Almost three million households in the U.S. get evicted every year, highlighting the importance of background checks.
Screening tenants is essential for finding trustworthy tenants and reducing the risk of eviction or vacancy rates. But if you have little experience with background checks, you could make a costly mistake.
Sounds like your situation? Don't worry, we've got the answers you're searching for. Here's how to conduct a thorough tenant background check.
Get Written Consent
Whether you're handling New York or Fort Walton Beach real estate, landlords must get written consent from the applicant. Otherwise, it goes against federal law and you could face a penalty.
The consent form includes the applicant's name, recent address, and date of birth. It should also state the potential tenant is aware of the background check, so it's legally binding.
Gather Information from the Applicant
In the second step for tenant screening, landlords must gather information from the applicant.
A critical one is the tenant's criminal history as it determines whether they'll be a reliable renter. Check whether the candidates have any recent convictions or arrests as a precaution.
Landlords should also ask for the applicant's rental history. This shows the candidate's ability to pay rent on time and care for the property. Note down any complaints from previous landlords or evictions as that could be a deal-breaker.
Next, contact the applicant's employer. Ideally, the tenant has run a rental valuation and has figured out how much of their paycheck will go towards rent. In the background check, look out for gaps in employment or any inconsistencies as it could mean they're unable to pay on time.
Lastly, check the tenant's credit history. This nifty metric determines how likely the applicant is will pay their monthly rent. To avoid future issues, note down any late payments, debts, and even bankruptcies.
Hire Professional Screening Services
Property management is overwhelming, which is why you should outsource your needs.
Contact a local management company because they have experience and understand how to spot red flags. This should be a local company as they know the current market inside out. For instance, if you manage real estate in Walton Beach, find a company that handles property there for peace of mind.
A bonus is that the company can conduct a rental analysis to ensure you've correctly valued your property.
Review the Reports
Once completed, the property management company will send over the latest reports. This gives you the option to approve or deny the application. If you notice an issue or have questions, contact the company and they will do further digging.
Our Latest Tenant Background Check Tips
Now that you understand how to run a tenant background check, it's time to start your search.
At All American Realty, we have years of experience screening tenants in Fort Walton Beach, FL so landlords can make the right decision. And, in the worst-case scenario, we will handle any evictions to protect your property.
If you're interested, contact us here to chat with a member of our team.
