Whether you own and run a rental property company or want to rent out a room in your home, you want to know as much about the people who will live on your property as possible. That’s why so many property owners and management companies conduct background screenings and analyze the reports for background check red flags today.
As of 2018, landlords found that 25% of applicants had some criminal record through a detailed tenant background screening. Regardless of how you deal with such information, it is critical to learn about it before renting your property to someone. Otherwise, the lack of information or failing to act accordingly when learning such information puts the safety of your property’s tenants and neighbors at risk while also harming your reputation as a landlord.
Here are three tenant red flags that you should explore and analyze to gain more insight and make the best decision for your business.
1. Bad Credit
A key fact that you need to know about applicants is whether they can pay their rent on time each month. A review of each applicant’s credit history and various debt obligations and his or her handling of them can help you evaluate your potential renter’s diligence in this important area. A poor credit rating — between 300 and 629 — is likely to set off warning sirens.
Keep in mind that each tenant must sign a consent form or line on your application before you can conduct a credit check. Once you run this report, you will see information regarding your potential tenant’s creditors and credit history — including credit cards, mortgages and various loans. When you put all the pieces together, you should get a good sense of the individual’s financial responsibility and how likely it is that you will receive continuous and full payment for the duration of his or her lease.
It’s OK to remain flexible in this area if you feel there might be extenuating circumstances. Ask your prospective tenant to explain some red flags regarding questionable or bad credit findings to see if this is something you can work around with him or her.
2. Eviction History
A tenant history riddled with evictions — or even one eviction — is more difficult to overlook for most landlords than a spotty credit history. Seeking a tenant eviction is time-consuming and puts you at risk of losing anywhere from one to several months of rental income during the often drawn-out process.
You might see traces of an eviction proceeding on the tenant’s credit check in the form of unpaid rent or lease payments on court orders. You can also ask background check professionals to conduct reference checks, speaking to the potential tenant’s former landlords or running a rental history background check.
3. Criminal History
As a landlord, you can legally deny an applicant if you discover a criminal history that demonstrates the potential for risk to your current residents and surrounding neighbors or a lack of respect for your property.
Global Verification Network can help you navigate this complex matter according to the rules and regulations of the Fair Housing Act (FHA), since you cannot have a blanket policy that denies any applicant with a criminal record.
Would You Like Help With Tenant Screenings and Red Flags?
Along with these larger red flags, tenants might also show subtle warning signs that you may overlook, such as failure to properly fill out the application by omitting vital information or a history of frequent moves and short-term stays. Our team will offer you a full overview of each rental applicant and his or her likelihood to become and remain a reliable tenant who pays on time, is a good neighbor, and takes good care of his or her home and your property.
Contact us today to learn more about tenant screenings, common red flags and how to deal with them to protect your interests.