Choosing the right tenant is one of the most important decisions you will make as a landlord. Good tenants make a landlord's life much happier.
It's not always easy to spot bad tenants right away, and likewise, it's not always obvious which candidates will work out the best.
Many landlords choose to set threshold qualifications first, before they advertise a vacancy. For instance, you may choose to set a specific range for income. You may want the applicant's credit check to reflect a particular score. In addition, you will need to think about your specific house rules -- the policies, like no-smoking or no-pets, that you wish to enforce.
Having those criteria established before you advertise the property for rent will help you when it is time to start taking phone calls from applicants.
Eliminate those candidates who do not fit the income requirements, or who may not be able to abide by your rules.
From there, you will have to decide whether to accept applications one at a time, rejecting those first in line until you reach the acceptable candidate, or you can collect a number of applications and choose the most likely prospects from the information on the rental applications.
Either way, before offering a lease to an applicant, it is crucial to do a tenant check. That is the only way you will know for certain if the applicant is who they say they are, and if their past is what they say it is.
With the credit report in hand, check to see if the applicant has displayed reckless behavior. A red flag or low score means there are serious issues, perhaps missed or late payments on installment debts like a lease agreement. Or, maybe the candidate is over-leveraged on credit cards, has a judgment against them, or has recently filed for bankruptcy.
Why is this information relevant?
Because humans are creatures of habit. A person who has made bad financial decisions in the past is likely to repeat the pattern. You don't want that to be at your expense.
You may want to avoid a candidate with a previous eviction. It may be necessary to run a national eviction report to catch a deceptive applicant who is trying to hide a previous life and address. Evictions are a serious problem, because that means the tenant broke the lease, or the law. Again, history repeats itself, and you don't want to be in line to become the next victim.
A tenant's prior criminal behavior is a concern for landlords. That's because there may be liability for the landlord who rents to a tenant who is a risk to other people. Lawsuits for personal injury are stressful, lengthy, and seldom end well for the rental property owner who decided not to run a tenant check that would have revealed a criminal background.
Identity theft is on the rise, and landlords are not immune to the problem. It is important to always check the applicant's photo ID, recording it if possible. Also, check the Social Security number from the rental application against the credit check and other reports. Be wary if something seems unbelievable, like a very young person with a lengthy credit history. You can also check the SSN against the SSN fraud database, available with Tenant Alert tenant screening reports, to see if this candidate is not who you thought they were.