As a landlord, you can sleep peacefully at night with a good tenant, trusting that the rent is paid and the property will remain reasonably undamaged. This is only possible when the tenant’s background check is done correctly. So in this article, I will explain to you how to do background checks on tenants in the right way.

It’s important to screen tenant thoroughly before allowing them to sign a lease if you want to make sure you’re getting the best and a trustworthy renter

why tenants background check is necessary

An intensive screening process guarantees that the potential tenants are dependable and appropriate for tenancy. Without legitimate screening, landlords run the risk of permitting destitute quality tenants to live in their property.

Being mindful of the past actions of a residents make you a more knowledgeable landlord and lets you answer primary questions such as:

Whom do you choose to live in your rental property

How to Do Background Check on Tenants? [simple but Effective Ways for You ]

1.financial Information/employment Information 

Finding out employment information of a tenant is very important as it helps you to understand what kind of job they do and creates an image. It helps you to understand if they are capable of paying rents from their current employment level or not.

According to a survey conducted by “TransUnion Rental Screening Solutions”, the number one issue among independent landlords in the United States is non-payment of rent. Around 84% of landlords in the study rated:

~ payment problems💰❌ as the top concern. 

Hence, it is very important to find out the current income level of a tenant.

Questions to consider :

questions to consider while doing background check

2. Personal information

personal information

Don’t forget to consult with the individual references on the starting application📃.

Whereas often one-sided, personal references can help a curious landlord by providing great pieces of information about the tenant. 

The correct questions may tell the investors about their character and manners

As a landlord you can also connect with the tenant’s closed ones to gather information.While friends and families may be biased towards the applicant, they have known the tenant for several years and are able to tell you about what they are like as a person. 

Asking personal questions may not be easy or a comfortable step. Make sure you act friendly so that the tenant also feels comfortable enough to provide details with you. This can also help you get an honest answer. 

Important factors to consider:

the important factor to consider while gathering personal information

3. County And State Criminal Records: 

criminal records

A tenant’s criminal background check can assist you to reply to questions to maintain a strategy from putting your property and your neighborhood at risk.

If you end up with a tenant that you have to evict later. Skipping this process would be a regretful step if the tenant gets evicted later. 

When looking into criminal records, it’s important to require an individualized approach to each candidate and consider whether or not an earlier conviction is relevant. 

This can be used for checking the  criminal records of a tenant.

Although a criminal record does not prohibit you from renting, when selecting renters, certain states allow such criminal records to be used as a deciding factor. 

If the state allows it, background checks may include information about any existing offenses against potential tenants such as  Sex Offender Registry Check

Questions to consider:

questions to consider during criminal records

4. Previous Landlord Reference

previous landlord reference

It is very important to take previous landlords’ reference in the background checking process. As the previous landlords are already experienced, they can provide you with the most detailed information on tenants previous relationship/bond with them and how well a tenant can fulfill  their duties towards rentals. Previous landlords are capable of providing you with valid information.

The best indicator of what kind of tenant they’re going to be with you will be their previous home and landlord (good or bad ). Well, understanding who their former landlords are is the first thing you need.

You can ask for their new and previous landlord’s names and contact details on your rental application. You should also try figuring out why the tenant chose your property to move in. 

Questions you need to consider are:

questions to consider during the landlord reference

5. Eviction History

eviction notice in okc

If the prospective tenant has recently been evicted, you may 

want to reconsider renting to the person. Alternatively, you can ask for more questions about the eviction.

 Eviction due to past bad behavior too often indicates future bad behavior, so knowing a bit more about who you’re would-be-tenant is can make a huge difference in ensuring you find the best renters. 

You may want to reconsider renting to the person if the prospective tenant has recently been evicted. Alternatively, you might ask about the eviction for more details. Too often, eviction because of past bad behavior reveals potential bad behavior, so learning a little bit about who you would-be-tenant is will make a big difference in making sure you choose the right tenants.

Evictions can cost landlords thousands of dollars in legitimate expenses and hours of time, so it’s helpful to see a prospect’s eviction history some time recently choosing to lease them your property.

Eviction records may contain some or more of the following information:

Recommended Article : How to evict tenants in Oklahoma

things to consider in eviction

6. Interview the applicant in person

interview

Interviews offer an opportunity for prospective landlords and tenants to determine the talents and character of the applicant match the needs and culture of the rental.

Confirm their identification. You should be careful if a tenant is very excited and wants the property right away. At least four to eight weeks before they need one, good tenants begin looking for a rental property. That is why it is important to ask yourself why you are so desperate for this tenant.

A tenant’s body language can tell you a lot about their personality. This can you get to the point where you can decide if the tenants are trustworthy or have lied about themselves or not. 

Important factors to consider:

Important factors to consider:

7. Obtain credit reports

client report

 A credit report will help you find financially secure and dependable tenants. You can see details on any foreclosures, bankruptcies, illegal detainer cases, and evictions on the credit sheet. Each credit company will provide the tenant with a credit score showing the applicant’s financial reliability.

A credit report is a statement containing details on the credit activity of tenants and the current credit condition, such as the history of loan payments and the status of their credit accounts. You can access credit reports electronically from the three major credit reporting bureaus like:

⭐ TransUnion 

⭐ Experian 

⭐  Equifax

by setting up an online account and following the application instructions.

→Request Credit Report Authorization: In order to legitimately collect the upcoming applicant’s credit records, the landlord must apply for permission to run a credit check. A landlord must analyze a tenant’s credit report, check the tenant’s credit score and provide a detailed financial summary. 

Important factors to consider while obtaining credit reports are: 

Important factors to consider while obtaining credit reports

8. Sign agreement 

A rent agreement could be a legitimately official contract between a landlord and tenant that traces the terms by which the tenant can lease property from the landlord, such as the term of the rent, the month-to-month lease amount, and support responsibilities.

The term can be used for any period, but the most common are month-to-month tenancies. The tenancy is automatically renewed for a new term every month, unless the landlord or renter terminates the tenancy by offering a written notice of 30 days. By obtaining the required written notice, changes to the terms of the rental agreement may be made.

But, before you take this step it is important to see if the tenant agrees to sign the conditions and doesn’t hesitate. As a landlord you need to make sure that a tenant understands all of these. Providing terms and conditions and asking a tenant if they agree with your conditions can make a change in their behaviour or decision. 

Important factors and questions to consider: 

Important factors and questions to consider:

9. Confirm the current rental period

When tenants lie about their current landlord’s reference, they also lie about the time in which they leased their current home. A great tenant background screening will help to distinguish deception on numerous levels to reduce the likelihood of approving a bad tenant.

If a prospective tenant is currently residing in a rental home that was rented out via a real estate brokerage on:

⭐centralized MLS scheme

 ➡️ There would be a record of them leasing out this home. As such, you can request that all records relevant to the current address of the tenant are reviewed by your realtor.

If the property was leased or sold within the past, your work is to cross-check the dates to see in case they coordinate up with the date the tenant claims to have moved in. Any disparities concerning dates will demonstrate that the tenant is lying to you.

Questions to consider:

questions to consider during confirming rental period

10.  Make A Decision

Go back to the very beginning where you started your entire process of checking a tenant’s background to determine whether a prospective tenant is a match or not.

In the end, as a landlord, you’re the one who knows everything about your property. You have the opportunity to be versatile as an independent landlord, but do not feel like you need to hurry the process.

Consider each point you’ve noted down or learned about the tenant and check if there are areas with flaws and if you could change them or not. If you can make sure that you’re able to convince a tenant regarding these flaws, you can move a step further.

You can also screen more potential tenants with a simpler screening process from “SmartMove” so that you find the best match without sacrificing any of the important steps. Choosing the right online tenant screening service implies that you can trust accurate information.

Websites such as “SmartMove” provide you with a tenant:

⭐credit report

⭐ crime report

⭐eviction check

⭐ report from Income Insights

⭐ResidentScore, so that you can feel more secure about your tenant decision.

Important factors to consider:

important factors to consider while making decision

On a background check, what looks bad? 

There are few items that can look bad during a background check during several periods of unemployment, lack of experience or schooling, educational record, criminal record, bad references or derogatory relationship with previous landlords.

Will background checking help you discover reliable tenants? 

Yes, a good background checking will help you discover reliable tenants. It depends on how carefully you’re following the procedure. If you’re just going to look at a few points, the results may not be so good. Hence, you should be careful. 

How many years back can landlords go during background checking of tenants?

 Information is deemed redundant if, for negative information or for bankruptcies longer than 10 years, it is more than seven years old. For a landlord to have a blanket policy of refusing to rent to someone with a criminal record may be a breach of the Equal Housing Act.

How financially stable should a tenant be ?

A tenant should be stable enough to keep the property undamaged, pay rents on time and capable of taking the responsibilities of maintenance and repairs.

Do you need professionals to do a tenant background check?

You can background check on a tenant by yourself if you’re confident enough to do it. If not, you can always hire reliable property managers who are well experienced in this field.  

Does a good credit score automatically mean that the tenant is great?

No, you should never hire a tenant based on their credit score only. A tenant is great when he/she meets the entire requirements needed for a good background checking process. You should also make a decision based on their manners and body language

Can you analyze all of the tenant’s complete criminal records by using a single source?

No, there are several datas that can be collected. For example: 
The Equal Credit Reporting Act (FCRA) requires criminal convictions to be reported for seven years following release from prison for background checks. It is possible to record criminal convictions as far back as the employer wishes to go.

Conclusion: 

As a landlord, the screening process is not an easy job. You have to give your property to someone who’s capable of handling your property. All these steps mentioned above are the most effective ways to do a background check on a tenant and find the best tenant for your property. 

author

Author

Scott Nachatilo

Hi, I’m Scott Nachatilo and I own a property management company in Oklahoma (OKC Home Realty Services, LLC). We help landlords and real estate investors to manage their property in OKC