It’s a good idea to always perform a background screening check, as you never know what’s lurking in someone’s rental or financial history. Finding and securing a tenant is difficult enough, but it can get more complicated, as you can’t trust everyone interested in renting.
Why Should You Perform Background Screening checks For Tenants?
If you’ve never rented a property before, it may seem a bit overkill to screen tenants so thoroughly. A background check may not seem necessary, but as any experienced landlord can tell you, people don’t always turn out to be responsible, respectful, or worth the headache of renting to them.
In order to filter out the potential tenants you should have a checklist of things to look out for that determine the level of risk you’d take. Is credit history important? What about employment? Is their previous residence relevant? You can perform these background screening checks yourself, or you can have a property management company take over the process and select a suitable tenant to save you hours of online research.
Can Someone With Red Flags Make A Good Tenant?
It’s up to each landlord to determine the level of risk they are willing to take. Some choose to not take on any tenants that present risks, while others are more lenient. Generally speaking, if someone presents one of these disadvantages, they also have others.
But it’s important to look at the big picture and look at their background to determine if something is a blip on their resume. Understandably, you cannot judge a renter solely by an unreturned deposit or a bad job, but it’s important to be realistic. You cannot leave your precious property in the hands of someone who may damage it.
The 5 Background Screening Red Flags You Should Be Looking Out For
- Bad credit
Why it’s a red flag: it may be a result of irresponsible financial behavior
One of the very clear signs of whether or not a person can take on the responsibility of a lease is their credit score and history. While it’s true that credit alone doesn’t paint the whole picture, it can give you a pretty good idea of what to expect.
Bad credit is typically a result of poor financial decisions, defaulted loans, and otherwise an inability to fulfill financial obligations. Not the best sign when you’re trying to ascertain if they can pay rent or not.
On the other hand, people can tank their credit for all sorts of reasons that don’t necessarily impact their ability to pay rent. They may have been saddled with debt from a young age, or they might have had a failed business. They might even have been the victim of identity theft – so make sure to check credit in conjunction with other aspects of their financial history.
- Many short-term leases & evictions
Why it’s a red flag: you may be at risk of non-payment or tenancy abandonment
Take a look at their tenancy history – have they rented before? Long-term or short-term? Have they ever been evicted? Unfortunately, if the tenant has a history of a lot of short-term tenancies, that usually means there were issues. Most likely, they were unable to make their rent payments consistently, or they damaged the property.
If the tenant has any evictions, that’s also not a good sign. Eviction is not very common, and it usually only comes to that if there’s a serious issue, like a history of defaulted payments or damage to the property. Unfortunately, taking on a tenant that has been evicted or that has cut their lease short multiple times could spell future trouble. You run the risk of them skipping out on you and their rent payments, stealing from the property, or damaging the property even beyond their security deposit.
- Criminal history
Why it’s a red flag: can indicate violent or destructive behavior
Criminal history tends to be one of the big deal-breakers for most landlords, and for good reason. While not all criminal behavior is created equal, most people are not willing to take the risk of harboring a criminal in their property.
You do need to check with your local laws. There are categories of crimes that enable you to reject the tenant, while others would be considered undue discrimination. If the tenant has been charged with sex crimes, violent crimes, or drug-related crimes, you are usually legally allowed to reject them. It’s also mandatory for the person to inform you of some of these, so dishonesty surrounding them is also a bad sign.
- Withheld deposits
Why it’s a red flag: can indicate flakiness, an inability to pay, or destructive behavior
It is recommended that you take the time to check their previous tenancy history and whether or not they received their deposit back. Sometimes landlords unfairly forfeit the deposit, but a history of withheld deposits is a big red flag.
Usually, not getting back their security deposit is an indication that they damaged the property. Or they left suddenly without paying off utilities or the last month of rent. Or that they failed to pay rent for one or several months in the past Most landlords are pretty lenient and flexible when it comes to the security deposit, so having it withheld repeatedly is a clear sign that something is not entirely trustworthy about this tenant.
- Unreliable employment & income
Why it’s a red flag: may be sign of an inability to pay reliably
It’s important for the tenant to have the ability to afford rent and reliably pay it, so it’s normal to check on that. It’s not enough to just check their current employment, but take the time to look into their employment history. Do they have a history of short-term employment? Is their income enough to cover rent? All that information is necessary to determine whether or not they would make a good tenant and be able to sustain the tenancy long-term.
If they are unemployed or otherwise do not benefit from a steady income, it can create problems for you later when they become unable to afford to pay rent. The last thing you want is a tenant you need to constantly check up on, who’s always late with rent, or is unable to pay.
You can never be completely sure that the tenant you’re bringing into your property is a model citizen, but there are ways you can get a pretty good idea. A background screening check is practically essential in order to find all the potential details in a person’s history, that might indicate that they wouldn’t be the best tenant.
From multiple short-term leases to bad credit and even something more serious like a criminal record, these are all potential red flags you should be looking out for. The process of looking for a tenant and researching their background can be lengthy and time-consuming. So if you’re not up to it, a property management company can always take care of it.
Now you can see for yourself, why conducting a detailed tenant screening background check in highly recommended for landlords. You can get in touch with Real Property Management Premier to find out how we can help you with your rental property in South Florida. Contact us online or call 954-800-4433 and ask our experienced property managers about our FREE market analysis.
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