Those of you who are investors or landlords—and those of you who advise those professions—have heard the horror stories. Yes, I am talking about those tenants who make your life miserable and can make your rental go from a money-maker to a money-loser. The real estate industry has named those perennial bad tenants as “professional tenants.” There is even a reality show about them called “The World’s Worst Tenants.” And even though that may make you smile, having a bad tenant can more likely bring you to tears.
Many websites offer steps property owners can take before accepting renters, and 90% of them start with this step: screen the applicants. Here is advice about screening from Sarma, a 100-year-old corporation based in San Antonio that is dedicated to serving individuals and businesses in countless industries that need employment and tenant background checks.
There are many factors to consider when accepting tenant applications from potential renters. The information requested on an application can range from basic details such as name, current and previous address information; to more essential information like previous felony or misdemeanor charges. All of the information gathered on an application is vital for qualifying and validating renters. There are instances, however where some details on an application are not accurate or even reported. Whether an applicant does not want to disclose their previous criminal history, or a past employer, uncovering such information will help you make the best decision for your property. An applicant has the ability to disclose or omit particular information on an application. If an applicant was previously evicted from their rental home or apartment, chances are they would reluctantly include that information on their application in hopes that the property might overlook this information. It takes the right tools and services to uncover the most accurate and important information to qualify renters. These products and services used in background screening serve as reference guides to reveal information your future tenant may be unwilling to disclose.
Screening alleviates the stress of renting to an unfit tenant and prevents monetary loss from renters not paying rent. An increased number of landlords and renters are turning to background screening to protect themselves and their property. Other risks include court costs as well as property damages that may be incurred by tenants. There are current laws and legislations put into place to protect the landlords. However, there are some cases where landlords are being held accountable for the people they allow to live on their property. If a landlord rents to a registered sex offender, they may be held liable for any injuries which the offender causes to other tenants or neighbors. Rules vary from state to state, but the best piece of advice when renting is to gain access to as much background and criminal information as possible. If you find yourself with a problem tenant, it may be difficult to evict him or her for non-payment of rent, or frequent disturbances. But with background screening you are armed with the tools to rent to someone who is trustworthy and owns a clean record.
Applicants come in many different ages, lifestyles, and backgrounds. Do you want to rent to a college student who may or may not have the tendency to throw late night parties with their classmates? If your applicant’s background check shows a felony conviction from more than 15 years ago, would you automatically disqualify them from living on your property? Would you consider qualifying them based on their previous rental history? The decision on whom to rent to is ultimately based on your judgment, however landlords must be cautious about asking questions that are deemed discriminating. Do not to ask for irrelevant or unlawful information, such as race, religion, age (other than making sure the tenant is of age), or sex, which could give rise to a discrimination claim.
The Fair Credit Reporting Act requires landlords to follow the proper rules and guidelines when screening applicants. It is important to follow the proper procedures when doing so, but make sure you set certain standards when qualifying your future tenant. A clean background check with no previous felonies is a good way to start when setting tenant standards. You also want to make sure you are qualifying someone who earns at least three times the rent, no matter what the rental price is. Contacting previous landlords and obtaining good references is also very important. You want to make sure you follow these initial rental standards to qualify future tenants. Pairing these standards with the information shown on background checks can help you set the bar for qualifying and non-qualifying potential tenants.
More information about background screening can be found at www.sarma.com. The information contained in this article is provided for informational purposes only and should not be construed as legal advice on any subject matter.
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