As a manager for rental properties, finding reliable renters is crucial for your business success and reputation. Hence, it pays to be informed or refreshed on why you should perform a thorough background check.
Remember, don’t skip the processing of applicants to save time or because the person “appears” right or offers you a tempting “deal.” People with nothing to hide don’t mind adhering to Federal Fair Housing Guidelines, but those who are ready to scam you might. Watch for these typical red flags.
- Bad Credit History
A poor credit history may be a blazing trail of potential problem tenant behavior. Unless you know of the tenant’s personal situation—such as a divorce—which has caused the applicant’s financial picture, you’d be wise to forego the deal right then. However, if the applicant’s minimum credit score falls within your parameters, and their situation warrants consideration (especially with a qualified co-signor), then forge ahead.
- Low Income
This is simple math. If the applicant’s income barely meets the monthly rental, chances are good they will default on rent. Income should exceed two-three times the cost of rent.
- Frequent Job Changes
A job hopper indicates a troubling behavior pattern. Similar to one with a bad credit history, this individual is potentially high-risk.
- Prior Evictions and Bad References
People may try to hide prior evictions or bad landlord references. Are applicant’s smart enough to pull off this trick? Not typically. One manager called to check a reference for and found it was the applicant’s friend using a different phone number and fake accent. When desperate, people will try many schemes.
- Notifications
Check if deposits were returned from prior landlords, as the lack of one being returned could indicate a future problem tenant, one who is irresponsible in keeping the property in good condition.
Also, check how much notification was given before the tenant moved out. Not giving notice within contract guidelines says a lot about the applicant.
- Cash up front
Few people request to pay deposits or rental fees by cash. Those who do could be hiding a criminal background or illicit activity. Money may talk at the onset, but there is no way to predict future problems with someone who requests to deal in cash.
- A Tax Lien
This is an obvious one. If the IRS has difficulty collecting from tenant applicants, can you expect any less?
Don’t negate your instincts when it comes to screening for a tenant. If an applicant is giving you a definite bad vibe (needy, demanding, rude), don’t second guess yourself.
Otherwise, use a legal, professional agency such as Data Screening, to assist you with a thorough background check. Learn as much as you can to protect your clients and keep your mind at peace.
About DataScreeening.com
Data Screening is a Certified Women’s Business Enterprise that has offered business-to-business employment and tenant screenings to human resource professionals and business owners, including staffing companies, for two decades. Among other organizations, they are members of the New Jersey Staffing Alliance, the Society for Human Resource Management and the National Association of Professional Background Screeners. How may we help you today?