Is your tenant screening process up to scratch?
When you're investing in rental property, it's an investment into your future security. These are assets that will provide passive income, so it's natural to want to protect them. But, if you don't get the right tenants, there's a chance you're putting your properties at risk.
That's why a tenant screening process is vital! Keep reading for these 5 things to look for when doing tenant background checks to get you started.
1. What's Their Credit Score?
Looking at credit scores gives an initial idea of if a tenant will be able to pay rent on time. A tenant's credit score shows their current score and any debts they have outstanding. It also shows their payment history.
If you're dealing with young renters though, bear in mind that might not have built up a good score yet due to age. There are others with lower scores who will be willing to take extra steps to prove they're reliable. Don't rule them out right away without going through your checklist.
2. What's Their Employment History?
This is one of the most important items on your tenant background check checklist. Verifying current employment and employment history is another indicator of ability to pay.
Wondering how to perform a background check for employment? Call the tenant's boss for a reference and to verify they work there, it's easy. This will tell you they have a current job and stable income.
3. Do They Have Proof of Current Income?
Tenant background check companies say it's one of the best tenant screening tips. You should check pay stubs or tax returns to make sure they're earning at least three times the rent each month. If they don't have this to show, ask them to prove it with savings or bank statements.
4. Can They Provide Landlord References?
A lot of landlords skip it, but you should try to get references from one or two previous landlords. You can ask them questions about the reliability of the tenant.
Ask things like, "did they pay on time?" and "did they take care of the property?". Asking a previous landlord their experience of letting out to a tenant is a good indicator of what to expect. If you've gone to the effort of renovating your rental, you want someone who will look after it.
5. Why Are They Wanting to Move?
For most applicants it'll be simple: they're moving for a new job or to have more space or their lease ended. But, it's in your best interest to find out if they're leaving because of something more sinister like:
- An eviction
- An altercation with current roommates or landlord
- They're impulsive and move often
In an ideal world, you want a hassle-free long-term tenant. At the least, you want someone to stay for their lease period, drama-free. Tenant history will give a good idea of how they usually end rental agreements.
Tenant Background Checks Made Easy
So, there you have it! Now you know what you should be looking out for in your tenant background checks.
You want to find a long-term tenant that will respect your property, take care of it, and pay on time. Tenant background checks provide you with the best chance of finding such a tenant. You've got a right to be picky about who you're renting to.
You also have the right to a great property manager to help find the best tenants, so contact us today. At Home River Group Fort Lauderdale, we've got the local knowledge and experience to suit all your rental needs.
