The Value of Performing Background Checks on Potential Tenants

And I’m always baffled by this. You wouldn’t, for example, give the keys to your car to some random stranger and just hope that they take care of it. But your house is ten-twenty times the value of your vehicle, and yet sometimes I’ve seen clients just give over the keys before they even have a signed contract.

We have to be more diligent in a business transaction to handle things in a businesslike manner. One way to do that is to do a thorough check of all of the Tenants, and really, all of the adults that are going to be living on the premises. This starts with an Application that lists all of the adults that’ll be there.

If you need an Application, Contact us with your request. Your Lease can exclude anyone not named as an Applicant or anyone not disclosed in the Application.

For example, sometimes we hear, “I’m the one signing the Lease. And my mom, my sister and her boyfriend are going to live with me, but I’m the only one who’s going to sign the Lease.” And for whatever reasons Landlords will allow that.

It’s a bad idea because sometimes a person who signs the Lease ends up not even living at the premises. That’s a huge red flag.

The reason this person is signing is because the other three adults have terrible credit, have a terrible rental history, or have no stable income. So, all of those things are bad and should be handled before ink ever touches your new Lease.

Next, run a background check to find out
·        criminal activity. It’s definitely something you want to know beforehand;
·        a person’s credit;
·        if anybody’s ever had an eviction against them in the past.

A common tactic is for the “Bad Tenant” to avoid any Application or Lease. It’s necessary to check all of the adults because the following scenario can happen. “Grandma” will come in, and Grandma’s living with A and B. But A and B are the ones who’ve gotten themselves into trouble.

So, Grandma signs a Lease in her name, she’s the primary, and often when they’re trying to hide, she’s the only one who signs the Lease because the other two people, the ones who “work and pay the bills,” are just not very good at it. That’s why, they need Grandma’s credit in order to rent.

So, you will do yourself a big favor by knowing the criminal background history of all the adults that are going to live on the premises by doing a check for any evictions.

You also want to check the creditworthiness of your Tenants. If they have terrible credit that means that they’re not very good with money. This indicates a higher probability that these Tenants will pay late or not at all.

In such a case, you might consider charging a higher deposit or simply declining to rent to these individuals. These three things are going to help you tremendously.

One other thing that I strongly recommend is that you verify employment. Verifying employment and the length of employment at the particular employer is going to give you a big indication of the reliability of this person as a viable Tenant.