“Key Tips To Performing A Tenant Personal Background Search” written by Mike Marko
Do you know how to conduct a successful personal background search on your prospective tenants?
Bad tenants: I’m sure we all can share or at least know of stories. Bad tenants can cost a property manager both time and money. That’s why it’s important to conduct a personal background search on each potential adult tenant.
A background search is usually done by tenant screening companies. But if you have the time, you can also conduct the background search on your own.
In this article, we’ll discuss what is a personal background check and how you can do it without violating any rental laws.
Property Manager’s Personal Background Search
The personal background check allows you to check into a prospective tenants past and find out historically how they act in rental properties as well as with their credit history.
When doing a personal background check you have two options to check on your prospective tenants. The first option is to hire a tenant screening company and allow them to do the background check and produce a report. While the second option is much more involved as the personal background search is done on your own or by your property management staff.
Both types of personal background checks can meet your needs. However, if you have numerous rental applications it might be a better option to hire an outside agency to lessen the workload on staff. Hiring an agency to do background checks can save money and time, allowing you to have your staff focus on property management.
The focus of today’s article will be on what you need to know about personal background search and how it can be used to help you find the best tenants for your rental properties.
Before getting started let’s first find out what is a personal background search.
What Is A Personal Background Search
A personal background search is a way of finding out the personal and credit history of tenants applying for your rentals with their approval. This process is used to verify the identity of a person, determine historically how they act when renting, their creditworthiness, and for safety and security reasons.
A background search is commonly used by landlords and property managers in screening their applicants. Aside from screening tenant applicants, a background search is also used by employers to determine if they want to hire an individual.
Information Gathered From A Personal Background Search
The background screening process gives property managers a lot of useful information about their prospective tenants. First, the background search can help in verifying the identifying information given by prospective tenant on their rental application form. With identity theft running rampant, using the background check report to verify and determine the identity of the applicant is the main feature and is very useful in the tenant screening process when accepting new tenants.
In addition to verifying an identity of the applicant, the background search helps the property manager gain information about the prospective tenant that is used to determine who is best to rent the property.
Reports From An Outside Agency
When hiring an outside agency to do a background check there is a report detailing all the information found that is forwarded to your property management team. The reports that are produced during the background check can help you and your property management staff to determine if the applicant is worthy or qualifies to be their tenant.
What You Can Learn From The Background Search
From numerous online sources, the most common information that is disclosed during a background search is the prospective tenant’s credit, rental, and work history. The information that is given in the background report may differ depending on the company or agency that provided it.
Additional information such as education, bankruptcy, medical, military, real estate, and employment records can also be given at additional cost.
Following The Rules
There is a certain set of “rules” or “guidelines” in conducting a background check that needs to be followed by a property management business. Property managers can’t just conduct a complete background check on their prospective tenants without the applicant’s approval.
Even if you choose to conduct a personal background search using your own staff, there are still guidelines that you need to follow.
As the property manager, having knowledge of the correct process of conducting a background search is needed to avoid any violation of rental laws.
How To Run A Personal Background Search On Prospective Tenants
Conducting a personal background search on your prospective tenants is not that difficult. In fact, it would cost you less time and money if you do it on your own. However, the information found using your own resources could be limited and not as complete as when hiring a background search company.
Here’s the correct process of conducting a personal background search.
Know Your Tenant First
The background check process starts from the first contact you have with a prospective tenant. Each time you meet or talk to the prospective tenant gives you a chance to get information regarding past rental history, reasons they are moving and what exactly they are looking for in a rental property. Getting to know your tenant and determining if they are interested in renting the property is the first step you need to accomplish.
Knowing and determining if the tenant is interested in the property rental allows you to begin working on completing a background check on the applicant. As a property manager, you can’t just conduct a personal background search on someone that is not committed to renting the property.
So to avoid any legal pitfalls it is always best to ask the person directly if they are interested in the property you are renting and if they want to fill out an application for that determined property. Having their approval allows you to explain the process of how you verify applications by conducting a background search and other processes in your tenant screening process.
When making up or using an application for rental you need to follow all the rental laws and not violate any discriminatory laws with inappropriate questions on your rental applications. The most important thing your application form must get is all of the useful, truthful, and accurate information from your prospective tenant.
Rental application forms primarily focus on the prospective tenant’s financial information, employment information, and personal information. In addition to this, the application can ask questions regarding past rental history and other personal information.
Using the information provided in the rental application is key to use in conducting the necessary background and credit checks on the prospective tenant.
Property managers could also use their rental application form to inform the prospective tenant about the screening process of their rental property business.
Here are some basics of what should be included in finding and using an effective rental application form:
- The current and previous employers of the tenant
- Amount of the tenant’s salary or income
- Contact information of the applicant’s employers and landlords
- Personal references
Conducting A Personal Background Search
If you decide to do the tenant background screening process on your own or with your staff there are several things you must remember to do prior to starting.
First, you need to inform your tenant and get authorizations signed that you are conducting a background check on them for the rental property they are interested in.
Secondly, you should inform the applicant of any additional costs and collect those up front prior to beginning your background check process.
Ask Tenants To Sign A Consent
When conducting any background check, online or by your own staff, you must first ask your tenant to sign a written consent that is allowing you to conduct a background check on them. According to the Fair Credit Reporting Act, landlords and property managers are not allowed to run a credit check on their prospective tenants without a written permission.
The written consent is either on the rental application form or in a separate document. Make sure to mention all of the tenant screening processes you will be completing on your rental application form.
Start Your Personal Background Search On The Internet
When doing the background check on your own it is best, to begin with opening a search engine like Google and just type the applicant’s name and see what comes up. Additional searches can be checking social media accounts, verifying employer contacts, and other data record searches available.
Often when just typing a person’s name if there is identity theft going on it is often disclosed in search engines. Being able to verify the identity of the applicant and read through their social media accounts will contain information that might match the information that they provided in the rental application form.
When searching the prospective tenant’s name on any search engines such as Google, add quotation marks.
By adding quotation marks, the search engines will show results of the full name instead of showing results for John and Smith or John and White. This simple tip can save you time in finding the right person’s information quickly and effectively. You must also be aware that multiple people could come up from just typing the name of an individual. You must offer other identifying info like social security, driver’s license, and date of birth to find information on your application that is reliable.
If you want additional information such as the prospective tenant’s rental history and credit history it’s difficult to get this information free from the internet so we would suggest that you seek help from tenant screening companies. Many tenant screening companies are offering background check services on the internet and the cost of their services are inexpensive.
Look For The Applicant’s Public Records
For the safety of your rental property and its tenants, you should always check the criminal records of any applicants. Check if they have been arrested, convicted, or experienced bankruptcy.
Knowing exactly the type of person and their criminal history of that person can help you in deciding if you wanted to rent them the property. Most of the time an applicant’s public records are available at their local government offices and websites but could come at an additional cost.
Contact The Applicant’s Personal References
Probably the most useful way to use the internet is to get past employment phone numbers and past personal and rental references phone numbers from the internet. The reason this is useful if you can avoid being fooled or frauded by the applicant if they were to misrepresent past employers, rentals, or personal references. Contacting the applicant’s employers and landlords to verify their information is also advised. However, it is better to not contact the numbers or email addresses that are provided in the rental application form. Anyone can pretend that they are the prospective tenants’ landlords or employers.
So instead of using the provided contact information, look for the individuals that are mentioned in the references. You can make use of the internet and verify if they are really using the contact information that is provided by the applicant.
Final Thoughts About Personal Background Search
As we discussed in this article, conducting a personal background check is not that difficult. If you have the time you can try conducting it on your own. Start by letting your applicants fill out the rental application form. Once it’s completed (and signed) you can get started with the personal background check.
Making sure you have good tenants in your rental properties is paramount to your success. Bad tenants will only cost you time and money. So whether you hire a company or do it on your own, ensure you run a personal background check on every applicant before renting to them.
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.