Would you trust a stranger to hold onto $100 for you? Probably not, but many Houston landlords trust tenants with their most valuable investment without knowing much about them. Doing a tenant background check is a vital part of protecting your property.
By doing an accurate and reliable background check, you'll reduce the risk of property damage, late payment, and countless other potential problems. Are you interested in learning more about these lease agreement checks? Read on for insight into this key process.
Do a Credit Check
One of the most important steps during the rental screening process is the credit check. It's one of the vital tenant verification steps, as it provides clear and reliable insight into a potential tenant's financial history.
If someone has a reliable and consistent credit report, it suggests they'll likely make timely rent payments. As long as you go through an authorized credit reporting agency, you'll get an accurate picture of an applicant's financial past.
When doing credit checks, keep compliance in mind. You'll need to follow the Fair Credit Reporting act, which, according to the Federal Trade Commission, compels you to only use the information for legitimate purposes and to ensure the applicants' privacy.
Run a Tenant Background Check
While a credit check gives you crucial insight into a potential renter, it doesn't give you the full picture. Sure, paying rent on time is important, but there are other ways a tenant could cause you financial harm.
For example, if a tenant is involved in criminality or if they have a history of property damage, they'll likely cause problems. Thankfully, these tenants usually have a past full of clear red flags. By doing an extensive criminal background check, you'll uncover any problematic events in an applicant's past.
A comprehensive background check needs to consider the full range of potential criminal history. Make sure you check:
- State-level criminal history
- Federal records
- International criminal records
Evaluate Rental History
Finally, consider rental history. Some applicants may have good credit and no criminal history, but that doesn't always mean they're an ideal tenant. Some red flags are only apparent if you talk to previous landlords.
For example, some tenants might neglect basic upkeep and fail to report maintenance issues. Such negligent behavior can cause financial trouble, but it won't appear on a criminal or credit check. To get a full picture of an applicant's rental history, always ask for references from a previous landlord.
Keep These Landlord Safety Tips in Mind
As you can see, fully evaluating a potential tenant is an extensive process. If you overlook something, you could end up renting to someone who doesn't respect your investment. Since you can't afford to make mistakes, it makes sense to work with a professional property management company that can give you a reliable, comprehensive overview.
Here at PMI Fine Properties, we have a long and proud history of helping landlords protect their investments and maximize returns. We're locally owned and operated, so we understand the Houston market, but we can also call on an extensive professional network through our national PMI franchise.
Contact us today, and let's arrange a comprehensive background check.
