The Importance of Checking Out Your Prospective Tenants’ Histories and How to Do It

by Carson BuckNovember 14, 2018

Why and How to Do a Background Check on Your Future Tenants

Owning an investment property is a dream held by many people these days. The thought of a serious investment vehicle paying for itself through monthly rent checks as it happily generates passive income and feathers the proverbial nest is a tantalizing one. Unfortunately, there are a few very real ways that the dream can sour, and chief among them is a bad tenant.

A bad tenant can ruin your relationship with your neighbors (or your HOA), and they can cause damage to your property through misuse or neglect. Additionally, squatters’ rights are a very real thing in many areas, and removing a bad tenant from the property can be next to impossible. In many ways, far more difficult than not renting to them in the first place.

With all that in mind, read on to learn more about the why and how of screening prospective tenants, in case owning an investment property is more than just a dream of yours.

tips for prospective landlords

All The Reasons Why You Should Thoroughly Vet Any Prospective Tenant

To double-down on everything mentioned above, there are many reasons why you should screen any prospective tenant when you own a rental property. First of all, doing your due diligence can prevent problems before they ever happen. Knowing that you’re selecting the best tenant from your list of potential renters can also give you piece of mind and keep you from having to deal with things like:

  • Late Rent Payments
  • Missed Rent Payments
  • Failure to Dispose of Garbage or Other Waste
  • Failure to Notify Landlord of Maintenance Issues that Could Lead to Costly Damages
  • Subletting Without Permission or Notice
  • Over Occupancy
  • Drug Trafficking, Processing, or Manufacture
  • Neglected Maintenance of Property
  • Smoke Damage
  • Water Damage

This is only a partial list of everything that can go wrong in a landlord/tenant relationship.

tips for prospective landlords

How to Screen Prospective Tenants

If you’re not going to farm the screening process out to a professional tenant-screening service (and there are several to choose from), then you’ll want to begin your screening process by having your prospective tenants fill out a complete rental application. You can find free and low-cost examples available for download online, in many cases.

Once you have the prospective tenant’s information, begin by checking their references, as you call their prior landlords and employer. Go the extra distance and run a credit check to look for unpaid accounts, or a history of challenging financial behavior. Lastly, consider running a full background check using the services of an investigating company.

A Word About Profiling, the Law, and the Importance of Getting It Right

If you choose to interview your prospective renter face to face (and it’s highly recommended that you do), just make sure you are aware of the laws regarding tenant rights and landlord responsibilities in your state and municipality.

For example, it is illegal (on a federal level) to discriminate against prospective tenants based on their national origin, race, sex, religion, disability, or family status. Many cities and states have even stronger laws protecting citizens from discrimination. Know what the law is in your area, and obey it or risk severe consequences in some cases.

tips for prospective landlords

Landing Your Dream Tenant

Screening prospective tenants has never been easier than it is right now, so there’s really no reason not to do it. Remember, whatever the effort, the potential risks incurred by renting to the wrong tenant far outweigh them, or the expense of making a few phone calls and running a credit check. Protect yourself and your property investment by arming yourself with information before choosing your next tenant.

Shares 0
About The Author
Carson Buck
Carson is a real estate agent based out of Phoenix, Arizona. Carson loves data and market research, and how readily available it is in today's world. He is passionate about interpreting these insights to help his clients find and buy their perfect home. Carson got into the real estate industry because he loves the feeling of handing over the keys to a new home to happy clients. In his free time, he works on his backyard bonsai garden and spends time with his wife, Julia.