running a credit check on potential tenants is a great way to review their credit history and get a better understanding of how they manage their money. Learning how a potential tenant pays their debts is a strong indicator of how they will treat their lease payments. Here are 4 steps to running a successful credit check:

Step 1: Review Rental Application

It is common practice for potential tenants to submit some type of rental application to demonstrate interest in the property. A standard rental application generally requires the future tenant to supply their full legal name, date of birth, and social security number. It is equally important to require the tenant to provide their previous residential addresses for at least two years and contact information for a current landlord or leasing company.

Step 2: Interview Applicant for Additional Information

While not all potential tenants are able to meet in person prior to completing a rental application, many landlords find it helpful to learn additional information with someone who will be living on your property. You may find it helpful to know more about why they are interested in moving to your location, what they liked and disliked about their previous rental experiences, and what they are most looking forward to with your property. Whether this information is communicated in person or in a more extensive application, it can help you determine whether this person is the right fit to move forward with the credit check process.

Step 3: Collect Payment and Authorization for Credit Check

In order to run a credit check, you must notify the potential tenant and have them complete a form to authorize you to run the credit check. Many landlords include this paperwork in the rental application. When it comes to covering the credit check fee, landlords may choose to include the standard credit check fee in with the rental application payment, an administrative fee, or request payment directly from the tenant.

Step 4: Use Tenant Background Check Services

Upon receiving authorization, a landlord can submit a future tenant for a credit check with Tenant Background Search. Tenant Background Check offers three screening packages: the basic package includes a background check, the plus package also includes a credit report, and the comprehensive package also includes an eviction report. Regardless of the package you select, all services will be completed online and you will receive a detailed report almost instantly.

Tenant Background Search partners with multiple data warehouses to provide you with an accurate report and utilizes a secure and encrypted process to guarantee privacy for all parties. Our highly experienced staff are able to provide quality customer service and support throughout the entire process. Whether you are an individual property owner or are managing a commercial property, Tenant Background Check Services provides you with the information you need in a safe and timely manner so you can be confident in the tenants approved for your rental properties.

How to do a Background Check

When it comes to running a background check on a potential tenant, the process is made very simple and safe with Tenant Background Search. The basic Tenant Background Search package includes a background check, while the plus and comprehensive packages also include additional information such as a credit check and eviction history. Whether or not you choose to receive those additional services, know that you can trust Tenant Background Search for a thorough background check regardless of what package you choose. Here are five steps for conducting a background check:

Step 1: Collect Rental Application

A standard rental application requests that the tenant submit the basic information that is used when later submitting a background check request. This includes the potential tenant's full name, date of birth, social security number, and previous addresses for at least two years. Landlords and leasing agencies may customize rental applications to include additional information such as a driver's license number or another type of certified identification to further verify the identity of the applicant. Other information to request will likely include income history, employment verification, and references.

Step 2: Request Permission to Run Background Check

Landlords are required to request permission before running a credit check on an applicant, which also typically includes a background check. While landlords often have experience and understanding of the background check process, it can be helpful to explain to the tenant what type of information will be collected. A background check is typically used to verify the applicant's identity and investigate public records of criminal history and character.

Step 3: Use Tenant Background Search

Tenant Background Search offers affordable background searches that are easy to complete and offer fast results. These services offer a comprehensive background check report so you can have peace of mind in selecting responsible tenants. The package types and online system make background screenings fast, easy, and take the stress out of the process for you as the landlord. Tenant Background Search package options are all affordable. We recommend landlords include the background check fee in the application or administrative fees paid for by the tenant as part of the application process.

Step 4: Contact References

A background check does a thorough review of a person's personal and criminal history, with data sets and information of record to help provide you with a comprehensive picture of the potential tenant. However, you may also want to contact references to verify any information. Options for references can be listed on the rental application and may include the current employer, current or past landlords, and personal references supplied. The current employer can verify the applicant's employment, while personal references may address the character and reliability of the potential tenant. Perhaps most importantly, current or former landlords can speak to whether rent was paid on time, whether any property damage occurred or complaints were received about the tenant, and more.

Trust Tenant Background Search for safe, swift, and secure background searches so you can always select the most reliable tenants for your property.

How to Check Someone's Credit

Before you approve a potential tenant's rental application, it's important that you do a complete credit check on the applicant. Tenant Background Search offers an easy online option for running a background and credit check so you can verify their identity and confirm they are a suitable renter for your property. Here are 5 steps to checking someone's credit:

Step 1: Meet with Potential Tenant

While many people are looking for the best place to rent, you as the landlord are also looking for the best candidate to be a tenant on your property. Meeting in person is a great way to get the conversation started about what the potential tenant is looking for in a rental property and why they may have chosen to leave another rental opportunity. Additionally, an informal introductory conversation can tell you a lot about a future tenant, from where they work, to their lifestyle interests, to how many friends or family they plan to live with. All these factors affect whether or not a tenant is the right fit for your property.

Step 2: Review the Application

Whether or not you are able to meet in person, it is helpful to have a conversation with a potential tenant before the application process begins. That personal connection can help when they have questions or help you feel more comfortable in asking all the right questions. The application should include the potential tenant's basic information, such as their full name, date of birth, employment history, and living history for at least two years. You may also want to request proof of employment and proof of income, as well as contact information for their most recent rental experience.

Step 3: Request a Credit Check

Part of the application process should include an explanation of the credit check and what type of information you as the landlord are looking for. You will need to seek permission from the applicant before running a background or credit check. Once you receive their permission, use a service like Tenant Background Search to meet all your needs.

Step 4: Credit Check with Tenant Services

Tenant Background Search is a comprehensive screening tool for landlords to easily check someone's credit and receive a report fast. The service is reliable and user-friendly, with no hidden fees or extra hoops to jump through. The process is simple and straightforward, and there are customer service representatives available 24/7 to address any questions or concerns you may have during the process.

Step 5: Review the Report

An accurate and affordable report from Tenant Background Search Standard Plus Tenant Screening package includes a credit report with Fico score, information on the tenant's history of bankruptcies, foreclosures, collections, and other financial information. This information is obviously sensitive, and you can rely on Tenant Background Search to provide a safe and secure service. The comprehensive report offers a thorough assessment of the applicant and helps you assess the feasibility of the applicant as a potential tenant for your property.

Red Flags During Tenant Background Checks

Property Managers and landlords typically understand the importance of having a background check process for potential tenants. Proper background screenings can help to ensure your property is safe, well maintained, and desirable; it can also save money in the long run by ensuring you don't lease to someone without solid financials. Many of these problems can be easily spotted during a routine screening. For example, a tenant with very poor credit or a criminal history may give you immediate pause. Eviction history is also a common warning sign that a tenant is not a good fit for a property. But even before sending off for credit and criminal history, the process of screening can begin. You can take careful notice of behaviors and reactions to gauge if somebody is the optimal tenant starting from your first interaction. Look out for behaviors like the following.

First Contact

When responding to your vacancy ad, a potential tenant should follow any instructions given and know the basic information you provided. If you post a 2 bedroom and ask for email inquiries, and someone calls you to ask about a 3 bedroom, there is already a disconnect there. The worst-case scenario is often somebody showing up and disturbing current tenants in an order to gather information. An applicant who starts off badly may not be worth further conversations.

Application Etiquette

Any qualified tenant understands that an application is part of the process and should be prepared to fill one out. If they do have concerns about what may show up on their background check, they should share those with you beforehand rather than attempt to hide the information. If an applicant pushes back on the required paperwork, there is already a chance something is askew. Once they do fill out an application, it should be treated seriously and professionally. Lots of blank spaces or errors may be simple negligence, but can also be at attempt to mislead you with false information.

References

Many people are looking to move out after living with family members, and no one should be written off for listing family members as references. However, if these are the only references they can provide or their additional references do not seem legitimate, this could be cause for concern. Family members are sometimes listed to avoid landlord contact, so you should reach out to them and treat the family member like a landlord. Ask all the questions you typically would to gauge if this person truly lived with the family member or not.

Rental History

While eviction history is an obvious worry, you may see other aspects of a tenant's history that can be concerning. If somebody moves often within the same city, you may want to dig into this further. This can indicate someone who is moving out to avoid evictions or is perhaps a difficult tenant. More than 3 addresses in the previous 5 years is usually enough to raise eyebrows during the application process and should lead to further questioning.

There are numerous things that can arise during the tenant background check process, but make sure to always comply with fair housing laws and provide legitimate reasons for rejecting applicants. These guidelines provide a starting point in determining when a tenant is not fit for your vacancy.

Additions to Your Lease Agreement That Might Have Positive Effects On Your Tenant Screening Process

The job of a landlord can be complicated and arduous at times, particularly when there are holes in their screening process for finding quality tenants. Many landlords are motivated by the promise of profit and good investment, but inexperienced in the discipline of screening tenants effectively and having confirmed tenants agree to reasonable terms in their lease agreement. It is our aim at Tenant Background Search to provide the tools to prevent mishaps before they have a chance to damage your community or property for good. If prevention isn't possible, it is at least wise of us to learn from the experiences of others and not pay the "stupid tax."

Establish Timelines for Landlord Entry - Inspections of rental properties are an excellent idea because they can provide a layer of transparency that helps prevent damage to your property and other issues from occurring. These inspections should be outlined in the lease agreement from the onset of your relationship with your tenant. This clarity provision can create an environment in which you as a landlord see the lowest property damages possible because of your involvement. That being said, it is important that other instances that would require landlord entry be outlined as well. In general, tenants should be given 24 hours notice before they can expect to see their landlord or contract workers in their unit or property. The only exception provided for is in the event of an emergency scenario or in the case of a tenant asking to see the landlord on his or her own timeline.

Consider a Reporting Policy for Rent Payments - Newer technology allows landlords to report on-time rent payments to credit bureaus. This is a very helpful tool for both the landlord and the tenant... provided that payments are actually made on time and in full. The landlord can utilize this reporting policy to enforce on-time payments and decrease the burden on their shoulders of hunting down checks from tenants. Knowing that the payments will be reported each month without exception is a strong motivator for tenants to be on time. Tenants will also enjoy the credit benefits of being reported on so often as a positive tenant. Renters don't often enjoy the same benefits as homeowners, but in this case, they can enjoy similar perks.

Guest Policy and Subletting Rules - It is key to establish a guest policy and subletting rules from the beginning of a lease agreement. Guests that are either unwanted or unscreened can really pose a problem to landlords, as well as other tenants. If a guest is going to reside on your property for an extended period of time, they should go through a similar screening process to your tenants who are actually on the lease agreement for the place. Additionally, the potential for sublet conflicts should be headed off and addressed with a policy in the lease agreement. Vacation rentals, such as Airbnb and VRBO should be addressed in this section as well.

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