Property Management Blog

How Can You Conduct a Tenant Background Check?

How Can You Conduct a Tenant Background Check?

There are 2,654 new renters every day. The demand is high enough for landlords to fill their properties, but that doesn't make tenant placement easy.

Most landlords screen at least two applicants per property. A thorough tenant background check reduces turnover, increases cash flow, protects your other tenants, reduces your liability, and gives everyone peace of mind.

Read on to learn how to screen tenants.

Send the Paperwork

Before you do a tenant background check, make sure that you have the right paperwork. You'll need a form with the applicant's written consent and their:

  • Name
  • Date of birth
  • Address
  • Social security number

Send this information out to an approved service. The checks should be returned within a few minutes. A manual review may be required and takes 24 hours or longer.

You'll also have to pay for the service. In certain states, you can have the tenants pay the fees.

Review the Results

The results of the tenant background check will display the applicant's identity and contact information and the date and time the check was performed. Put this up against the information the applicant gave you and make sure they match.

You'll also get a full overview of what checks were performed. These could include:

  • SSN trace
  • Evictions
  • Sex offender search
  • Global watchlist search
  • Criminal background check
  • Credit history
  • Rental history

The Fair Housing Act requires that screening become a standardized part of your process for finding tenants. You can't screen one and then not screen another or discriminate against them because of their race or gender.

Evaluate the Tenant Background Check

The US imprisons more of its population than any other country, with over 2 million Americans in jail. Over 70 million have a criminal record.

If the tenant screening process brings up a criminal record, you don't have to immediately turn them away. Consider:

  • Legal requirements and restrictions
  • How long ago the crime occured
  • The severity and frequency of their crimes

If a tenant criminal background check brings up no criminal background, perform your own additional checks.

Get a credit report if you haven't already to see if they're financially responsible. Evaluate their references to see if they're legitimate. Interview the applicant for more information.

Send Approval

If every check seems to make an applicant look like a great potential tenant, let them know you've approved their application. Send the lease agreement to them with an acceptance letter and request a security deposit.

Create a lease agreement. It should detail all your duties as a landlord and their responsibilities as a tenant.

Have a legal professional review the lease agreement. They need to check that it's compliant with local and federal laws.

You and your tenant should sign and date it. That's when it becomes legally binding and you can begin lease enforcement and rent collection.

Find a Property Management Company

Performing a tenant background check is one of a landlord's most important duties. It's your legal and personal responsibility to fill your properties with responsible, safe applicants.

Our full service property management services include tenant screening. Contact us today to see how we can help.