For many property owners, going through the process of conducting a background check on prospective renters may seem like just one more hassle and/or an additional (potentially unnecessary) cost. Many property owners will rent out a furnished property to someone because they “have a good feel” for the person or liked them upon their initial meeting. Good feelings aside, however, as a property owner, you honestly have no idea who a prospective renter really is and, before you trust them with your property, you might want to consider the following before foregoing a background check:
- Running a background check protects you as the landlord. Not only does having a thorough background check on all potential renters provide you with information about credit and any eviction history, but a background check provides you with legal documentation (as required by the FCRA and the Fair Housing Act) for turning down a potential tenant. It simply isn’t enough, legally, to say that you don’t have a good feeling about a particular renter; you need to give them concrete reasons that can be backed up by their credit report and/or rental history for rejecting their application.
- A background check will verify a potential tenant’s employment status and income. It’s not enough that a renter can come with cash-in-hand for the first month’s rent and deposit. As a landlord, you want to make sure that they’ll be able to pay their rent on time and in full every month.
- Most background checks also include a criminal history report. Most property owners do not want someone with a criminal record, particularly a recent or violent one, staying in their property.
- You will receive the contact information for former landlords/property managers of the prospective renter. Asking just a few pertinent questions of former landlords will help to give you a better idea about the type of tenant a prospective renter will be.
- Running a background check helps you minimize your risk so that you can maximize your profit. Limiting your rental properties to properly screened tenants who have passed your application process is the best way to protect your investment and your liability. With a good, stable tenant in place, you can build your profits and rest easy knowing you’ve protected yourself and your property to the best of your ability.