Understanding Landlord Security Deposits

One common mistake many landlords make is not learning enough about security deposits. We often think that the process goes like this: name a price suitable to cover potential damages, include the price agreement in the lease, and have the tenant sign the lease and pay the deposit. Once the tenant's lease has ended, assess damages to the property, decide what amount is needed to cover damage expenses, and refund remaining amount to the tenant. The problem in this process lies in the damage withholdings. Many states require landlords to itemize the amounts withheld and do so in a specific timeframe. In these states, any amount of money retained in poor judgment by the landlord can result in penalties against the landlord. Here are a few tips to help landlords with security deposits.


Security Deposit Tip #1:
It is common for a landlord to keep an entire security deposit when a tenant breaks their lease. A landlord feels that it is justifiable to keep the deposit since the tenant did not fulfill the lease agreement. In many cases, this is illegal. A landlord is often required to make multiple attempts at re-renting the property to a new tenant. If the landlord is successful in the attempt to find a new tenant, a pro-rated amount based on the time that has passed should be reimbursed to the tenant who broke his or her lease.


Security Deposit Tip #2:
Any landlord should consider a partially deferred security deposit. A deferred security deposit simply means that a renter is given the option to pay their security deposit in installments over an established timeframe. Typically, the deposit would be collected in three to six monthly payments of the same amount each month. A partially deferred security deposit makes most sense when you have a potential tenant with good credit that lacks the finances to pay a full deposit up front. This can also help the landlord collect a higher deposit by allowing a tenant the freedom to pay in installments.


Security Deposit Tip #3:
A landlord must understand the tenant-landlord laws specific to his or her state. These laws provide clarity pertaining to the rental and residential dwellings and the rights and obligations of the tenant and landlord. These laws will cover maintenance requirements, landlord security deposits, and occupancy and access guidelines. It is in a landlord's interest and protection to know these laws, but they are often difficult to understand. To assist a landlord in comprehending the laws, it is beneficial to find a real estate attorney that is familiar with tenant-landlord laws in your state.


Landlord Security Deposit Tip #4:
Make certain you understand the complexity of the laws pertaining to the following:

• Whether or not the tenant accumulates any interest income on security deposits preserved by the landlord
• Any limitations on amounts that can be charged as a security deposit
• Whether or not a landlord is required to keep security deposits in a trust account until funds are returned to the tenant

It is the best practice to always choose a tenant that you believe will care for your property. It reduces the hassle when your property has limited or no damages and most or all of the tenant security deposit can be returned to the tenant. By processing a tenant screening with Tenant Background Search, you will learn the history of the tenant you are choosing and will have the comfort of knowing you have chosen someone who will be responsible with your property.

The Importance of a Tenant Screening

If you are a landlord or property manager, your primary goal is to protect your investment. Having reliable and responsible tenants is crucial to your own success. Using effective tenant screening helps you find a good tenant who will pay rent consistently on time, not break their lease, and not damage the property. Tenant Background Search is a comprehensive tenant screening solution designed to help you secure your investment. A comprehensive tenant screening will give you a detailed report of the tenant's history, criminal records, credit score, eviction history, and much more. Tenant Background Search will help you lessen potential risk and future liability by giving you the information you need to make an informed decision regarding lining up responsible tenants for your rental properties.

Correct and Current Information to Help You Make the Best Decision
A tenant screening report from Tenant Background Search will provide you with current information on potential tenants. You will be able to verify their identity and credit, and search for a criminal background. By checking an applicant's credit report, you can see what their payment behavior is like. You can find out whether they have a history of on-time or late payments. You can also see the amount of debt they may have that could potentially affect their rent payment each month. Tenant Background Search allows you to identify high-risk tenants before you are faced with costly and stressful situations or evictions. You can also view employment summaries, past address history, and eviction history. The more information you can acquire, the better you can protect your investment by weeding out problem tenants.

By operating a reliable tenant screening process, you will also decrease your chances of being accused of practicing discrimination. If you are using the same fair criteria on all applicants, you are able to base your decision on facts and evidence and therefore avoid discrimination issues.

Tenant Background Search reports are fast, accurate, and affordable. By ordering one of our three tenant screening packages, you can eliminate time-consuming paperwork and procedures that will only slow down the entire application process. We make your job as a landlord or property manager so much easier by quickly getting you the information you need to easily select the right tenant.

Tenant Background Search Offers More Information
Tenant Background Search offers three tenant screening packages so that you are able to choose what best fits your needs and budget. Included in our basic Standard Tenant Screening package are nationwide criminal records, sex offender search, and OFAC/Patriot Act search. The Standard Tenant Screening is only a one-time fee of $19.95. Our Standard Plus Tenant Screening package includes everything offered in the Standard plus a credit report with Fico Score, bankruptcies, foreclosures, medical collections, employment summary, known aliases, past address history, and eviction history for judgments. The Standard Plus package provides you with so much more at only $22.95. For $29.95, you can order our Comprehensive Tenant Screening package which gives you a separate Nationwide Eviction Report in addition to all that is offered in the Standard and Standard Plus packages.

Tenant Background Search provides landlords and property managers with fast, easy and affordable tenant screenings. We are partnered with the largest and most reliable data warehousers to give you the most complete and accurate information available. Secure your investment today with the most trusted and established tenant screening solution in the industry.

Top Qualities To Look For In A New Tenant

Whether you own a single rental property or you're the manager of a large apartment complex, hopefully you understand the importance of a thorough tenant screening. Throughout the tenant screening process, there are a few key qualities that you'll wan to pay close attention to. These qualities will give you insight as to whether you have found the right tenant for your property.

1. They don't put up resistance when you mention a detailed tenant screening.

While you might not always get the comprehensive tenant screening for each person that applies to rent from you, it's important that your tenant be willing to go beyond a basic credit check that many landlords use. If you find a potential renter to be argumentative about getting a detailed tenant screening that involves a background check, then a red flag should go up. You want tenants who are honest about their past and have nothing to hide, so that you can determine whether they're worth the risk.

2. They don't mind if the landlord or manager visits the property.

In most cases, landlords will announce that they are going to be coming by at certain times, but there are other instances when they aren't able to let the tenant know ahead of time. Owning property comes with a lot of responsibility and if there is a storm that causes falling trees or power outages, or if other routine maintenance is required, visiting the property may be required. If you are interviewing a potential tenant and they don't approve of the landlord coming over, then they might be hiding something. Ask them what their concerns are, and if you aren't confident in their answers, take a second look at their tenant screening report to see if it provides an explanation.

3. They have quality references.

Let's face it – it can be easy to get your best friend to write a great reference for a rental home or apartment, even if they know that you destroyed the carpet in your last residence because you hid a cat in the bedroom. A quality tenant can provide you with real information and solid references. Past landlords, roommates who are not friends but were simply living companions for the sake of smaller bills, and co-workers who have seen the living and working quarters of the person all may have good insight as to whether or not they care for their surroundings.

4. They read and understand the lease agreement.

It can be surprising that once the tenant screening is done, the paperwork is signed and the move in day is scheduled, your new tenant is shocked to find out that they aren't allowed to paint the walls in their new place bright orange. Or they find that they can't bring their 150 pound dog with them, when the lease agreement clearly states no pets over thirty pounds. A quality tenant will have read, listened to, and understood the agreement that was set forth in the beginning. If you want to be confident that they read it, have them do it front of you, and then ask if they have any questions once they are through.

A good tenant can make a landlord's life much easier, so be sure you get your tenant screening done, you pay attention to their references, and make sure they know the rules. Once you go through this process, you're more likely to be happy with your new renter.

Top Three Reasons to Perform Tenant Screening

Do you have a room for rent? Have you chosen to lease out an investment property? Are you in search of another person to split an apartment lease with? If so, it is critical to ensure that the person you will be allowing to reside in your home is responsible and stable. You will want to know if there are underlying issues with these people to not only ensure your safety, but the safety of your property, the safety of your neighborhood, and/ or the safety of your investment. Even tenants who are referred by family or friends can be a risk if you don't look into their history.

Tenant screening is the only way to protect yourself and do your best to ensure that you are choosing a tenant who is going to be financially reliable and safe in your home. When screening a tenant, you may choose to pull credit reports, criminal background checks, eviction reports and more. Here are the top three reasons why you should have your tenants pre-screened before you sign papers and hand over the keys.

1. Make (and save) money. If you are sharing an apartment, you need to know the person you choose to share this space with is going to follow through with their half of the pay. If you are renting out your house, you are doing so in order to make money off the investment that you have already made. If you unknowingly choose a tenant with a history of late or missed payments which results in poor credit, you have set yourself up to lose the money. By running a tenant screening report, you are protecting your investment and income by knowing your tenant's ability to pay.

2. There is no way to be able to look at someone and know who they really are. The most polite, nicest, and charismatic person could have a list of criminal activity a mile long. By performing tenant screening, you are able to see what your prospective tenant has done and is potentially capable of doing in the future. If you want to ensure the safety of your high-cost real estate property, your belongings, and the safety of your neighborhood, it is crucial to know the people attempting to reside inside. The background check performed during the tenant screening will give you helpful information to make a decision.

3. The eviction process can be a taxing and time consuming course of action. If the tenant that you deemed kind and responsible turned out to be a dreadful tenant and you have to go through the eviction process, you're in for a long ride. The best way to avoid having to deal with the stress of the eviction process is to skip the assumptions and educate yourself on your prospective tenant's eviction history. By performing a thorough tenant screening, you will be able to see the errors that your prospective tenant may repeat in the future.

Tenant screening will provide information as to how responsible a tenant is likely to be based off of their past history. No amount of screening can guarantee zero problem tenants; however, if you opt not to screen you open the door to many unpredictable outcomes. Tilt the odds of getting a responsible tenant in your favor by performing tenant screening before you sign the lease agreement and hand over the keys.

Four Advantages of an Online Tenant Screening Service

If you're a landlord and looking to rent out a space in your building or home, it is crucial to your peace of mind and investment to acquire a tenant screening service. There are many websites that perform basic tenant background checks, and they can provide such information as your potential renter's criminal record, driving record, employment history, and credit score. All of these factors are very important for a landlord to be aware of because you want to ensure you're renting your space to a reliable, trustworthy, and financially stable tenant. At Tenant Background Search, we perform incredibly thorough and detailed screenings of your potential tenants. There are many benefits of acquiring an online report, with these four being the biggest advantages:

1. It Provides The Fastest Results No longer do you need to wait for days or even weeks to receive the results of a tenant screening. With an online report, you can have the results in hand in a matter of minutes. In this busy world, your time is your most precious commodity and that is why choosing an online background check for potential renters is the most convenient way to go.

2. It Is All-Inclusive Online tenant screening reports are very comprehensive and employ the hundreds of official databases online. They comb through the information provided by National Records and the FBI to give you all of the information you need to know. This can include the most wanted list, national terrorist database, and the national sex offender list, as well as any other relevant information. In one easy click of a button, you will have all of this information and more!

3. It Is Easy To Understand An online tenant screening website will provide you with focused, easy to understand information, all in one place. It is also easy to use and won't require any complicated information on your part. All you need is some basic information on your potential renter, and the site will do the rest for you. You will be able to easily locate and read the information that pops up after the search.

4. It Is Trustworthy You can count on the information being provided during a tenant screening to be reliable and accurate. The information being pulled is typically younger than one month old and comes from many online databases. The reports are also 100% FCRA compliant. Information provided by an online background check comes from many different official sources that compile it together and compares records to confirm it is correct. You want to be sure you're renting to a reliable person, and that is why you need the most accurate information.

As a landlord, your rental space is often your largest investment and most valuable asset, and that is why you need to perform an online tenant screening on all of your potential renters. It is the most reliable, accurate, easy to use, and quickest way of determining if they'll make a great tenant and if you should choose to rent to them or not.

Tenant Screening: What Should Be Included

In order to prevent damage to your property or avoid a month's unpaid rent, it is crucial to get a tenant screening done to prevent any such catastrophes. A legal tenant screening report will ensure that you're renting your property to someone who has a clean background, is financially responsible, and who will treat your space respectfully. Read on for the 4 things that should always be included in a tenant screening. 1. Eviction History A tenant that has a history of evictions means that there have been serious problems with previous landlords. They either did not pay their rent on time, did not follow the landlord's rules, or inflicted damage on the property. County and federal databases contain information on evictions, although it can take a lot of time for a property owner to obtain this information on their own. That is why many choose to outsource their background checks to a tenant screening service.

2. Criminal History A tenant screening will be able to tell you whether your potential renter has been convicted of any crimes. Databases from state, federal, and county sources are combined into one convenient report. You will also have access to sex offender lists, court records, prison history, most wanted lists, and more, so that you can make the most educated decision possible. Make sure the screening includes records from the past seven years, so that you can get as much information as possible.

3. Credit History Being able to see the credit history of a potential tenant will be extremely helpful in making a smart decision towards renting out your space. A thorough credit history will give you information about the tenant in regards to financial liens, payment history, accounts in collections, debt to income ratio, FICO credit score, and more. It can be hard to acquire this information on your own or even with a basic credit history report, but a tenant screening report service will help you attain all the necessary information about credit history to make an informed decision.

4. Employment History Most landlords start their tenant screening process with a renter's application. This is a pretty standard format and will ask the tenant for personal references, as well as their rental and employment history. This is an important step because a landlord will need to know that their employment position is in fact legitimate, and that they have a strong financial standing. By reviewing their place and type of employment, you can determine whether they'll be able to realistically afford the rent each month.

Acquiring a tenant screening on a potential renter is critical to your business and well-being as a landlord. You want to make sure you are making the best decision possible and are renting your most valuable asset to a responsible, financially able, and trustworthy person. There are many ways to obtain this necessary information outlined above, but a tenant screening through a professional service is the most accurate, comprehensive, and easiest way to go.

To Accept or Not Accept Pets—That Is the Question

As a landlord, you do everything you can to encourage people to become new tenants. You entice would-be tenants with move-in specials, temporary reduction in rent prices, and other promotions in the hopes of adding to your second family. Then, one day, you get a visit from a potential new resident. You're encouraged as he tells you that he's moving his entire family with him as he starts a new job in the area. Then he says, "By the way, we also have two dogs. Do you accept pets here?" This query could put a smile or a frown on your face. Indeed, it's the one question that every landlord has to address at some point – will you accept pets on your property or not?

This question creates an interesting internal debate because you fully understand both the pros and cons of allowing four-legged and other creatures on your property. But you can also understand the renter's viewpoint as well. For pet owners, furry friends are not simply extensions of their family – they are family. Additional stress and headaches occur for them with each property that tells them that their pets aren't allowed. There are so many factors to consider when answering this seemingly simple, yet significant, question.

Here are some of the benefits of allowing pets on your property:

1) Larger tenant pool: With so many pet owners looking to rent these days, you get a bigger pool of would-be tenants to choose from if you allow pets, which can help you pick the right tenant more easily. When you have more options in terms of tenant screening, the odds that you can find a renter that you feel very confident will pay on time every month increases. 2) Higher rent: You can usually charge higher rents to pet owners because you know that these tenants will have fewer options for where they can live. In most cases, this could mean a few additional hundred dollars. 3) Longer tenancy: Residents with pets tend to stay longer in one place because they understand their choices are limited as far as pet-friendly properties. Also, they tend to be happier because they don't have to worry about whether their pets will be safely sheltered. There are so many fees associated with getting a new renter in place: there are often realtor fees, home improvement fees, tenant screening fees, etc. It's incredibly beneficial when your tenant stick for the long run.

Here are some of the downsides of allowing pets on your property:

1) Property damage: Pets can cause a wide array of damage to your property, including chewed up carpets or stained floors, scratched furniture, and strong pet odors. In many cases, you won't even be aware of these damages until a resident moves out.

2) Liability: You need to be prepared for the possibility of another tenant complaining that someone else's pet attacked them. Many people need hospitalization from dog bites every year.

3) Community disruption: Neighbors may find that someone else's pets are disturbing their peace. If not dealt with, some people may simply move out rather than continue dealing with a constantly noisy animal.

So the questions remains--should you allow pets or not? You need to weigh the previous considerations carefully before making a final decision. Also check your insurance coverage to see if you're covered for pet liability. It's also a good idea to include a specific pet policy addendum in your lease for each tenant. Remember, every family is different. You may find that you're willing to add not just two-legged, but also four-legged, members to your second family.

How to Get Tenants to Pay Rent on Time

In becoming a landlord, you capture a tiny slice of the American dream. After all, real estate ownership remains one of the best investments a person can make. Still, this privilege also carries tremendous responsibilities as well. As a property owner, you're responsible for the overall upkeep of your property. One important part of this upkeep is finding the right tenants to occupy your property. You would certainly want to engage in thorough tenant screening: conduct a background check and credit check, obtain reliable references (including from former landlords), and learn about current incomes and overall financial situations of potential tenants. Although you weigh each of these considerations and then carefully select your tenants, there are bound to be times when tenants don't quite live up to the expectations that you've set. Even if you use a tenant screening service, every landlord will invariably face a tenant that doesn't pay rent on time, or at all, each month.

It's incredibly distressing as a landlord when you don't receive a tenant's rent regularly each month. You meticulously set up your lease and property rules based on the understanding that you'll be compensated monthly as agreed upon by you and your tenants. Still, for whatever reason, some tenants miss the rent due date. You might be inclined to let it go if it's a one-time occurrence. But what happens if someone consistently misses the due date month after month? Here are a few ideas on how to get your tenants to pay their rent on time.

1) Early bird discounts:

Your tenants might be more motivated to pay their rent on time if you set up an early bird discount program. Under this program, they'll receive a discount on their rent if they pay early or on time. After all, who doesn't appreciate a good discount?

2) Auto pay:

By having your tenants sign up with an electronic auto pay program for their rent, you know that you'll receive the rent money every month as expected. Plus, it helps those tenants that lose track of dates easily.

3) Prizes:

You can reward those residents who consistently pay their rent on time with prizes. You might hold a community raffle and randomly pick out the name of one of your more conscientious tenants and present them with some type of reward. While these ideas may encourage some tenants to be timely with their rent checks, they may not be sufficient for others. In that case, your lease should clearly spell out the penalties for missing the due date. These penalties generally come in the form of late fees and other miscellaneous charges. Keeping in constant communication with a tardy tenant can sometimes help the situation. You should only consider eviction as a last resort when all other options have failed.

Being a landlord can sometimes feel like riding a roller coaster. Having a tenant that doesn't pay rent on time can make this ride seem even bumpier. Still, with some creativity and tact, you can get even the most troublesome tenant to pay rent by the due date. This will not only make the relationship with your residents better, but it will also help smooth your nerves--and your wallet.

What Rental Strategy Should You Use To Maximize Revenue (Short Term Rentals Vs Year Long Lease)?

When you have a vacant property, it can be difficult to know what the best course of action is. Every situation is unique, so it's important to understand what your needs and goals are. There are at least two common options that you can consider to maximize the amount of revenue that you will generate from your rental property. The first option is to rent out the room at a year-long lease to maximize and secure income for the entire year. The next option is to rent out your space to vacation rental websites that specialize in providing short-term rooms to individuals or groups on vacation (such as VRBO or Airbnb). Consider some of the benefits and pitfalls for each below.

Tenants with a Year Long Lease

The first option, renting out your rooms to a tenant for a year-long lease, will help secure income over a long period of time. It can also reduce the amount of stress of needing to find a new tenant between months if a pre-existing tenant does not decide to renew their lease or rental agreement. Even if the market begins to shift, you will have the tenant's monthly rate locked in. Overall, this will be a secure option for you to consider if you prefer a more stable income.

However, if the market shifts in favor of raising prices, you will have a harder time trying to raise prices. Typically, you are only able to raise the monthly rate in between rental agreements by 10% with 30 days of notice or 60% with 60 days of notice.

When opting for a yearlong lease, you will want to verify that the tenants moving in are safe and reliable individuals that won't bring you stress or cause harm to other tenants in the building. Order a tenant screening report today to have a background check done on any tenant.

Renting Out on Vacation Rental Sites

If the location of your rental properties is near an ideal destination for travelers and vacationers, then choosing a short term and variable option may be your best bet. You might be able to charge daily rates of anywhere between $250 to $800 (or more) per night... rates that you would never attain for a long term rental. VRBO and AirBnB are two of the most popular vacation rental sites. These website have been built around the ability to provide short term rentals to people that need a place to stay for a brief period of time.

One downside is that you can run the risk of having more variability in income. Some busier months may be booked completely while others may leave you renting only a few times for the entire month. However, the upside is that you will have much more control over the rent that you're charging. If you expect a busier month, bustling with tourists, you can jump the rates up to accommodate and capitalize on the opportunity.

The other risk is that you could rent to a group of partiers who could damage your property. Unfortunately, on VRBO there is no way for you view the ratings of potential tenants (it would be great to see if other landlords had complaints about this individual in the past or if they had stayed at a bunch of other properties with no issues). VRBO also doesn't provide any protection/ reimbursement if a tenant damages your property; it's completely up to you to collect an adequate deposit. Airbnb offers a bit more protection... but there's still risk involved.

To protect against this, we highly recommend running tenant backgound check. You can assure these possible tenants that running their background check is only a "soft pull," so it won't affect their credit scores in any way.

Which Option Is Best?

As with most rent-related situations, you need to understand the situation that you're in. You will have different results based on the location of your property, the amount of other rental properties on the market and the time of year. With any kind of rental, make sure that the tenant you're bringing in is a safe candidate. Whether it's long term or short term, you can use our background check service at Tenant Background Search. Also be assured that any applicants that get screened through us won't have their score negatively impacted.

6 Factors to Determine How Much to Charge For Rent

When looking to fill vacancies at your property, there are a number of factors that need to be considered that impact how much you should charge for rent:

1. Competition The quickest way to get an average range of rent that you will be able to demand is to look at your competition in the local area. Search through the local newspaper's classifieds, on websites like Craigslist, or simply by using a search engine to look for homes to rent or apartments in your town. Once you identify the companies you're competing with, you can analyze their services, prices, and reviews. This shouldn't be the only indicator of what you can price your property at, but you can use this to get a starting point.

2. Demand The current economy can make a big difference in whether or not you'll be able to get tenants to fill vacancies. If there are not many people looking for a place to live, then charging a higher rent will not be feasible. On the other hand, if you are filling up quickly and there are still people looking for a room to rent, then it is a good time to bump up the rates.

3. Location Where your property is located can be of significant value to certain tenants. Being close to certain shops, parks, sources of entertainment, food, and city life can impact the value of your property. As a result, you have the opportunity to charge a little more than distant competitors. However, if you charge too much, a potential tenant may be willing to live further away to save money.

4. Season The seasons and the time of the year can also impact your pricing. Avoid keeping a "fixed" rate as desirability will go up for individuals or families looking to move during certain parts of the year. Even if your apartments are smaller, they can still be of value to anyone that is going through a hard financial time and needs to downsize into a smaller apartment.

5. Desirability The incentives that you or your competitors offer can be the difference between a tenant landing in a vacant home on your property or not. If your competitors are offering better incentives, like free cable or utilities, to their tenants in order to draw them in, then you may not be able to set a higher price for your apartments. An alternative is to keep the rent slightly below average and then offer paid services to your tenants to make up for the lost monthly income.

6. Test the Market The quickest way to see where your prices fall is to test the market yourself. You could begin by putting in an advertisement with a local newspaper or on Craigslist where your pricing is on par with other competitors. If you are filling open spaces quickly, then you may have set your pricing too low. If they are filling up slowly, then you will want to lower your prices instead. While there is no perfect formula to determine the exact rent that you should charge new tenants, the only way you can know is to come to a decision by considering some of the above ideas, testing the market, and readjusting throughout the year based on what works and what doesn't.

Previous Entries / More Entries