Rental Properties

The Importance of Background Checks for Rental Properties

Whether you are a property manager with years of rental experience behind you or preparing to rent out a property for the first time, it’s important to understand how to identify a qualified rental candidate to protect your investment.  A background check is probably the single most important tool to make that identification.

And now in the days of vacation rentals, Airbnb and other rental opportunities, it’s more important than ever to do your homework before renting a room, a home or any type of personal property.

Background checks generally come to mind when thinking about gun control or hiring a childcare worker, but background checks are an excellent way to learn about your potential renter as well. Why is it so important to run such an extensive check on your applicant?

Receiving Payment

Probably the most important aspect of renting is collecting the rent every month. If you don’t receive the rent, how are you going to pay your own bills? If your applicant doesn’t have a job, or lied about having a job, how are they going to pay you? And if you don’t delve into this by running a background check, how are you going to ensure that the job history is valid? These days it’s very simple to have a friend intercept a call and give a false recommendation. It’s easy to make up a career and have a business card printed up or put together a fake website.

While every state has laws protecting landlords rights to evict a renter who isn’t paying, the bottom line is it is still costly to the landlord. Sure you can try to sue, but if the person has no assets, you’re just wasting time and money on legal fees. Plus you’re out the rent and now you have to waste more time and money finding another renter. Isn’t it better to do it right the first time? Employing the services of a background check company like SB Checks will give you the peace of mind that your renter has the ability to make the monthly payments. The professionals at SB Checks will receive valid confirmation about the employment history and report those findings so that you can make an informed decision.

Validating Identity

Who are you really renting to? Just because the application says Sally Johnson, does that mean you are really renting to Sally Johnson? Not necessarily. The internet is chock full of stories where people used false identities for a variety of reasons… including property rentals. If you don’t know who you’re renting to, how will you have any recourse? How will you know what to expect from the renter in terms of how they will pay, use the property or care for the property?

Recently a couple in San Francisco had to file a lawsuit against a neighbor who reportedly used a false name to rent their apartment out on Airbnb. According to the report, the couple had rented their apartment out for 60 days and after the 60 days, the tenant refused to leave. That is when they found out that the tenant was actually their neighbor whom they’d been feuding with over a business. According to the couple, this was the neighbor’s way to get even.

In Boynton Beach, Florida, a woman submitted rental applications to four different apartment complexes with a stolen identity. Apparently a woman was paid by an unknown person to apply for rentals with a false identity in some apparent organized fraudulent scheme. Luckily, the woman whose identity was compromised was alerted by a credit monitoring company and the criminal was arrested.

These are just two examples of many and two very good reasons to secure a background check before signing any type of rental agreement.

Payment History

There is a saying that past behavior predicts future behavior. This is one of the reasons a credit check is so important before renting a property. If someone has a long history of not paying creditors on time or has pages and pages of debt, are they really a good risk? While discrimination of any kind is obviously not allowed when determining a renter, a property owner does have the right to assess the risk and decide if the applicant is the right choice.

Credit checks will give you a whole history of payment behavior that can be used in determining if the applicant will indeed pay the monthly rental fee. Watch out also for large amounts of revolving debt that may keep them from paying you each month.

Property Others

Are you renting to a sexual predator? Are there drugs being sold on your property? Are you endangering your neighbors? These are definitely things to consider before you rent your property. A criminal background check will determine if your applicant has a criminal history. Once again, there are laws against discrimination, but you have the right to assess the risk here as well. You have a right to know the criminal history of any renter to protect not only your property, but the property and lives of those around you.

Reference Check

And don’t forget the all-important reference check. Does the applicant have people that will vouch for them? Did they take care of their last rental property? These are all factors that any property owner/manager needs to consider before making a final decision.

While even the most thorough background check will not guarantee the perfect renter, it is the best way to reduce the risks associated with renting to an unknown person.  Let the professionals at SB Checks assess your risk by determining which tenant screening tools make sense for your situation. Call (888)725-2535 today!