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Tenant Background Check Services
All landlords and property managers need to have dedicated – and comprehensive – tenant screening processes in place.
Without a tenant screening process, your property is at risk from applicants who omit crucial details from their applications and, at worse, may have caused issues at other properties in the past. And yet, over a quarter (29.16%) of landlords and property managers don’t run a criminal background check on their prospective tenant, with 10% not even running credit checks.
That’s a mistake.
Without a background and credit check, you can never be 100% sure that the person you’re welcoming into your property is somebody who deserves to be there.
Whether you oversee a house, apartments, or any other form of rental property, TruDiligence can screen prospective tenants to ensure that you only welcome people who respect your property.
Why Do You Need a Tenant Screening Report?
We can make a simple case for conducting tenant background checks – many prospective tenants purposefully omit information from their applications to get into your property. But if that isn’t enough to convince you of the importance of tenant screening, here are five reasons why you always have to look into your prospective tenant.
Get a True Picture of the Tenant’s Financial History
According to the Census Bureau, a staggering 8 million tenants were late on their rental payments at some point during 2022. That represents about 15% of the renting population and showcases a clear challenge for you as a landlord or property manager:
Some tenants lie about their financial histories on their applications.
As a property manager, you need to ensure that your potential tenants have a strong credit score and provable income that aligns with the rent you charge. Income verification and credit checks mitigate the financial risk a tenant poses, ensuring you enjoy more on-time payments and don’t have to worry about cash flow issues affecting your real estate investments.
Guard Against Property Damage
Imagine that you’ve accepted a prospective tenant’s application to live in your property.
The tenant seems okay. They presented a convincing rental history and can prove their income. So, you neglect to look into their criminal history and assume that you don’t need to speak to their previous landlords because you have a “good feeling” about the tenant.
Unfortunately, problems start to emerge once the tenant moves in. Rent payments are often overdue, and the tenant causes so many problems – perhaps even with your other residents – that you eventually make the decision to evict them. But before you can carry out that eviction, the tenant has time to severely damage your property, forcing you to spend thousands of dollars on repairs before you can restart your search for a new tenant.
While that may seem like an extreme hypothetical, bad tenants will often cause damage to properties before they leave. In the U.K. alone, 29% of landlords report having their properties damaged by tenants, with almost 10% being forced to make an insurance claim due to the extent of the damage.
Tenant screening reports mitigate these risks by revealing if a prospective tenant has a track record that would suggest they pose a risk to your property.
Improve the Landlord-Tenant Relationship
It may seem strange to think that a tenant background search might actually improve your relationship with your tenant. After all, the check could be considered somewhat invasive by some, making the property owner feel like the relationship could potentially start on the wrong foot if they initiate a check.
Perhaps that’s why over 29% of property managers and landlords don’t run criminal background checks.
However, you’ll usually find that the opposite occurs. Rather than being upset about being checked, a good tenant will not only welcome the check but will take it as a sign that you operate a professional business. In other words, your checks demonstrate that you care about the property and, by extension, the quality of the tenant who occupies it. That also implies to the tenant that you’ll be responsive and helpful whenever issues arise.
Limit Your Legal Liability
Let’s assume you oversee an apartment block that contains 10 units. One of those units goes vacant, so you fill it as quickly as possible and neglect to look into the tenant’s criminal record. Remember, that isn’t a rare scenario as 29% of landlords don’t conduct criminal background checks on prospective tenants.
Later, the new tenant causes an issue with an existing tenant, perhaps injuring them or damaging their property. Once it’s revealed that you didn’t check into the tenant’s history, you may be liable to pay damages if the injured tenant sues you. After all, they could argue that your lack of checks constitutes negligence that placed them in a dangerous situation.
This is just one example of how not incorporating tenant background checking into your application process can lead to issues later on. But as long as you’ve conducted the appropriate checks – including checking criminal reports – you have a paper trail that proves you do appropriate due diligence on all tenants, mitigating your liability risk in the process.
Minimize Tenant Turnover
Turnover is a fact of property management, meaning it’s something you’ll have to deal with regularly.
How regularly is something that you can control.
Though averages vary depending on the source, the real estate company Swiftlane says that the average turnover rate was 45.2% in 2022. Ideally, you’ll want to fall below that rate. Going any higher means that people are vacating your properties – leaving them empty – and having a direct effect on your bottom line.
Where do tenant checks come into play?
Having troublesome tenants typically leads to higher turnover rates, especially if you’re forced to evict tenants due to issues such as late payment or damage to your property. That’s why it’s so important to use checks to receive all of the tenant’s information – your checks ensure your potential renters are likely to respect your property and rent from you for a long period.
Our Tenant Screening Services
With these five benefits in mind, you now have a clearer picture of why running a tenant background check on every potential renter is crucial. Next – a sample of the services TruDiligence offers to help you find the right tenant.
Check the Applicant’s Credit Report
Any property management business that maintains a business location from which it manages its properties is legally allowed to request a credit report for its potential tenant.
These reports allow you to dig into the tenant’s financial background, often revealing if there are issues in their payment history that might suggest that they’ll be late when making payments to you. These checks will also reveal any tax liens or outstanding loans the tenant has.
Ideally, they’ll show you that your tenant has good credit, meaning you can feel more confident in allowing them to move into your property.
TruDiligence can obtain credit reports on your behalf under the condition that you allow us to conduct on-site inspections of your premises to ensure you meet the criteria for being allowed to make these checks. You can also rest assured that every check we conduct complies with the Fair Credit Reporting Act.
Examine the Criminal Records of Prospective Tenants
Has your potential tenant broken any federal or local laws?
That’s a question you always need to answer because, in some cases, welcoming a tenant who has a criminal conviction creates a liability risk for your business. We touched on this above – the potential for a new tenant to cause problems for existing tenants – with criminal backgrounds also raising the possibility of damage or illicit activities being conducted in your property.
TruDiligence provides both identity verification services – ensuring your applicant is who they say they are – and criminal background checks at the federal and county court level using an array of databases that reveal the true history of your applicant.
These checks result in you learning about the tenant’s arrest and conviction history, enabling you to make a decision that’s best for your business.
Dig Into the Applicant’s Rental History and Eviction History
Examining a potential tenant’s eviction record can give you insight into the likelihood of that tenant being able to pay their rent on time while respecting your property. As a general rule, the more evictions that are on an applicant’s record, the more likely they are to have a negative impact on your property management company’s bottom line.
The good news is that evictions are preventable.
By running a check on a tenant’s eviction records – via the National RegistryCHECK database – TruDiligence provides information about a tenant’s renting history that you won’t get from credit checks alone. Ideally, that means you won’t have to count any of your tenants among the 2.7 million who receive eviction notices per year.
Check the National Sex Offenders Registry
Sex offenses are a serious concern for any property management company, especially because the parole and ongoing conditions related to these offenses often require the perpetrator to live a certain distance away from various types of people.
Most offenders of this nature are required to register with the county in which they live, meaning their names appear on local databases. TruDiligence runs checks on these databases – on a state-by-state basis – to ensure you know if your applicant presents a serious threat to your tenants or isn’t allowed to live in your property according to federal or local laws.
Employment History and Verification
A shocking 29% of tenants have admitted to lying on their applications, with many of those lies relating to their employment. These lies can give you an unrealistic idea of the tenant’s income, which may raise problems with rent payments in the future.
So, you need to verify.
TruDiligence runs full employment verification checks that confirm the places of employment, positions held, and dates of employment that a potential tenant provides to you in their application. If needs be, we may also be able to run checks on the tenant’s income tax returns – via the Income Tax Verification System – to confirm the income the tenant claims and ensure they properly manage their finances.
Often, the best insight you can gain into a tenant’s behavior comes from the people who’ve served as their landlords in the past. Any details about previous landlords that your possible tenant provides on their rental application are followed up in this service, with TruDiligence conducting in-depth interviews to learn more about how the tenant treated their previous property.
That’s not all.
This service is also helpful for confirming the previous addresses that the tenant claims on their application. An interview may show that the applicant never actually lived at the address – a strong red flag that indicates the tenant is trying to hide something from you.
Choose TruDiligence – The Tenant Screening Service That Protects Your Property
All of the above services are available – often as individual reports – from TruDiligence and will help you determine if a tenant is the right choice for your property.
Now, there’s one more question you need to answer:
Why is TruDiligence the best choice for your tenant screening process?
Over 30 Years of Experience
With TruDiligence, you work with a tenant background check company that has over 30 years of helping landlords, property managers, and real estate agents look into the true histories of their applicants. That experience means that all of the rental background checks we conduct comply with local and federal laws – key to ensuring that you don’t have any liability concerns related to your checks moving forward.
A Paperless Service
TruDiligence’s online portal means you have access to a 100% paperless service, with no manual data entry required, where you can check your tenant reports whenever you need to see them. Not only does this reduce human error – no manual input means no concerns over incorrect inputs – but it also ensures you don’t lose documents or have to deal with stacks of paperwork piling up as your property management business grows.
No Contracts and No Obligations
We don’t tie you into contracts where you have to pay us a monthly fee or conduct a certain amount of checks per month to have access to our services. Instead, you choose when to run your tenant background checks, with each one treated – and charged – individually to give you complete control over the tenant screening process.
All of the services discussed here (along with many more) are available via the TruDiligence system. Sign up today to discover how you can make tenant background checks simpler and more accessible with our help. It only takes a few minutes and our experts are always on hand to answer any tenant-related queries you might have.