While driving into the office this morning and thinking of what to blog about today (this really happened), I was flipping through channels on Sirius Radio, and stopped on Fox News when I heard Elizabeth Hasselbeck on Fox & Friends ask the following question:

“If you are an owner of a rental property and you want to hire a property manager, what important questions should you be asking?”

Bob Massi, the legal consumer analyst for Fox News Channel responded with “the very, very first question is how do you select my tenant, property manager? What kind of background check do you do? What is it that you look for to make sure that I’m not going to get somebody in there that is going to ruin my property?”

Watch the full clip here: http://video.foxnews.com/v/3264761934001/what-are-the-rental-rights-of-the-landlord-vs-tenants/

We write a lot about pre-employment applicant background screening programs and advice, but haven’t focused on tenant screening on the blog yet. As the rental industry continues to show extreme growth, out-performing every other housing sector there is, there has subsequently been a huge growth in the tenant screening industry.

A good landlord or property management company will perform a very thorough background screen on prospective tenants before accepting an application and signing a lease agreement. Just as a bad economy has forced a strong growth in those wanting or needing to rent properties out, it has forced an even larger growth of victims on the leasing side, who in desperation, will resort to extreme measures to obtain a lease. Some reasons for background screening your tenants carefully would be:

  1. Identifying Professional Tenants. “Professional Tenants,” are a large concern for property managers, as this worrisome trend continues to grow. What is a Professional Tenant? Professional Tenants scam landlords and the system in general. Once they move in, they instantly stop paying rent, often file a series of complaints about poor living conditions, and then sometimes even tie up cases in court for months on end, all while not paying rent.
  2. Identifying false information submitted on lease applications. As simple as this sounds to avoid, it is seen all too often. Applicants supply false addresses, job history, etc, in hopes that the information will slip through at first glance. Many times unfortunately, this is exactly what happens.
  3. Catching False Identities. Beyond providing false information on applications, some would be tenants will provide completely false identification information, and have the documents to “prove” who they are.
  4. Protecting your property and other tenants. Tenant background checks often can turn up criminal backgrounds including domestic violence, sexual predators, drug dealing, etc.

These checks will include verifying identity, gathering references from employers and former landlords, criminal history, eviction history. This is not the same as the tenant credit check, which will establish whether the applicant is able and willing to pay the rent.

Below is a sampling of what you might expect on both types of reports:

Tenant Background Check

  • SSN Validation
  • Residential History
  • OFAC/Patriot Act Search
  • Evictions and Lawsuits (outside of that which is available on a credit report)
  • Leins and/or judgements
  • Bankruptcies
  • Criminal Records Search
  • Sex Offender Registry Search

Tenant Credit Search

  • Applicant’s Credit Report
  • FICO Score
  • Bankruptcies
  • Judgements
  • Collections

Active Screening can help protect you from fraud and mitigate risk by providing insight into a potential renter’s history. We offer customized and unique solutions based on your application policy.  Through credit reports and criminal records, we can help you identify the tenant who will pay their rent and leave you worry free each month. We even offer applicant entry solutions which give your applicants a simple online paperless form and payment solution.

Remember, the work you put in up front when designing your application process will make all the difference in the world when it comes to weeding out horrible tenants. Your properties are a huge investment, and renting them out can be a great source of income, but each bad experience will be expensive. Contact us today for a free evaluation and demo, and let us help set you up for success.

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