Vetting Prospective Tenants
To protect yourself and your investment, you’ve got to make sure your potential tenants are likely to pay their rent on time and preserve your property. Sounds simple – but sometimes property owners skip some important steps that can help avoid bigger headaches later.
Of course, you’re going to require applications, proof of income and references. But in addition to these essentials, you’ll want to have both a credit checks and a background check on anyone who’ll be living in your rental. (And everyone living in your rental absolutely must sign a lease document!)
You can verify someone’s income – but that doesn’t tell you whether they pay their bills on time. A credit check gives you someone’s bill-paying history and alerts you to any red flags like bankruptcy, repossessions or evictions. If anything looks amiss, you should review the information with the potential tenant. This conversation will help you make a more informed decision.
A background check gives you information on any legal issues your potential tenant has been involved in. This includes any arrests or convictions related to a crime. Again, this helps you make an informed decision.
Credit checks and background checks aren’t free – but skipping them isn’t a good way to save money or speed up the rental process. If you’re using a property management company to find tenants for your rental, they should include credit and background checks in the services they’re providing to you.