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Running Background Checks For Renters: 5 Tips for Success

The average cost to evict a tenant from a rental property is $3,500. If you’re a property manager or leasing agent, you know how important it is to keep an eye on every dollar coming in and out of your business. If you want to limit your risk of shelling out cash on eviction lawyers, property damage, and more, you need to run background checks for renters. 

Picture this: You've just listed your rental property, and the applications are pouring in. You've got inquiries from all walks of life – the diligent student, the young professional, and the seasoned renter with tales of former landlords. It's an exciting time, but it can also be nerve-wracking. How do you know you're making the right choice?

This post will walk you through the basics of running background checks for renters. We’ll talk about why it matters,and then give you five tips to run tenant screening reports and background checks for your properties. 

Why Running Background Checks For Renters Matters 

Running background checks on prospective renters is more than just a formality — it's crucial to safeguarding your property and ensuring a smooth, trouble-free leasing experience. Let's dive into why these checks are vital for landlords and property managers.

Related: 10 Stellar Podcasts For Property Managers

If you fail to run background checks on your prospective tenants, you might run into various challenges. 

  • Rent default: Without proper screening, you may unknowingly lease your property to someone with a history of late or missed payments, leaving you with a financial headache.
  • Property damage: Imagine renting out your pristine property only to have it returned to you in shambles. Proper background checks can help you identify applicants with a track record of property damage.
  • Safety concerns: Safety should always be a top priority. Background checks can reveal any history criminal behavior or violent incidents.
  • Evictions and disturbances: Nobody wants problematic tenants causing disruptions or leading to evictions. Background checks can uncover past evictions and disturbances, helping you avoid similar headaches in the future.
  • Higher turnover and vacancy rates: Inadequate screening can lead to higher tenant turnover and vacancy rates, costing you both time and money. Thorough background checks and tenant screening software solutions help you find tenants who are more likely to stay for the long term.

How do Fair Housing Laws Impact Your Background Checks?

Fair Housing laws are critical to understand and comply with when conducting background checks. Let’s start with the basics: What are Fair Housing laws? These laws prohibit discrimination against protected classes, such as race, color, national origin, religion, sex, disability, and familial status. When screening tenants, you must treat all applicants equally and avoid practices that could be seen as discriminatory.

Related Read: The Ultimate Apartment Screening Process

How can you avoid a strike when it comes to Fair Housing? Start by ensuring your screening criteria are consistent, applied uniformly to all applicants, and directly related to the applicant's ability to meet rental obligations. Avoid asking questions or requesting information that could lead to discrimination, such as family status or disability-related inquiries.

With all this in mind, let’s dive into our list of tips for running successful background checks for your property management business. 


1. Use Comprehensive Screening Criteria 

Your first step to finding the perfect property tenants is to set clear, comprehensive screening criteria. A strong background check process is all about being fair and transparent. Ensure your screening criteria are crystal clear, and apply them consistently to all applicants. This way, everyone gets a fair shot.

Your screening criteria should cover the essentials, like credit history, rental history, income verification, criminal background, and eviction history. Gathering all this data will help you get a full picture of each applicant, allowing you to make an informed decision.

Related Read: How to Understand an Applicant's FICO Score

Finally, remember that, while you want to be thorough, it's equally important to be fair. Design your criteria to assess an applicant's ability to meet rental obligations without discriminating against protected classes or groups.

2. Verify Applicant Information 

While you hope you can trust your applicants to submit accurate, true information about themselves, you can’t bank on that trust alone. As a result, you must take steps to verify applicant information.

Request supporting documents like pay stubs, bank statements, and government-issued IDs to confirm their details. Remember that rental application fraud is a real concern. Verifying applicant information helps you avoid deception and ensures you're dealing with trustworthy individuals.

3. Consider Criminal and Credit History 

Safety and financial reliability are non-negotiables in tenant screening. You want to ensure you rent your properties to reliable, law-abiding applicants. 

Conduct thorough criminal background checks to uncover any red flags. Look for patterns of criminal behavior that could pose a risk to your property or other tenants. You should also explore the tenant’s rental and eviction history. 

Remember that there are legal restrictions on using criminal history in tenant decisions, which can vary by state and locality.

Finally, run a credit check through a service like TransUnion to ensure the applicant is financially sound and stable. Intellirent offers strong integrations with TransUnion, Nova Credit, and more!

4. Examine Debt-to-Income Ratio 

We touched on finances briefly in the last section. While a solid credit history can indicate financial responsibility, a credit check alone isn’t enough to fully assess your applicants’ financial health.

One figure you should consider is your applicants’ Debt-to-Income Ratio (DTI). A high DTI could signal potential financial strain, affecting their ability to consistently pay rent. Consider how the applicant's financial factors align with your rental requirements. Evaluate whether they're likely to afford the rent on an ongoing basis.

Awarding your property to an applicant who can’t regularly afford what you plan to charge in rent fees will only cause stress for both you and your new tenant. 

5. Choose the Right Tenant Screening Solution 

The steps above are all vital, but this one might just be the most important one. When you pick the right tenant screening solution with the features you need, the rest of the puzzle pieces will click into place much more easily. 

Think about what you need in a screening solution. Comprehensive reports, speedy processing, and cost-effectiveness should all be on your checklist. Next, look for a provider that offers a user-friendly platform. It should be easy to navigate and provide the data you need to make informed decisions.

Compliance with legal requirements is non-negotiable. Ensure your chosen solution adheres to all relevant laws and regulations. Finally, look for a solution that allows you to customize screening criteria to match your property's specific needs. 

For a comprehensive and user-friendly tenant screening solution, consider Intellirent. Best of all, it's always free for leasing professionals. It's a win-win! Check out our free product tour today to see if our solution is right for you. 

Running Background Checks for Renters the Easy Way 

Running background checks for renters is a critical part of the property management process. You’ll struggle to find and maintain relationships with strong-fit renters without strong background checks.

Following the five tips above will help you kick off your background check process correctly. Though all five tips are critical, the fifth tip is finding the right tenant screening solution. If you get the right partner set up from the beginning, you’ll have an easier time managing every other step in the process.

Intellirent offers an easy-to-use tenant screening solution. With our tool, you can list properties, accept applications, and screen tenants, all in one place.

Take a product tour of Intellirent today to see if our solution is the right one for you!


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