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As a rental property owner, it is important to understand the process of background checks for your potential tenants. It is not only a way to protect your investment, but also to ensure that you are renting to qualified individuals. This process can seem daunting, but by understanding the basics, you can feel confident in your decision-making. Here we will outline what goes into a background check and how you can use this information to make the best choice for yourself and your property.
A tenant background check is a process of combing through public records, court records, and more to find out if a potential tenant has been involved in any legal issues or their credit report. This information is used to protect your property from future damage while also ensuring that you are renting to reliable individuals.
From a landlord's perspective, resident screening is absolutely crucial. Tenants are responsible for your property. They can cause damages, neglect the space, and create bad relationships with neighbors. A bad tenant makes renting a million times harder. Background checks are one of the best ways to protect yourself from these types of scenarios.
Now that you know what a tenant background check is and why it's so important to conduct one for all of your potential tenants as the property owner, the next step is to learn what's included in a proper tenant screening. Again, every landlord has their own preferences on this matter, but we've compiled a comprehensive list for you below.
A credit report is an important asset for tenant screening. It tells you everything about a person's spending history and whether they pay their bills, but keep in mind that while we won't be able to see all their specific scores. Though there will probably still be some information on loan amounts or accounts in collection, bankruptcies, and lawsuits.
A criminal background check will show you if a potential tenant has been convicted of any crimes in the past. This could include anything from DUIs to drug charges. It's important to know this information before renting to someone, as it could mean they are more likely to cause property damage or violate lease agreements.
If a potential tenant has been through an eviction process in the past, it's best to know about it. This shows that they have had difficulty following rules and regulations in the past and may not be the best candidates for your property. To do this, you can ask their previous landlord when you're calling for a reference. However, you can also take the time to check county court records on your own.
Generally, it's accepted that you will need proof of income to accept a potential tenant's rental application. You have the right to know whether they will be able to pay you what you charge for rent. With that in mind, the simplest method to obtain this information is by collecting recent pay stubs. Typically, landlords request pay stubs from the previous three months. If your potential tenant is self-employed or a freelancer, you should ask for a copy of their most recent tax return instead. You could also try to get employment verification by phoning their employer if possible.
Once you've got a better understanding of what tenant screening consists of, it's time to consider how you'll go about performing this task yourself. To that end, we've compiled a few pointers to make the process smoother. Read them over so you have a clearer understanding of what needs to be done.
If you're not comfortable conducting a background check on your own or just don't have the time, consider hiring a property manager. Property managers are professionals who will take care of all the details for you- from finding tenants to conducting screenings. This can be a great option if you're short on time or simply don't want to deal with the hassle.
There are companies out there that offer tenant screening as a service. This can be a great option if you want to make sure everything is done properly and by the book. These services will typically conduct credit checks, criminal background checks, and eviction history searches for you.
It's important to understand that there are certain fair housing laws in place to protect tenants. According to the Federal Fair Housing Act, it's illegal for landlords to discriminate against potential renters on the basis of race, color, national origin, disability, or familial status. You must follow these guidelines when doing your tenant background check.
When you're conducting a tenant background check, it's important to keep track of all the information you gather. Make sure you hang on to the original applications so you have everything in one place. This will come in handy if there are any disputes down the line.
Anyone who owns a rental home should perform tenant background screening. However, it isn't without its complexities. To that end, keep this post as a general guide to the procedure. If you have specific concerns about rights landlords and renters in your region, you should contact either a real estate agent or a real estate attorney for more information.
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