“Are Background Check Services Needed?” written by Mike Marko
How do you know if you have selected the right tenants for your rental property?
When you’re running a rental property business, it is important to know the best way on how you could choose the right tenants.
Before you make your first step or rent your first property, you should have enough knowledge about the process of tenant screening. As a property manager, you will develop entire background check process for renting the properties you are managing. Finding the best background check services that you should use for your properties is key to finding the best tenants for your properties. Developing and using the correct background check process will help eliminate bad tenants from renting your properties.
I will help you to understand why background check services are important with the article below.
Importance Of Background Check Services
There a numerous background check services online… all you need to do is google or bing search and seek out the best reviewed to use. By finding excellent background check services you will be able to easily evaluate a prospective tenant and determine the most qualified tenant for your rental properties.
Qualities Of A Good Tenant
Before anything else as a property manager ask yourself first, “what are the qualities that a good tenant should have?” When you identify the good qualities that you would like in your tenants then you can develop a list of those qualities. After you determine the most important qualities, then you should prioritize your list and use when evaluating any rental application.
The list below is a good place to start in developing your own list of qualities a excellent tenant should have:
- Pay the rent on time
The first quality that a prospective tenant should have is the ability to pay the rent on time. Late payments will slow down your business and create additional work to get late payments paid. Additionally a tenant who does not pay rent on time could eventually default on their rental contract causing you loses and large amounts of unpaid rents which could eventually lead to bankruptcy for your rental property business.
- Keep the property in good condition
The prospective tenant should be a responsible person and have a rental history of never damaging a property that they lived in. Repairing damage to a property is necessary and part of the requirements of running a good property management firm. However, when that damage is not due to wear and tear or common use… It may have been caused by the tenant abusing the property. And if the tenant causes damages in the past it is an indication that they may do it to your property as well: costing you money you did not expect to spend.
- Not An Annoying Neighbor
Just like the repairing the damaged property, the tenants who are disturbing their neighbor will surely give your rental property business a bad reputation. The prospective tenant should be a good neighbor, their rental history or previous landlord references should not include any complaints. If a tenant begins to cause complaints with other tenants then you should be prepared to warn them in writing. If they do not change their behaviors you will need to have eviction processes in place for these troubled tenants.
To check the behavior and character of a prospective tenant, a background check should be conducted. Any applicants on your rental property should meet or exceed your requirements. All of the important information you should know about the applicant will be included in the background report and conduct your own screening of the applicants.
Purpose Of Background Check
We have talked about what are background check services, so let’s delve into why they are needed.
Why Take Advantage Of Background Check Services
A background check allows you to search the history and determine if the tenant has given you a true picture of who they are as a renter. In conducting background check services we are checking the personality, financial stability, and rental history of the applicant to secure your property. By conducting a background check, you will be familiar with a lot of information about the applicant’s past mistakes, character, and fitness.
Basically, a background check service will disclose a lot of information about the applicant. Though the process is extracting and screening a lot of information about an individual, there are laws that should be followed to avoid any illegal discrimination or violation of privacy.
In most cases, background check services will get the applicant’s criminal records, driving records, and education verification. Criminal records of sex offender registry, credential verification, skills assessment, reference checks, and credit reports will also be included.
As with any background check service used, make sure you have the tenants signed an authorization to do such background checks.
Information That You Could Expect From A Background Report
- Criminal, arrest, incarceration, and sex offender records
- Education records
- Employment records
- Financial information
- Social Security Number
Follow Up And Verify Information
The tenant screening process doesn’t end with the background checking service. That is actually the beginning of the process, it is advisable to check and verify the information included in the report to avoid fake documents and to determine the most qualified tenant to rent to.
In some cases, the background check services report might not include any negative items and it only had good items such as no felonies, no evictions, reasonable credit score, and information. This kind of report is not the norm and should be check closely to make sure no fraud has occurred. Doing your due diligence when completing the background check and verifying the information contained in the background report is the best way to avoid fraud and fake documents.
Background check services are best utilized to verify the authenticity of the prospective tenant’s employment and credit history.
The Work Number
A website called The Work Number is offering services that help you to verify the employment of the applicant. Calling the provided contact number of the employer in the applicant’s rental application is not advisable because it can be easily faked. Anyone could pretend that they are the prospective tenant’s employer. Website’s that do these types of services are excellent to use if you don’t have the time to do the verifications on your own.
What About Past Landlords?
The same thing is advisable in contacting the applicant’s previous landlords. A google search might find the previous landlord, but a background checking service would most likely get the information for you. When interviewing the prospective tenant don’t hesitate to ask about how their previous relationships were with and how they ended with previous landlords.
Asking the right questions like Did your last rental relationship end on a sour note? Or “Do you believe that your previous landlord would rent to again?” are ways to find out past rental relationships.
An easy way to verify past residence and to find out past landlord information is to request a copy of any recent utility bill. This way you can verify the name, address and contact information of the applicant’s previous landlord.
Verify The Background Check
Whenever you are unsatisfied with the report of the background check services, don’t hesitate to verify the information about the prospective tenants directly through conversations or phone calls. The internet is another way to verify the applicant’s background information, but it isn’t always easy to find personal information on the internet.
Using Social Networks
Nowadays, a lot of people are currently posting information about them using different social media websites. Facebook, Twitter, and Google + are the most commonly used social media networks. By requesting social media account on the rental application or by typing the prospective tenant’s name in the search field of a social media provider, it is possible to check if the information about the applicant’s identity and personal information on their social media accounts. Often times you can verify the information contained on the background report and compare if it is similar to the information on their social media accounts.
Visit The Applicant Unexpectedly
Usually, after you rent the property to a tenant you can find out a lot of how the tenant lives, cleanliness, etc by doing a surprise visit. Visiting the tenant after they have moved in completely allows you to see the prospective tenant’s behavior and character. This will give you an idea or an insight if the tenant is taking care of the rental property.
Calling The Previous Landlord
Calling the previous landlord is one of the best ways to verify the information on the prospective tenant’s background report. You must still do your due diligence and check information against background reports because sometimes previous landlords will give good references to get rid of a bad tenant.
But don’t be discouraged, always consider calling the prospective tenant’s previous landlords and while talking to them, try asking these questions.
- When did the tenant live there?
- Did the tenant always pay on-time?
- Did you ever have to serve a legal notice?
- Did the tenant have any pets?
- Did you ever have any trouble or damage?
- Did the tenant give you proper notice to vacate?
- Did the tenant leave the unit clean?
- Was the tenant asked to leave by you or your company?
- Would you rent to this tenant again?
Final Thoughts About Why Background Check Service Are Needed
Using background check services allows you to streamline your screening and rental application processes. Even though you can get reports for background checks, you must still do your due diligence in verifying that the information contained on the reports is correct and applies to that tenant.
When using background check services on any prospective tenants but be sure that you are not violating any laws and don’t ever use the information of the applicants to take advantage of them. Always remember that you are only using their information to protect your rental property business.
You could use this article in making your own process of screening your tenants. It is time to start screening your tenant with enough knowledge, read our other articles about rental property business.
If you need help marketing your business online then check out IM Consultant Services.
Disclaimer: This commentary is a matter of opinion provided for general information purposes only and is not intended to be taken as investment or trading advice under any circumstances. Information and analysis above are derived from sources and utilizing methods believed to be reliable, but we cannot accept responsibility for any losses any person may incur as a result of this analysis. Individuals should consult with their personal financial advisers. By using this web site or any information contained in it, the user specifically and expressly agrees that no advisor-client relationship is created between said user and any author, owner, executive, or principal of this web site by either use of this web site, or by any information, product, or service offered by or on this web site. No express or implied guarantees or warranties as to investment or trading results are made, and any perceived insinuations of such are hereby expressly disclaimed.