Every landlord wants peace of mind when handing over the keys to their property. The truth is, without a thorough tenant background check, that peace of mind is hard to come by.
The FBI logged a staggering 38.87 million background checks in 2021 alone, according to DataProt which highlights just how critical background verification has become. For property owners, it's even more crucial. A single bad tenant can lead to unpaid rent, property damage, and ongoing legal headaches.
The tenant screening process is your best defense and skipping any part of the process can cost you big down the road. Keep reading to discover how to safeguard your rental investment through an effective tenant background check.
Verify Identity with Government-Issued Identification
Start the tenant screening process by confirming the applicant's identity. This step ensures that the person applying is who they say they are.
Always request government-issued identification, such as a driver's license or passport, and verify their social security number. This simple but crucial step helps you avoid fraudulent applications.
The FBI reports a growing number of rental scams which makes identity verification a must for landlords.
Check Income and Employment Verification
After verifying identity, the next step is checking the applicant's income and employment. Make sure the tenant can afford the monthly rent by confirming that their income meets a recommended threshold, often three times the rent amount.
Income verification usually involves reviewing recent pay stubs or bank statements. For employment, call their employer to ensure their job is stable. This step ensures you're renting to someone who has the financial stability to make regular payments.
Review Credit History and Payment Behavior
A credit check is one of the most telling parts of a background verification process. It gives you insight into a tenant's financial responsibility.
Review their credit score, but also look at payment behavior and any outstanding debts. Missed payments, large debts, or accounts in collections are red flags.
According to Experian, a score below 670 is typically considered risky for landlords, while a higher score may indicate reliable payment habits.
Examine Previous Rental History
Contacting previous landlords should be a standard part of your landlord-tenant checklist. Ask whether the tenant paid rent on time, took care of the property, and followed the lease agreement. Consistent positive feedback from previous landlords indicates a reliable tenant.
This simple step can save you from dealing with:
- Late payments
- Property damage
- Potential evictions
Conduct Criminal Background Checks
Safety is a top priority for any property owner. Conduct a thorough criminal background check that focuses on convictions, not just arrests.
Look for any concerning patterns, such as property damage or violent offenses. This step helps you protect both your property and other tenants.
Your Tenant Background Check Made Easy
When it comes to securing a reliable tenant, a comprehensive tenant background check makes all the difference. You've learned the key steps to protect your property but doing it right requires precision and experience.
That's where PMI Realty Management NW steps in. Our team offers a property management guide that ensures every applicant is thoroughly screened to save you time and money. We utilize advanced technology to streamline the tenant screening process and provide real-time updates.
Ready to find the perfect tenant? Contact PMI Realty Management NW today to secure your investment.
