Owning investment real estate is a lucrative way to build wealth. Renting out to quality tenants means that you have another form of steady income. However, renting out to the wrong tenants can lead to frustrations and lost revenue. Learn about the tenant screening red flags to look out for as applicants inquire about your rental.
Part of your tenant background screening process must be running a credit check. Look for candidates with a high credit score. These applicants typically show a history of paying their debtors on time. Poor payment history, Bankruptcies, liens, judgements and other collections will all be present on the credit report. Allow this tenant screening strategy to guide your decision.
Verify if the applicants have a criminal history by purchasing a National Criminal Search with a vendor such as StarPoint Screening. As a landlord, you have a right to know if a person has a criminal background. Analyze the tenant background screening very carefully so that you don’t overlook any details. Serious charges, such as robbery or assault can appear as well as minor infractions, including traffic tickets. Multiple violations can mean that an applicant is prone to trouble regardless of the charges. Remember to always get the applicant’s signed authorization before running a criminal background check or credit report.
Any rental application should ask for an employment history and contacting those current and previous HR departments to complete a reference check is always a good idea. You want to be able to verify your applicant’s hire date, term date, salary, and position. Asking for a W2 or the last two paystubs is also a reliable way to verify salary and employment.
Completing a nationwide eviction search of you tenant is an inexpensive way to find out if any previous landlords, property managers or apartment complexes have had any issues with your applicant and had to take them to court. Eviction searches typically are under $10 and can save you thousands if you have to evict that tenant in the future.