A lot of people look good on paper. Just ask anyone who has suffered through a blind date. Regardless if it was a set up by friends or a match.com hookup, somebody was attracted to somebody because of what they saw. We’re not just talking looks, though. It could be a person’s education, job, charity work or hobbies. But when you meet them in real life, the facade cracks.
Landlords, too, can get hoodwinked by prospective tenants who look decent on paper, but when you look a little close, are terrible prospects. The thing is, though, you need good tenants to make money on your property investment. You need someone who is trustworthy and pays on time. You want someone who acts as a good citizen and respects the law. You want someone with a proven track record of respecting their residences. How on earth do you declare someone a good fit for your property if you can’t uncover this information?
You can. One of the most effective tools landlords have at their disposal is background checks. From credit checks to criminal background reports, Consumer Reporting Agencies (CRAs) like Active Screening are skilled at researching, collecting and providing you the right information you need to make an educated tenant decision. When you work with a nationally-accredited screening agency like Active Screening you are getting a team of experts who understand and comply with the federal Fair Housing Act of 1968, Fair Housing Act Amendments Act of 1988 and the Fair Credit Reporting Act (FCRA).
Here are some key pieces of advice to help you secure terrific tenants:
Start With a Thorough Application – This is, essentially, your first date with a prospective tenant. Think of it as what you’d like to know or see on a date’s online profile. You can create your own application but there are plenty of templates available on the internet if you do your research. Make sure to ask for current contact details, the names and addresses of current and previous landlords and employers, social security number, driver’s license number and bank account numbers for credit check. Here, says moneycrashers.com, are some suggested questions you should ask and information you should obtain from an application.
• Current and previous employers – How long has the tenant been at their current job? Has he or she switched jobs multiple times in the last few years?
• Current income level – Does the tenant’s income cover the rent plus normal living expenses?
• Financial information such as bank accounts and credit cards, including balances and minimum monthly payments, help to provide a financial “picture” for a prospective tenant and offer insights into his or her ability to pay the rent each month.
• Contact information for previous landlords should be listed with previous addresses, amounts of rent paid, and reasons for leaving. Are there any gaps in rental history, or are the names and contact inf0rmation for any landlords missing from the application?
• Lifestyle information such as number and size of pets and number of occupants should be included on the application.
• Personal references should include names, length of acquaintance, and phone numbers.
Request Permission to Run a Credit Check – A credit check will tell you about your prospective tenant’s credit history, including foreclosures, bankruptcies, evictions and other credit-related public record events. You may also want to double check a person’s credit score; the higher the score, the better.
Whenever you seek to obtain information on someone’s credit or background, you are bound to comply with the FCRA. For more information on rules and regulations you must follow, read this Active Screening post. The biggest thing you need to remember is to keep your consent forms separate from applications and avoid any other verbiage on them.
Run a Background Check – If you haven’t collaborated with a screening agency by this point, you’ll want to when it comes to running background checks. It’s the single best way to learn whether an applicant is a felon or on the sex offender list, for examples. When you hire Active Screening for your background checks, you can rest assured that our boots-on-the-ground researchers are checking county, state and national records to get you the most current and accurate information you need to make an informed decision.
Check Their References – Don’t just take their word for it. Ask for, and for goodness sake, call their references!
What other tips do you have for our readers? Share them below! And, if you have a tenant who needs screening, don’t hesitate to call one of our team members at 1-800-319-5580.