Understanding how to perform a background check on a tenant is a critical part of placing the right tenant in your property. You have to balance the information you collect with all fair housing laws and requirements. It’s essential to have a consistent process in place so that every applicant is treated equally.
Establishing Rental Criteria
When you have a written rental criteria, prospective tenants can decide whether they are likely to be approved for your property before they even apply. Let them know what you’ll be looking for and what will be required in order for them to lease your home. Your criteria should include income requirements, credit standards, and rental history. This will help you comply with fair housing laws because you’ll be able to provide this written criteria to anyone who wants to apply for your home. It establishes how you screen every potential tenant.
How to Check Tenant Credit and Background
If a tenant has reviewed your criteria and decided to apply, the screening process begins. Pull their credit report and run a criminal background check. The credit score isn’t as important as what you find in their credit history. Look for write-offs, accounts in collection, and debts that are overdue to other landlords or utility companies. When you’re looking at criminal histories, check every detail, including the terrorist database. Not all individual landlords have access to these resources, so work with a property manager or a screening company to access the necessary data.
Reviewing Employment and Income
Verify the last three years of employment. You’re looking for a stable tenant who spends a reliable amount of time at each job. If you have an applicant who just got a job and only stayed at previous jobs for a month or two, you might want to think twice. Ask for bank statements and pay stubs to confirm that the tenants earn at least three times the monthly rent in income. You’ll also want to have a copy of their government-issued photo ID so you can be sure they are who they say they are.
Checking Landlord References
Talk to current and former landlords. You’ll get the most reliable information from landlords they aren’t currently working with. Ask how they behaved as tenants, and whether they paid rent on time, left any damage behind, and followed the terms of the lease. You want to know if they gave previous landlords a hard time.
Finally, discuss any pets and make sure their pets comply with your pet policy. Get a picture of the animal and make sure that if it’s a dog, it’s not on the dangerous breeds list. If you have a tenant with a disability, you may need to make modifications such as ramps, or you may need to permit service animals.