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Top 3 Reasons Landlords Should Thoroughly Screen Tenants

A bad tenant can drain your profits and hurt your business faster than almost anything else in the property rental business. Unfortunately, many landlords end up with them because they trust their instincts more than the facts. Or they simply want to rent out their property quickly and don’t take the time to screen their applicants. Both of these can be risky mistakes for several reasons. 

To protect yourself

As long as you’re holding up your end of the agreement, you should be reasonably safe from lawsuits. But if you don’t screen your tenants, you could still be facing a risky situation. For example, if you’re going by your gut instinct when choosing renters, you could inadvertently find yourself in a discrimination suit. You may have had the best intentions, but if applicants believe you passed them over because of a reason such as race, sex, disability, family status, or religion, they might have a case against you. 

A background check could also protect you from lawsuits from other people. If someone you rent to ends up stealing from them or committing some other crime against them, you can clear yourself of the liability if their criminal history was clean. In other words, if you run a criminal history check and come back with nothing, you can’t be held liable for their actions. But if you rent to someone without checking, they could try to prove that you knew about the crimes and didn’t let anyone know.

You can begin your research with a totally free people search tool. Such tools search a name against millions of databases to show you mugshots, arrest records, phone numbers, previous and current addresses and so much more. This information serves as an initial screening to ensure the potential tenant is not registered as a sex offender, is telling the truth about their identity, and not hiding a criminal past. Using a resource of this nature can be an excellent preliminary step before moving onto a deeper dive into the specifics of a tenant using landlord screening tools and online applications. 

To protect your property 

With tenant screening online, you’ll be able to find out whether an applicant has a criminal history. And while this isn’t always an indication of a bad renter, it can help clue you in to patterns of bad behavior. However, if you keep everyone with a criminal record from renting, you may not be able to secure an occupant.

Crimes such as speeding violations and parking tickets probably don’t mean the person will be a bad renter, and these are too common to use it against them. On the other hand, if your applicant has a history of theft, destruction of property, drug abuse, violence, or other more serious crimes, it could be a good sign that they’re not respectful of other people. Not only would renting to them possibly risk your property, it could also risk the safety of your other tenants or people in the area. 

To protect your income

Your applicants probably don’t need perfect credit, but you should look for a few things to help you make your decision. For one thing, recent car repossessions, foreclosures, or credit card charge-offs can indicate irresponsible financial behavior. Or they could mean they’re going through a difficult time. Either way, it could mean late or missed rent payments and costly eviction fees, all of which affect your monthly income. 

Certain credit mishaps are deal-breakers for a lot of landlords, but you’ll have to make those decisions yourself. For example, you might be looking for a certain score that lets you know the applicant probably wants to do what they can to keep it. It’s fairly common to require a credit score of 620, but you might also require that they have no evictions, bankruptcies, or foreclosures on their report.

Another important part of the background check is verifying your applicant’s income. Most landlords require that tenants bring in at least three times the amount of their monthly rent expense. This doesn’t guarantee payment, but it does give you some peace of mind, knowing that they should be financially able to pay their bills.

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