As a landlord or property manager, screening potential tenants is an essential part of protecting your investment and ensuring a safe and peaceful living environment for all tenants. The use of background checks is one of the most effective ways to evaluate and determine the risk posed by prospective tenants. In this article, we will examine how landlords and property managers can use background checks to screen potential tenants.
What Information Can Be Obtained From A Background Check?
Background checks can provide valuable information about a tenant’s criminal history, credit history, and eviction history. Criminal history reports can reveal any history of criminal activity and can indicate whether the prospective tenant has any outstanding arrest warrants or is on any sex offender registries. Credit reports can provide an indication of a tenant’s payment history, current outstanding debts, and any bankruptcies or foreclosures. Finally, eviction reports can provide insight into any previous eviction proceedings involving the tenant.
It is important to note that before conducting a background check, landlords must obtain written consent from the prospective tenant. Landlords must also comply with federal and state laws related to consumer reporting, such as the Fair Credit Reporting Act (FCRA).
How Do Landlords and Property Managers Conduct Background Checks?
Landlords and property managers typically use a screening service to conduct background checks on prospective tenants. These services can be found online or through local tenant screening companies. These services typically require the landlord to provide the tenant's information, such as their name, address, and social security number.
Once the information is provided, the screening service will conduct the necessary searches for criminal, credit and eviction history. This information will be compiled into a report, which the landlord can review and use to make an informed decision about whether to rent to the prospective tenant.
What Red Flags Should Landlords Look Out For While Screening Potential Tenants?
While conducting a background check, landlords should look out for any red flags that indicate the prospective tenant may pose a risk or be unreliable. Some common examples of red flags include:
- Criminal history: Any history of violent or sexual offenses, drug-related offenses, or theft.
- Poor credit history: High levels of debt, accounts in collection, or numerous late payments.
- Past evictions: A history of eviction proceedings can indicate that the tenant has a poor rental history.
It is important to note that a red flag should not necessarily result in the automatic rejection of a tenant’s application. Instead, landlords should use these red flags to inform a more in-depth consideration of the prospective tenant’s application.
How Can Landlords and Property Managers Use the Information Gathered From Background Checks?
The information gathered from background checks can be used to identify potential risks and make informed decisions about which tenants to rent to. For example, if a tenant has a history of evictions or multiple late payments on their credit report, the landlord may require a higher security deposit or co-signer to mitigate the risk of future problems.
Additionally, tenant background checks can help landlords spot fraudulent or falsified information provided by prospective tenants. For example, if a tenant provides a false social security number or incorrect information about their rental history, these details may be revealed in the background check.
In conclusion, conducting background checks is an essential part of the tenant screening process for landlords and property managers. These checks provide valuable information about a tenant’s criminal history, credit history and eviction history, which can be used to identify potential risks and make informed decisions about which tenants to rent to.