Paying for an extensive tenant background check could be the best investment a landlord can make when considering new renters. Laying the money down for tenant screening can easily be the defining line between positive cash flow and lost profit when it comes time to evict insubordinate renters.
Tenant background checks range from $25.00 to 75.00, depending upon how far you want to dig into the past of potential tenants. Regardless of how much you decide on, screening tenants is an integral piece to the rental business. Neglecting to perform a sufficient background check is the equivalent of purchasing a car you’ve never driven, so make it a permanent rule for your rental business. Below are five reasons to consider tenant screening.
- Liability – This can ensure that a landlord wont be pursued legally if the tenant engaged in illegal activity in the rental unit (ex. if tenant sells drugs out of apartment). If your tenants commit an illegal act on your property, you’ll be able to have their screening results on file.
- Property Damage – Did the previous landlord of this prospective tenant try to sue them for damages? Keep the violent vandals out.
- History Repeats Itself – As the old maxim goes, “the best indicator of future behavior is past behavior.” The best case scenario here is you end up with a renter who pays on time and inflicts average wear and tear on your property. The bad is you get a bad tenant who creates drama, doesn’t pay on time and tears up your property.
- Early Lease Termination – Keeping a threat of contact with a tenants former landlords, employers and/or professional and personal references might be enough to keep renters from breaking their lease early. If a past landlord has evidence of this act, that information is beneficial to you.
- Payment History – Scanning through a tenants credit history is the tell-tale sign of whether or not they’ll leave you holding the bag, forcing the dreaded eviction process.
It goes without saying that these tips are very much common sense based, especially if you’ve been in the rental business for awhile. These are still priceless tidbits to reconsider the next time you want to go from the gut when signing a prospective tenant.