Before you hand the keys to one of your largest investments over to a perfect stranger, you want to make sure you know a little something about the person who is moving in. A background check is a standard part of any leasing process, and most prospective tenants expect that you’ll be digging around into their financial, employment, criminal, and rental histories.
Today, we’re sharing some of the most important elements of a background check so you can be sure you’re doing a thorough and fair job screening your tenants.
National versus Local Background Checks
Make sure you’re conducting a national background check. Checking in with the local police department for priors may be part of your tenant screening process, but it shouldn’t end there. Tenants are more mobile than ever, so it’s important to take a broad look at a resident’s background. When you’re checking criminal histories and eviction records, make sure you’re doing a comprehensive search that covers all 50 states. To really be thorough, you’ll want to check registries like the sex offender registry and the terrorist database. You cannot be too careful when you’re conducting background checks.
Employment Background and Income
A full employment check needs to be part of your background investigation. Be sure your prospective tenants work where they say they work, and don’t rely on the contact information they provide. It’s easy enough to get the contact information for a specific company online. Call employers and verify position, length of time the applicant has been employed, and salary. Sometimes, employers are hesitant to give out salary information. In those cases, ask the applicant for a copy of pay stubs or tax records.
Checking Rental History
Tenants who have been evicted in the recent past are a huge risk, and you won’t always find evictions on a general credit report. Make sure you’re checking other resources. Talk to former landlords and property managers as well. Ask detailed questions so you can be sure you’re talking to the actual property owner or manager. Tenants with a bad rental history are likely to give you the phone numbers of friends or family members. Find out if they paid rent on time, had any pets, took care of the property, and moved out according to their lease requirements. This type of background check is often ignored, but it’s very important. Simply asking a former landlord if they would rent to the tenant again will tell you a lot.
Pay Attention to Fair Housing
Tenant screening is crucial, and background checks need to be thorough and substantive. They also need to be legal, fair, and consistent. Treat every application the same, and hold each applicant to exactly the same standards. Do not confuse service and support animals with pets. Check out the local, state, and federal fair housing laws so you know how to avoid expensive errors.
If you don’t have the resources or time to conduct a full-scale background check, ask for help from a Southwest Michigan property management company. Placing the wrong tenant can be costly and stressful.
We’d be happy to help. If you need help with a background check or even additional advice, please contact us at Real Property Management Southwest Michigan.
We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.
