“Why Execute Tenant Background Screening?” written by Mike Marko
If you want to know why you should do tenant background screening, you just need to think of this question: What kind of tenant do you want to live in your rental property?
As a property manager, finding high-quality tenants is one of your chief jobs. It’s not an easy one either. You never know who’s reliable or who’s problematic.
You need to ensure that your renters are responsible when it comes to helping you keep a good rental place. You need to check that they’re people who will pay rent on time.
Renting to the wrong tenants can cost you extra expenses, time and hassle. It could even seriously damage your rental property.
These are just a few reasons why a tenant background screening is vital for any rental business. Proper background screening can help you separate the wheat from the chaff among your tenant prospects.
Today we’ll find out more about why executing a background screening on tenants is important.
5 Reasons Why Tenant Background Screening Is Needed
As a property manager, it will always be your duty to keep your premises a good place to stay. You must choose tenants who won’t be a risk to your premises and as well as to other tenants.
This is the main reason a background screening shouldn’t be skipped. It helps you separate the bad tenants from the good ones.
To explain why background screening is so useful for property managers, let’s talk first about what it involves.
What Is a Background Screening?
A background screening is a way of checking a tenant’s criminal background. Not only that, it also checks the tenant’s credit and other aspects of their past.
Background screening consists of reports that are essential in getting an insight into the quality of your tenant.
For example, proper background screening would involve an inquiry into the prospective tenant’s financial history. That usually comes from a look at the prospective tenant’s credit report.
There may be other reports involved in a background screening. Police clearance, for example, and employment histories may even be involved.
Some property managers even require a basic educational history as part of the background screening. This is usually when a particular level of education is required by the property manager as a qualification for tenancy.
Why Should You Do Background Screening?
There are many reasons a property manager should do background screening. Here are five of the most important ones for why executing background screening is important.
1) Keeps Your Rental Place Safe
Background screening is important because it helps you keep your rental property a safe place to stay. The screening process lets you find only good tenants who won’t be likely to cause damage to the place.
A lot of people think this refers only to tenants who aren’t prone to causing physical damage to a property. But keep in mind that there are other ways to damage a rental place.
For instance, if you get a tenant of questionable hygiene, that may damage your business.
Say the tenant has a habit of throwing trash out of the window or letting garbage bags pile up on his doorstep. Wouldn’t the neighbors be likely to complain?
And if you’re renting out other places right next to that property, wouldn’t it be harder to find good tenants as a result?
The same is true of tenants who are prone to causing disruptions.
For example, some bad tenants have a habit of playing loud music during the night. That’s something that may lead to people pestering you with complaints about them again.
Screening your applicant doesn’t only keep your rental place from harm, but \also protects you and the business itself. So do meticulous background screening to ensure the tenants you pick are suitable ones.
2) It Protects You from Liability
Requiring tenant background screening protects you from being liable to a bad tenant. Again, this is a way to protect your rental property business.
Doing background screening lets you steer clear of applicants with questionable attitudes to the law and common decency. Remember that as a property manager, you’re still partly responsible for what your tenants do once they’ve moved into the place.
If you take on tenants who prove to be dangerous not only for your property but also for the local community, that decision will be on your head.
If some unpleasant things happen inside your premises because of a certain tenant, it can lead you into trouble. That’s why you need to do background screening to protect yourself from such situations.
No one in the community will thank you for inviting trouble into their midst, after all.
3) Discourage Secrecy in Tenants
As a property manager, it’s vital to have an open relationship with tenants. Secrecy won’t do well in a rental business — again because you don’t want to invite unknown elements into your premises or community.
That’s another reason you need to do background screening on your prospective tenants. Advertise that you do it, in fact.
It helps you discourage prospective tenants who have something to hide in the first place.
These are obvious cues to help you check if your applicant is suspicious or not:
- If an applicant stops replying to you after you make the background screening requirement known.
- If an applicant refuses to authorize the background screen or report requests (like a credit report request from the credit bureaus).
Remember that tenants who are trying to hide something can cause serious problems to your rental business. So it’s best to discourage them through the requirement of background screening.
4) Verify a Tenant’s Application Claims
Through background screening, you can verify that the information a tenant has submitted to you in his application is true.
This is obviously important. You don’t want to rent to a tenant who starts your relationship by lying to your face.
It’s not just basic factual details that background screening can check too. For example, almost all rental applications ask for references. The problem is that they’re among the easiest things for an applicant to fake.
Some tenants will just put down the names and contact information of family and friends on the application to cover up for them. These people will then provide glowing references for the prospective tenant — references you can’t trust.
It’s your duty to verify the legitimacy of the information a tenant has provided to you. Use background screening for that purpose.
5) Reduce Tenant Turnover
Requiring tenant background screening gives tenants an impression that you have a strict tenant screening process. This helps you attract high quality tenants. These tenants are more likely to stay longer or renew their lease.
This helps you save your time and money because you won’t have to look for a new tenant right away. You also save yourself from legal trouble and probable headaches by renting to a high quality tenant.
Final Thoughts on Why You Need to Do Tenant’s Background Screening
Today, I’ve shown you a few reasons why executing tenant background screening is important.
Background screening is a process of checking on prospective tenants in order to find those who are dependable and law-abiding. The goal is to make sure only those prospects are considered as tenants for your rental property.
Through a thorough and careful process, background screening looks into the past behaviour of a tenancy applicant. Screening includes researching serious issues that the prospective tenant may have had, such as criminal arrests or evictions.
A background screening process is a critical part of being a successful property manager. Without it, you can’t make an informed decision when choosing tenants.
That can lead to you making dire mistakes. You may end up renting out your property to someone who can stir up trouble in the neighborhood, for instance. You may also end up renting to someone prone to damaging the property itself.
You may even end up renting to someone whose finances are too wobbly to support the rent you’re asking for the premises.
To avoid all of these things, make sure you conduct background screening on all prospects. It will keep your property and business safe.
We hope you learned a lot through this post. If there’s anything more you need to know about background screening, let us know in the comments section below.
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