No matter what kind of rental you own or how many, every property owner wants to find the best tenants for their properties. Running a background check on your applicants can help you do just that, but if you’ve never screened a tenant before, you may be curious as to what a screening can really tell you. To help answer that question, let’s take a closer look at what a background check can tell you about your tenants.
Part of your tenant screening process should consist of running a credit report check, as it can tell you a lot about how tenants have handled their finances in the past. A credit report will focus on three categories of information: credit history, public records, and inquiries.
Inquiries will tell you if anyone has requested the tenant’s credit report in the past. Public records will give you a list of reported eviction, bankruptcy claims, civil judgments, and tax liens. Their overall credit history will give you information about their bank accounts, mortgage, loans, accounts, credit card limit, and their overall pattern of payment from the last two years. While you do not need to take this information at face value, it can give you a better idea of a tenant’s financial history and habits, as well as their sense of responsibility and decision-making skills.
While a credit check will tell you if the tenant has experienced previous evictions, it won’t tell you why they were evicted. Part of your tenant screening process should involve speaking with past landlords, HOAs, or dorm supervisors. Not only will this give you a good idea of who they are as a tenant and how they may act, but if they do have previous evictions, you can find out why. People go through hard times, and it’s not uncommon for good people to make bad decisions, so finding out the full story will help you make a more informed decision.
Your tenant has to be able to afford to stay on your property. Otherwise, you both will be in for a frustrating experience. Along with asking your tenant about their rental history, ask them about their employment history and how to get in contact with previous employers. A boss or supervisor can tell you how much they make per hour and how many hours they generally work so that you can do the math to get their overall income. They can also tell you what their behavior is like at work and their overall level of professionalism and responsibility.
Fortunately, most people don’t lie on their tenant application, and the information they give you will usually hold true. However, running a background check does help you corroborate that information and ensure its validity. If a tenant lies to you about their name, address, and contact information, that is a big red flag, and you should speak with the applicant about why the information is incorrect.
Now that you know what a background check can tell you about your tenants, let Excalibur Homes do the work for you! We provide property owners and landlords with professional real estate services and can handle background checks, move-in inspections, evictions, and more.