“The Advantages Of Background Screening” written by Mike Marko
Are you looking to find the best tenant for your rental property?
That’s where tenant background screening comes into the picture.
Many property managers believe that background screening is unnecessary. They believe that having past success in finding good renters who pay on time means they will continue to be “lucky”. However, that approach is like playing Russian roulette. Finding qualified renters that can pay on time and don’t damage your properties are becoming more difficult to find.
The focus of this article is to discuss the advantages of doing background screening on rental applicants. That information alone will help you understand the need to conduct a background screening during the tenant application process.
Importance of Background Screening
Before we start talking about the advantages of background screening of rental applicants, let’s first answer the question…
What Is A Background Screening?
Background screening is a way to find out the rental history and financial history of prospective tenants. The best way for you to have insight about a prospective tenant’s behavior is if you conduct a background screening or background check during every tenant’s application process.
The information you get from doing a complete background screening on a prospective tenant is essential. In addition to financial history expect to see the applicant’s criminal records, rental history, and identity verifications during a background screening.
Why Do You Need Background Screening?
Background screening is probably the most essential way to almost guaranteed to find the most qualified and best tenants to rent your properties. As a property manager, your primary obligation is to make your business successful. You could improve your rental property if you choose the right tenants because it can speed up your return on investments. Aside from that, here are some of the reasons why you need background screening.
- Allows you to easily validate the information in the rental application form of a prospective tenant. By verifying the information, your worries for having a criminal or a bad tenant inside your property will be reduced.
- To screen out bad or criminal tenants allows you to keep your tenants safe and is one of the main reasons why a background screening is important. Always be cautious whenever a prospective tenant submits a rental application. You are not only putting the future of your business on the line, you are also putting your tenant’s and your own safety in danger if you are allowing tenants who didn’t undergo a background screening. How can you know that the person you accept is not violent? What will happen if an argument had suddenly erupted inside your property? You had to ensure that every tenant in your property is not violent to avoid any casualty or any crime that could possibly happen while renting your property.
- Background screening could also reduce the risk of major loss of income. Background screening does not guarantee you payments but it can help you to avoid tenants who are not paying their bills on time or tenants who will damage your property. The key point here is that history repeats itself, and knowing the tenants financial and rental history gives you a guideline to predict their future behaviors.
History Repeats Itself
The most important reason for background checks on prospective tenants is that history tends to repeat itself. When looking into someone’s past is the best way to predict the tenant’s future behavior.
Knowing and understanding the tenant’s financial behavior largely affects the income of a rental property business. Along with late payments and unpaid bills, having a history of bad financial behaviors of your tenants can also determine if your business will succeed or not due to the way the will pay or not pay their rents on time.
Various complaints about your residential property could annoy your tenants. Unresolved complaints, and a history of having renters who cause problems while renting would give your rental property management business a bad reputation and it could prevent prospective tenants from renting your property. If this continues for a long time, your business might end up in bankruptcy.
You can only avoid this scenario if you choose your tenants wisely. Conducting a background screening on every possible tenant could help you avoid renters with bad habits and bad behaviors.
Reminders For Property Managers
The information you receive from background checks gives you the best chance to accept the most qualified tenants for your property. Tenant screening services are not offered for free but you can still charge the applicant for the money that you spent in checking their background and credit.
Before you do any sort of background check or credit check on a tenant, you are required to have signed authorization from the tenant that shows you and the applicant agree to the terms and requirements for renting your property. According to the law, you can’t do background and credit check on a tenant if they refuse to undergo a background screening.
Be aware of the applicants who are refusing to undergo a background screening because of most of the time, they could be hiding something from you. As the property manager, you could immediately reject the rental application of a prospective tenant if they refuse to undergo the proper process of accepting tenants.
Also, it is very important to verify everything on the background screening report. Some documents can be easily faked and it is advisable to do additional background checking on the prospective tenant. Everything can be found on the internet nowadays, it will easier for you to look for the previous employers and landlords of the applicant to verify the information they have provided on their application.
You can verify the identity of the applicant by contacting their previous landlords and employers. Arrange a personal meeting with the prospective tenant’s previous or current landlord and ask questions about the applicant’s behavior. However, beware of accepting references because some landlords are giving references to get rid of their bad tenant from their property.
Final Thoughts About Background Screening
Background screening is essential in protecting your properties from rent loss or damages. Making the background check process part of every rental application gives you the best chance of finding the most qualified tenants for your property.
Conducting background screening for every possible tenant can also help keep your tenants away from danger. Aside from making your business successful, it is important to also prioritize the safety of your tenants.
Consider the reminders in this article because I’m sure that it can help you in making decisions for your rental property.
If you have any questions or comments please feel free to enter them below.
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 website 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.