The news that almost 40% of small-scale landlords are tightening their screening criteria suggests people take this rental application step seriously. Conducting a thorough tenant background check will ensure your property is more secure, giving you much greater peace of mind. However, what does the tenant screening process entail, and what landlord screening tools are available to help you get it done?
The following information will help you learn about the essential steps you need to take to ensure your screening process is effective. So, read on and ensure rental application checks do not cause you to worry.
The Purpose of Running a Tenant Background Check
Running a background check is one of the methods a landlord has to ensure they bring in reliable tenants, allowing them to protect their real estate investments. Without these, a landlord would not be able to know whether a tenant:
- Was who they said they were
- Told the truth about their employment
- Could afford the property
- Had prior good relationships with landlords
- Hid a criminal background
As such, they clarify a tenant's ability to meet rent obligations and where there are potential red flags a landlord should know about.
Components of the Tenant Screening Process
The background check process starts with the potential tenant informing the landlord of essential information. Traditionally, this is enough information to allow the landlord to investigate the renter's past and screen them for specific markers.
The check will include you conducting a:
- Credit check to investigate financial stability
- A criminal history check to ensure safety
- Employment verification check to confirm income
- Rental history review to assess the tenant's past behavior
The screening application they fill in will act as a legal document, giving you consent to run these checks. The more detailed they are, the better, and may require that you ask for personal information.
However, you should ensure that the request complies with Richmond and U.S. law regarding suck checks.
Best Practices for Conducting Background Checks
When you set up checks, use a reputable tenant screening service. Doing this will ensure that a third party separates you from the relevant information for legal purposes.
Screen all applicants the same way. Use a standardized document and send an identical email for each one. You thus avoid suggestions of favoritism or prejudice.
You must also safely store all screening documents and decisions for future reference. Failure to do so could violate data protection laws such as GDPR, depending on your tenants.
After running the check, also make sure to check your data with regional averages. There is no use in learning that, for example, a possible tenant has a minor credit issue but that the local averages for this are an outlier. So, evaluate not only the tenant specifically but also local patterns to make a more prudent decision.
Be Informed to Secure Your Investment
A tenant background check is undeniably pivotal to maintaining the safety and value of your property. A well-implemented screening process can thus help a landlord make the right decision.
If you need help running checks or do not have time to do so yourself, consider partnering with a professional property management company. Expert property managers such as Renters Warehouse can offer reliable screening services and many other benefits. So, contact Renters Warehouse today for a rental analysis to learn what they can do to take such a weight off your shoulders.
