When applying for a rental home in the past, all you needed was a handshake and the appropriate deposit. But now it’s critical for rental agencies, property managers, and landlords to know who they’re renting to and how probable it is that they will be a good tenant.
Find out how to do background checks on potential tenants and how they may provide you and your nearby tenants peace of mind.
How do background checks work and why are they crucial?
Let’s quickly define what a tenant background check is before getting into how to do one. A background check, put simply, is a thorough examination of a person’s criminal, eviction, educational, and employment history that can be used to confirm and screen potential tenants.
It’s in your best interest as a landlord to rent out your properties to tenants who will maintain them clean and in excellent condition, pay the rent on time, and contribute to the neighborhood.
Background checks can help you learn more about potential tenants and offer you a thorough understanding of their past, while nothing can be guaranteed. When a prospective tenant submits a background check, anything from their past that they neglected to disclose, such as a previous eviction, is likely to come up. This will give you more information before you decide whether to allow them to sign the lease or not.
How to research a tenant’s history
Obtain a signed waiver
You must get the renter’s written authorization and agreement before conducting a background check on a tenant. If the tenant is not aware that you are conducting a background check, you are breaking the law. In your rental application, you might include a part where you expressly request their signature and approval. Alternatively, you might make a separate permission request form for them to sign.
Obtaining tenant data
You’ll need the renter’s name and social security number to do a background investigation. Obtain the personal data you require to continue with the tenant screening procedure. It is typically forbidden to perform a renter background check unless you have first obtained consent. This is a solid ethical practice that builds trust during tenant placement, even if it isn’t against the law.
To do this, just include consent requirements in the documents that need to be signed. If not, you can attach it as a different form.
Select a reputable background investigation agency
When vetting a tenant, there are many background check services to pick from. Make sure it has Federal Trade Commission approval by comparing your options. Once you have permission, choose your background check provider and run the report.
Screening Agencies that can help you:
Choose your payment method for the background check
Depending on the firm you use, background checks might cost anywhere from $15 to $40. You’ll need to decide if you’ll cover the cost of this or if the potential tenant will be responsible for it. Include this fee in the price of the rental application as one approach to get this covered.
Prepare a strategy in advance for how you’ll apply the knowledge
It’s a good idea to have a game plan in place for how you’ll use the information and how it will influence your decision before you see the results of a background check. Will teenage infractions, for instance, be a deal-breaker? Or, will you only reject hardened criminals, evicted people, or sex offenders? To be a fair landlord, you must understand your limitations and hold all tenants to the same standards; otherwise, you risk future discrimination claims.
Learn the laws
It’s critical to be aware of the regulations and comprehend what you are and are not allowed to do in order to prevent discrimination and be in compliance with the Fair Housing Act. For instance, you cannot conduct a background check on someone based solely on their ethnicity or gender. Additionally, doing a background check cannot be used as an excuse to exclude someone on the basis of their sexual orientation or age.
What do you need to conduct a tenant background check?
You must get the renter’s written authorization and agreement before conducting a background check on a tenant. If the tenant is not aware that you are conducting a background check, you are breaking the law. In your rental application, you might include a part where you expressly request their signature and approval.
How do you ask that a tenant’s criminal history be checked?
Legally, a landlord may ask for a tenant’s consent to have their criminal past reviewed, provided that every prospective renter has their criminal history investigated. To put it another way, a landlord is not allowed to pick and choose which candidates to subject to a criminal background check.
How much time is required for a tenant background check?
Setting up a tenant screening procedure that works for you and organising it in advance is necessary before you can entrust someone with managing your property. You must verify applications and gather all the information you need to make an informed decision. You’ll be in the lead if you have a system that is easy to use and ready to start.
How much does a background investigation of a tenant cost?
Tenant screening report fees typically range from $25 to $75, but prices differ by location due to state laws. The screening reports must be properly accredited by the relevant organizations, which is an important consideration.