As the housing market becomes more volatile, more and more Americans look to rental properties. Property management reports even share than 35% of Americans are living in rental units. It is important for landlords and property managers to establish an effective vetting process for potential tenants.
The housing market really puts property managers and landlords at an advantage. You should take the time and effort to sift through your applicant pool to find the best tenants. Tenant background checks can help you cut costs and foster a welcoming housing community.
Keep reading to learn more about why you need a tenant background check and how it can help you as a property manager.
What is a Tenant Background Check?
To determine if potential renters are a good fit for a rental property, you should run a background check. During a background check, you can examine potential tenants' credit reports, rental histories, eviction histories, and criminal histories during this background check. Landlords can use this information to pinpoint tenants who will fit in well with their rental homes.
Prioritize the Safety of Other Tenants
Residents should feel comfortable knowing that all of their neighbors have undergone a comprehensive background check. If the bulk of your tenants is families that are concerned for their children, this becomes especially crucial.
Background checks can make your neighborhood safer. An angry or dangerous resident can put other tenants and risk. These kinds of tenants can also do undue harm to your reputation in the area.
Reduce Tenant Turnover
When you are running a background check, you should look at the prospective tenant's rental history when you screen tenants. By looking through this data, you may learn more about their normal length of time at a given house, as well as whether they consistently made rent payments.
Every month that you are between tenants is lost revenue. Because of this, a candidate who frequently jumps from rental to rental will not be an ideal option or means of steady income. Every month that you are between tenants is lost revenue. You want tenants who are looking for a long-term residence because they will bring you financial security.
Consider the Liability
You can shield yourself from liabilities and property owners by being skilled at tenant screening. If you don't do your research and do a criminal background check on your tenant, you could be held responsible for their acts as a landlord.
Fair housing laws forbid denying an application based on a person's race, sex, ethnicity, or national origin. However, if an applicant has a criminal history, their application may be refused. But you'll need to show that a background check was the main factor in turning down a housing candidate.
Check Their Financial Stability
You can investigate a potential renter's credit report and financial history with a tenant background check. The renter's credit score is a great indication of someone's financial obligations and payment history. Their credit score will show you if they can pay their rent on time.
Rent default is more likely to happen to tenants who have a history of missed payments, evictions, and bad credit. You can find yourself in an awkward financial scenario if your tenants don't pay their payments.
Protect Your Property with a Tenant Background Check
For a property to succeed, a tenant background check must be done. Background checks on prospective tenants are an efficient approach to safeguard your property and tenants.
Make interviewing potential tenants a top priority if you plan to rent out your Salt Lake property. For any of your property management needs, get in touch with us.