Nearly 20 percent of renters in the United States are behind on their rent. Owning a rental property is not easy. Many responsibilities come with it, including screening prospective tenants for things like their credit score, criminal history, and eviction record.
Tenant background checks provide landlords with valuable information about potential renters before they sign the lease agreement.
Take a look at some of the advantages tenant background checks have to offer.
Predict Future Behavior
A tenant background check is an easy and cost-effective way of choosing a tenant. Screening a tenant via a background check has been proven to do a better job at predicting future behavior than credit reports or employment history checks alone.
A background check will help to determine a person's criminal record and this is a reliable way of determining how well someone will take care of the property.
Background checks are important because they tend to be very thorough and offer a higher level of accuracy. You could do the research yourself but it would take a significant amount of time. Often it is better to hire someone to handle it for you.
Liability protection is a huge part of renting. Especially if you are planning to rent a property that has been vacant for a long time or that has had previous tenants with bad renters records.
It may have made you extremely selective about who you rent your property to and that is normal. However, if you plan to have strict requirements when finding a tenant it is best to do background checks so that you can justify denying someone's application.
Many people will sue because they are upset about not being rented a property. Once this happens you will need to defend your actions.
You need to provide a good reason to deny an applicant, or you could be held liable for discrimination. Make sure you cover yourself by doing background checks.
Reduce Tenant Turnover
In the long run, landlords who conduct tenant background checks earn a higher return on their investment than a landlord who does not perform such checks.
Those landlords who do not conduct tenant background checks will spend more money because they will need to fill vacancies often.
Tenant turnover costs landlords significantly more than it would cost to do a background check before renting.
Tenant Background Checks
Now you know why tenant background checks are essential and how they can stop you from renting your property to the wrong tenants, there is no reason not to get one. Renting your property to the right people will help to prevent delinquencies in payment and damage to your property.
It will also ensure that you have a reliable stream of income from your property investment. You will have peace of mind so that you can focus on other properties or projects.
If you would like help with renting your property, please contact us.