Before renting a property, a landlord should check the tenant’s rental history and credit scores. This helps in determining if the tenant can pay rent consistently and has a good track record of paying their dues on time.
It also ensures that the landlord is aware of any issues faced by the previous landlords and can take necessary precautions to avoid any future problems.
Along with these, landlords should verify the tenant’s income sources, and employment status, and conduct a background check to ensure that the tenant is financially stable and responsible.
These steps not only protect the landlord’s property but also help in building a good tenant-landlord relationship based on trust and mutual understanding.
Reviewing Rental Applications
As a landlord, reviewing rental applications is a crucial part of the tenant screening process. It helps you analyze the potential tenants to decide if they are suitable for your property.
Request For Personal Information
Before inviting potential tenants in for a viewing, make sure they complete a rental application form which should request the following personal information:
- Full name and contact information.
- Social security or national insurance number.
- Date of birth and current address.
Employment And Income Verification
It’s essential to verify an applicant’s employment history and income to ensure that they can afford the rent and have a stable job. These are some of the ways you can verify their details:
- Ask for pay stubs from their current job and other sources of income.
- Get in touch with their employer directly to confirm their employment status.
- Have them complete and sign an income verification form.
Credit And Background Checks
Credit and background checks help you determine whether an applicant has a good credit history and if they have a criminal record or have been evicted before. These are some ways to perform a credit and background check:
- Use a credit report service to get information on their creditworthiness.
- Conduct a background check through a third-party company.
- Check their references by contacting previous landlords.
Reference Checks
Checking references is one of the most crucial parts of the rental application process. By speaking with previous landlords or professionals, you can determine if the applicant was a good tenant in the past. Here are some things you should consider when checking references:
- Contact previous landlords directly to ask about their experience with the tenant’s behavior and any issues they faced.
- Request for professional references to verify their character and motivation to rent.
- Cross-check the references with their employment and income verification details.
Inspecting The Property
Before renting out a property, landlords should conduct a thorough inspection of the premises to ensure that it is safe, habitable, and free of damage. Here are some key areas to scrutinize during a property inspection:
Physical Condition Of The Property
- Check for any signs of wear and tear, such as peeling paint or cracked tiles.
- Inspect major appliances and systems, such as heating and cooling units, to ensure they are in good working condition.
- Look for water damage, leaks, or signs of mold or mildew in areas such as the bathroom and basement.
- Make sure doors, windows, and locks are all functional, and there are no broken or missing panes of glass.
Previous Property Damage
- Check for any previous damages or disputes that may be grounds for withholding the security deposit.
- Make note of any pre-existing issues, such as a scratch on the wall or a dent in the baseboard, in the move-in inspection report.
Property Safety Checks
- Ensure that smoke detectors are installed and in working condition, and fire extinguishers are readily available in case of emergency.
- Check that all electrical wiring and outlets are safe and up to code.
- Make sure there are no tripping hazards, such as loose carpet or uneven flooring.
Environmental Health And Safety Hazards
- Look for environmental hazards such as lead or asbestos, especially in older homes.
- Check for pests such as rodents or insects, and take necessary steps to eradicate them.
- Make sure there are no exposed wires or sharp objects that could cause injury.
Meeting The Potential Tenant
Before allowing anyone to rent your property, you must meet them and assess their suitability as a tenant.
This can help ensure a positive and successful tenancy. In this section, we’ll discuss what you should do when meeting with prospective tenants.
Interviewing Prospective Tenants
When interviewing prospective tenants, here are the key points to consider:
Ask for identification
Request a valid photo id, such as a driver’s license or passport, to confirm the tenant’s identity and legal residency.
Ask about their income
The tenant should have a steady income to afford the rent. Request their employment details, including their employer’s name, position, and salary.
Background check
Ask about previous tenancy experience and request references from former landlords. Checking their credit score can also help evaluate the tenant’s financial responsibility.
Understanding Tenant Behavioural Patterns
When evaluating the potential tenant’s behavioral patterns, ensure to consider the following points:
Communication skills
During the interview, observe the prospective tenant’s communication skills. Are they responsive, polite, and professional?
Cleanliness
Ask about their living habits, which can give you a hint about their cleanliness level. You don’t want to rent your property to someone who can create chaos and hygiene issues.
Compatibility
Determine if the prospective tenant’s behavior and lifestyle are compatible with other tenants in the building to prevent any conflicts in the future.
Inadequate Rental History
One of the most crucial checks a landlord needs to carry out before renting out a property is to scrutinize the prospective tenant’s rental history.
This check is vital because it provides insights into the tenant’s reliability and loyalty to past landlords.
If the rental history is inadequate, a landlord may face a high risk of future issues with tenants. Here are the essential things that a landlord should check under inadequate rental history:
Late Payments
Late rent payments in a tenant’s history can be reflective of a lack of financial stability or responsibility. Here are some points to consider regarding late payments:
- Check the tenant’s credit score and credit history.
- Inquire about the reason for the late rent. Was it a one-time incident or a frequent issue?
- Ask the previous landlord or property manager if the tenant had paid their rent on time every month.
Eviction Records
Eviction records are a clear indication of a tenant’s bad rental history, and cannot be ignored. Points to focus on are:
- Check public records databases for any eviction proceedings.
- Verify with previous landlords or tenants about any eviction filings.
- It’s important to consider the reason for eviction. Was it rent-related or due to poor behavior?
Criminal Activities
When landlords vet potential tenants, they should also check if the prospective renters have a criminal record. Here are some crucial aspects to consider:
- Check if the tenant has committed any crimes that can make them a security risk.
- Verify the information disclosed in the prospective tenant’s application and ensure it matches what’s found in public records.
- Consider specific state and federal laws that prohibit renting to applicants with criminal records.
It is crucial to carry out these checks and ensure the rental history and criminal records are scrutinized. If necessary, a landlord may reject a tenant’s application based on the results of these checks.
Financial Instability
As a landlord, it is important to ensure that your potential tenant can afford to pay the rent consistently and on time.
Tenants facing financial instability often have trouble paying rent and may eventually default on their payments. As a result, they can cause significant losses for landlords.
To mitigate this risk, landlords should perform a thorough financial check on their prospective tenants. Key areas of interest include low income, a high debt-to-income ratio, as well as bankruptcy and foreclosure history.
Low Income
Low income is a red flag for landlords, as it indicates that the tenant may struggle to pay rent consistently.
When vetting a prospective tenant, landlords should check their income history for the past year or two. This will provide insight into the tenant’s financial stability and ability to pay rent.
If the tenant’s income is too low, the landlord may want to consider other applicants to avoid the risk of late payments or default.
High Debt-To-Income Ratio
A high debt-to-income ratio implies that the tenant may be financially stretched thin. A tenant with multiple monthly debt obligations will have trouble paying rent consistently.
When screening tenants, landlords should look for a debt-to-income ratio of no more than 36%.
This ratio is calculated by dividing the tenant’s monthly debt obligations by their monthly income. If the tenant’s debt-to-income ratio exceeds 36%, it may be wise to consider other applicants.
Bankruptcy And Foreclosure History
Landlords should also check for bankruptcy and foreclosure history when vetting prospective tenants. A tenant who has a history of bankruptcy or foreclosure may be at risk of future financial instability.
This could result in missed rent payments or a sudden move-out, which can be costly for landlords.
If a prospective tenant has a bankruptcy or foreclosure in their history, landlords should consider asking for additional financial documentation, such as a current bank statement or pay stubs, to ensure they can meet their financial obligations.
Performing a thorough financial check on prospective tenants is essential to ensure that they can pay rent consistently.
Low income, high debt-to-income ratios, bankruptcy, and foreclosure history are all potential red flags that landlords should consider when vetting tenants.
By relying on data-driven insights, landlords can avoid future financial losses and find a tenant who is a good fit for their property.
Indications Of Poor Character
Being a landlord requires a lot of responsibility, including selecting the right tenants for your rental property.
One of the most crucial parts of this process is to check for indications of poor character. Below are some key points to consider when screening potential tenants.
Aggressive Behaviour
One of the most significant indications of poor character in a tenant is aggressive behavior. Here are some bullet points to help you identify this:
- Threatening or abusive language toward landlords or neighbors.
- Past criminal records involving violence.
- Previous evictions due to violent behavior.
- Reports from previous landlords about aggressive behavior.
Criminal Records
As a landlord, it’s essential to check tenants’ criminal records to ensure their safety and the safety of other tenants and neighbors. Here are some bullet points to help you better understand this:
- Look for any history of violence, theft, or drug-related crimes.
- Ensure that the tenant has not been involved in fraud or any financial crimes.
- Check whether the tenant is registered on any sex offender registry.
- Ask for a background check and permission to run a criminal record check.
Trashing Previous Rental Units
Another essential aspect to consider is whether the tenant has a history of trashing their previous rental units. Here are some bullet points to help you understand the signs of this behavior:
- Previous landlords’ reports of excessive or unusual property damage.
- History of non-payment of rent or other bills.
- Reports of unsanitary or hazardous living conditions.
- Any police report or legal action taken against the tenant for property damage.
Frequently Asked Questions For What Should A Landlord Check Before Renting?
What Documents Should A Landlord Ask For?
Landlords should ask for copies of their potential tenant’s government-issued id, credit report, and income verification.
How Can Landlords Avoid Discriminatory Practices?
Landlords can avoid discrimination by treating all applicants equally and using objective criteria to evaluate them.
Should A Landlord Conduct Background Checks?
Yes, a landlord should conduct a background check to verify information provided by the tenant and ensure they have no criminal history.
What Are A Landlord’S Legal Obligations To Tenants?
Landlords have legal obligations to maintain habitable living conditions, perform necessary repairs promptly, and respect tenants’ right to privacy.
Conclusion
When renting out your property, keep a sharp eye on the potential tenant’s credit scores, employment status, and rental history.
By doing your homework, you can safeguard your investment, ensuring a smoother, more lucrative experience. Remember, the right tenant makes all the difference.
Reference
https://consumer.ftc.gov/consumer-alerts/2016/11/renting-apartment-be-prepared-background-check