Why Performing Background Checks on Your Tenants Can Save MoneyPosted on: June 21, 2018 by Gavin Muirhead
Finding tenants that you can rely on is no easy feat; that’s why utilizing the help of a comprehensive background check is so important. If you’re looking for tenants who are responsible, diligent, and upstanding, a background check can provide you with all the information you need in order to make a sound choice.
What You Should Know About Your Tenants:
Rental properties only survive off of rent from tenants who are reliable, trustworthy, and consistent. Finding tenants to rent to is a difficult task; it involves a lot of research, pre-screening, and information collecting in order to feel good about your decision. Entering a rental agreement with the wrong tenants can be tricky if you’re not careful; it can set you up for long back-and-forth rent battles, can create lawsuits, and can leave you without the money you need to pay your own bills. Furthermore, renting to individuals who don’t take pride in the property as much as you do can be maddening, and can ultimately lead to expensive repairs. Before agreeing to rent to a particular tenant, it’s important to do your research first. Conducting a background check on your tenants will give you the following helpful information so that you can make the most informed decision possible:
Current and Past Employment
One of the most important factors that contributes to whether or not someone is reliable and consistent with their rent payments is their employment history. A background check will reveal prospective tenant employment histories that allow you to see the level of consistency across time, any areas of concern without employment, and history of frequent job loss over time. Each of these factors may be telling of the person’s character, but it may also simply open the door for discussion.
Criminal Record History
If someone has a criminal past, it doesn’t necessarily mean they’re unreliable or inconsistent; they may have had a rough patch in their life that they can fully explain and be accountable for. However, specific criminal histories that involve money, such as fraud or tax evasion, are red flags to look out for—it might indicate that the individual isn’t as responsible with money as you’d like them to be in order to feel comfortable renting to them.
It may seem simple, but landlords can also use background checks to verify tenants identity. In recent years identity theft has become an issue, where prospective tenants may use someone else’s’ identity in order to qualify for housing. This is problematic, as landlords run into problems obtaining rent payments and may be liable for not conducting a background check beforehand.
One good indication that a tenant is consistent and reliable with payments is to look at their rental history. Frequent moves to different locations, histories of evictions, and other red flags can help you narrow down your choices to a more reliable pool of tenants. Rental histories can also show long-standing residences, which let you know that they had at least a good working relationship with their previous landlord(s).
You might be wondering why a landlord needs to know about someone’s credit—especially if they’ve already looked into the aforementioned factors. However, a credit report lets you see how financially responsible an individual is. For instance, if they have a lot of outstanding debt then that might be a concern to a landlord to inquire about. This can also tell you whether or not they’ve been diligent about rental payments in the past with previous landlords.
Researching Tenants Saves You Time, Energy, and Money
As you can see, there are many factors to consider before entering a rental agreement with a prospective tenant. By looking into the above-mentioned considerations, as a landlord you will save money in the long run; however, it will also save you precious time and energy that so few of us have at the end of every day. The last thing you want to deal with is lawsuits, difficulties collecting payments, or property damages due to negligent tenants. A simple background check can spare you plenty of hassle and heartache.
How We Can Help You
Here at Affordable Background Checks, we provide property owners with all the information they need so that they can make informed decisions that are best for their financial futures and reduce stress about the process of finding reliable tenants. If you would like to know more about the services and information we can provide to you, please look over our website or contact us directly.