Renting a property can be a great way to make extra cash and an excellent investment for your future. Managing any sort of investment, however, always requires some thought and work. Being a landlord is no different. Doing your due diligence before you accept a tenant can save you a lot of grief later on. It is absolutely crucial that you thoroughly vet rental applicants before letting them live on your property.
Why do you need a screening?
A bad tenant can do far more damage than just getting behind on some rental payments. A troublesome tenant can damage the property or cause issues with other renters or property owners nearby. Evicting a tenant who won’t leave can be costly and time-consuming. All these issues can come back to bite you later, and they’re why you need a good tenant screening process.
What should a screening cover?
It’s not too difficult to get a tenant screening and you can even get a tenant screening report free if you know where to look. All good screens should cover a couple of important areas, including a potential tenant’s credit, any previous issues as a renter, and criminal record.
You need to know a potential renter’s credit history so you know how likely it is that they will be able to afford the rent. It’s also important that you do more than simply look at the final credit score number. You want to look at how much debt the person is carrying, but some debt is more significant than others.
Enormous credit card debt could indicate someone with a spending problem. Recent payoffs of large credit card debts could mean the person is basically financially responsible but had to use their card for an emergency at some point. Certain types of debt are not really a concern, so if you see some remaining debt from loans for accredited liberal arts degree programs or medical payments, these aren’t as worrying as credit card debt.
Previous rental history
A previous rental history can go a long way towards telling you what kind of tenant a person will be. A good report will show you how likely it is that a potential tenant is going to make payments on time and whether they have had any issues with this in the past. You’ll be able to see whether a tenant’s history includes unpaid rent that someone is trying to collect on.
You’ll also get an idea of how a potential tenant has interacted with landlords in the past and how well they take care of other people’s property.
This should be a no-brainer, because a criminal record check is essential to protecting yourself, your family, your other tenants, and the whole neighborhood. As with the credit check, however, it’s important to think about what you’re looking for.
America incarcerates a higher percentage of its population than any other society on earth. The United States only has 5 percent of the whole world population, but 25 percent of the world’s prisoners. This means it is not unusual for you to turn up a hit in a criminal record check. Always review on a case-by-case basis and look at whether any criminal record has application to this situation. A couple of minor traffic violations is probably nothing to worry about. Something violent is.
What does a screening give you?
In the end, a tenant screening gives you far more than just information. It gives you clues about how trustworthy people are and how likely they are to keep working and paying rent. It gives you valuable information that can protect you and others from a potentially violent situation. Most of all, it gives you peace of mind. That’s something you can’t put a price on.