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The ABC's Of Conducting Tenant Background Checks

May 30, 2008
It is amazing to me how many people are shocked when they are denied a lease after their landlord conducts a background checks. It is also surprising at the lack of information some landlords are regarding what is permissible in a background check.

The basic principle behind conducting a background check is that a landlord needs to know that potential renter is dependable and trustworthy. For example, they need to know in advance whether or not the person that they are planning on renting to will pay their rent, maintain the property, and doesn't have a history of illegal activity that could potentially be carried out on their property. This is all very important information that a landlord must consider before signing a lease with any client.

One of the most important pieces of information required in a landlord's background check is to obtain a credit report. This may seem excessive; the point is for the landlord to know that the tenant reliable about paying their bills and their debt ratio is not so excessive that that they will be unable to afford the lease payments.

Regrettably, there are circumstances which cause a person to have a less than stellar credit report without it being their fault, an example is a divorce. Some landlords take these issues into consideration, others will not.

Many landlords routinely conduct a criminal history background check on their tenants. This additional protection is paying positive dividends in not only protecting the property; it is also increasing the level of security for the remaining tenants on the property. The scope of criminal background checks can vary, we see this routinely limited to felony convictions and activities which could place the property or other tenants in potential danger.

A Tenant Screening background check includes checking the renter's employment history and their prior residences. If they have a history of fragmented employment, or tend to loose jobs on a recurring basis, or lack the current income to pay their bills, these are red flags that renting to them may not be a sound decision.

Something else to pay attention to is the frequency the potential renter changes residences are also indications on whether or not he would be a good future renter.

- Did they violate the terms of a prior lease agreement?

- Where they evicted?

These types of negative indicators should be enough to sway a landlord's decision to decline renting to this applicant.

The most important purpose of conducting background checks on potential tenants is to ensure that the property owner can protect their investment, and their wellbeing of the current tenants. When these checks are returned favorably and the landlord is able to determine the basic character and appropriateness of a prospective tenant, the benefit of this action far out ways the small fee to have it completed.

Any landlord not currently conducting tenant screening background checks on their potential tenants is playing financial Russian roulette.
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A hand shake and a gentleman's agreement may have been sufficient with
our Grandparents...but not today. Trust but always verify... Choose the
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