By Frank Hendrickson
Tenant Screening has real advantages for landlords.From reducing your risk to and tenant turnover, to improving everything from cash flow, profits, and your chances of sleeping at night — tenant screening has become an integral component of smart landlords' standard procedures.
Why Pre-screen Tenants?
Because when you lease your property to a complete stranger, you are putting yourself at great financial risk. Knowing your prospective tenant's previous rental, credit and job history is essential when determining if they will be an acceptable risk.
Landlord Risks
Your new tenant could pay rent late—or not at all. They might steal or damage your property. They could abandon your rental unit with no notice, owing you back rent. We've all heard stories of bad tenants taking appliances and light fixtures when they move out—you don't want that to happen to you!
And there's risk to surrounding neighbors, as well. Being unaware of a person's criminal history before placing them in your rental property is just not a good idea.
Not only are neighboring adults and children at risk of being harmed, but you, as the landlord, could be held liable for your tenant's actions. In a litigious society, mitigating your chances of being sued is absolutely necessary.
What Landlords Need to Know
Is the prospective tenant employed? If so, how long have they been with their employer? Job stability is a favorable sign. How strong is the tenant's credit history? Are there liens and judgments against them? What about previous evictions and other legal problems? Has the prospective tenant been convicted of any crimes—and if so, what was the offense?
What a Tenant Screening Report will Reveal
Prescreening tenants will show whether your applicant has a favorable history with previous landlords, allowing you to avoid tenants with a history of late payment or evictions.
Tenant screening will reveal whether the prospective tenant pays his or her bills on time, including credit cards and loans. It will also reveal outstanding judgments or bankruptcy filings, as well as previous addresses to compare with those supplied on the application.
A tenant criminal background check will ensure that your prospective tenant's information is correct—such as name, Social Security Number, and current address. It will also tell whether the person has any criminal record at the state, county, and national level (subject to state law).
You'll know whether the applicant has been convicted of a crime or not, along with the type of offense, date, and locality. Sex offenses are also reported, but information varies by state. Finally, tenant background checks reveal any aliases used, incarcerations, and whether the potential tenant has been placed on federal terrorist watch lists or is listed as an international narcotics trafficker.
Things to Remember
You must obtain the applicant's permission to conduct a tenant background check—which can be a standard part of your application procedure. The notification must be a separate document, however. Also, all information you learn from a credit report must be held in strictest confidence, and never shared with third parties. Your applicant may have a right to the report—check your state's guidelines and the Fair Credit Reporting Act (FCRA) to be sure you are compliant. If you reject an applicant for credit reasons, you must advise them in writing. E-Renter can handle your background screening to ensure you are within the guidelines of the FCRA.
Frank Hendrickson, Freelance Writer. We are committed to providing free helpful information about the real estate market. For more information about tenant screening visit http://www.cost-prices.com/why-every-landlord-needs-tenant-screening/.
Source:www.isnare.com |
