Screening tenants is essential for connecting with the best quality renters possible. Inadequate screening can lead to nightmares down the road, including lost rent money, damage to the property, and lawsuits from other tenants. Tenant background screening can identify a range of problematic issues in potential tenants, also known as tenant screening red flags.
Here are the top 5 Tenant Screening Red Flags:
1. Bad Credit
The credit report and credit score of an applicant can reveal tenant screening red flags and is extremely valuable in determining if they can be relied upon to pay their rent going forward. The credit check conducted during a professional tenant screening can unearth financial issues as well as problems with trustworthiness and paying on time.
2. Bankruptcy
Tenant screening and financial background checks can also determine if a tenant has declared bankruptcy. While it is a testament to the client’s money management history, it could actually indicate better news than just having bad credit. If the bankruptcy occurred recently, the individual may have a clean financial slate with no debts at this time. However, if the bankruptcy was several years ago, be wary if the applicant has already begun to amass personal debts again.
3. Criminal History
In most cases, landlords will want to steer clear of renters who have criminal backgrounds. Felonies are particularly problematic, and crimes involving drugs and/or violence are major tenant screening red flags. However, even white collar crime should give landlords pause, since this indicates problems with character and honesty.
4. Sexual Offenses
Each municipality has a sexual offender registry, and a professional tenant screening service can assist with finding out if an applicant is on it. Renting to a past sexual offender can be a huge potential risk to people in the area, especially if the offenses were committed against children.
Clearly, professional tenant screening is extremely important in learning more about rental applicants. However, there is another key tenant screening red flag for which landlords should screen…
5. Insufficient Income
The general guideline for housing cost is that it shouldn’t be more than one-third of the total household income. This is why knowing each applicant’s current employment status and income is so crucial. Persons who aren’t earning at least two-thirds more than the rent cost could pose a financial liability for landlords down the road.
Adequate screening of tenants is crucial to connecting with high-quality renters. A professional screening service can assist with finding many tenant screening red flags before it’s too late.
Source: http://www.forbes.com/sites/moneywisewomen/2012/02/16/screen-tenants-without-getting-yourself-into-trouble/
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