Are you aware that around 36% of Americans rent instead of own their homes?
Buying a rental property can be a brilliant investment, but you need to have respectful tenants to maximize your income. From paying rent on time to avoiding property damage and not causing conflicts with other tenants, there are all kinds of things that renters can do to make your job as stress-free as possible.
The key to finding reliable renters is to complete an extensive tenant background check. Keep reading so you can understand the top five things to look out for during this screening process.
1. Do a Tenant Criminal Background Check
The first thing you should do when you're evaluating potential tenants is order a criminal background check to see if they've had any legal issues in the past. The last thing you'd want to do is move forward with tenant placement and endanger the other tenants in your community.
Depending on the nature of the crime and how long ago it happened, some landlords are willing to be flexible with applicants who have a criminal history.
2. Contact Their References
It's always wise to request references from applicants and give them a call. From employers to mentors and past landlords, there are plenty of people who can give you a better idea of someone's character.
While friends and family are still valid references, understand that there will be a bias so you shouldn't consider those as much as professional references.
3. Look at Job History During a Tenant Screening
Trustworthy tenants have a history of stable employment. People who stay at the same job for years at a time show that they're loyal and hard-working.
If you're renting to young adults who don't have a long employment history, then you can consider other qualifications like internships and other projects.
4. Check Out Their Credit Score
Even if a person has a job that pays them enough to afford rent, this doesn't mean that a tenant is careful enough with their money. Credit card debt, loans, and other financial issues can spell trouble for landlords.
The good news is that a simple credit card check can tell you if a person can handle their money well.
5. Ask About Their Rental History
Some landlords wonder why it's useful to ask potential tenants about their rental history when this information is available in a background check. You can think of this question as a type of test.
If applicants lie or leave out details about their rental history, then you can know right away that something was wrong. It's safest to avoid applicants with evictions and sporadic rentals.
You Should Never Rush Your Tenant Background Check
A thorough tenant background check is an essential step landlords must take before signing any paperwork. If you follow this outline, then you can lower your risk.
Do you want to take the stress out of screening tenants? If so, you should hire a property management company. Contact us if you own property in the San Diego, California area.