When people ask me if a background check is necessary for tenants, I always advise them to choose the best application they can possibly get with the most information. It’s worth it to invest a little more in excellent and thorough reporting. There are multiple reasons for that. This is the best time and probably the only time that you’ll ever get to gather all the information you want and need from the tenant. On your application, you can ask for the full name and employment contact information as well as dates of birth and social security numbers. You can ask for emergency contacts, vehicle information and a list of occupants and pets that will live in the property. This is the time and place to get all that information compiled.
Credit and Background
With all of this information, you can check the reports you receive against the information that was provided to make sure it’s correct. You want to verify credit reports and criminal histories. It’s important to know if your perspective tenant has a criminal past. You also want to know about evictions and bankruptcies as well as tax liens and divorces. These things may impact a person’s ability to pay rent. A good credit and background check is important. If what’s on the application turns out to be true and accurate and doesn’t need a lot of explanation, you know you’re dealing with a potentially great tenant.
There are laws that dictate occupancy standards and fire regulations. This will impact how many people can live in the property. You need to have safety standards in place.
Income and Employment
Verify income and where their income is coming from. You want to make sure there’s enough income to support rent based upon your qualifying standards.
Talk to tenants about their pets and how big they are. You need to know if they are aggressive animals that may be a liability for your insurance company. The wrong breed can result in your insurance canceling your policy.
Get the tenant’s landlord history and good phone numbers for current and previous landlords. You don’t want to end up talking to an Uncle Bill who will say anything. The tenant’s current landlord might not give you the right information if the tenant has been a problem, because they’ll be anxious to get rid of that tenant. Go back to the prior landlord to get a real truth about that tenant.
Make sure tenant knows your rental criteria and qualifying standards. There shouldn’t be an argument when they’re denied if they know your requirements. It’s also important that you understand federal fair housing so you don’t deny applicants based upon protections.
These are things best left to a good property manager who has dealt with thousands of applications and can tell the good tenants from the bad. Insight and history can help when you’re screening tenants. If you need any help, please contact us at Paramount Property Management & Realty.