Before you rent out your property, it is important that you know who you are renting to.If you check into a potential tenant's background, you can discover problems and reduce the risk of having to evict a tenant or make costly repairs after they have left.With a prospective tenant's background information at hand, you're able to make informed decisions to allow this person to rent.
Step 1: Potential tenants need to fill out a rental application.
Sample rental applications can be obtained from your local real estate association.The application will give you all the information you need to conduct a background check on the person.The rental application should ask for the applicants full name, social security number, date of birth, contact information, and driver's license number.Contact information for current and former landlords is available.The names and contact information of current and former employers are included.Credit references are needed for a credit check.There are three personal references.
Step 2: Potential tenants should complete a credit report authorization form.
Section 604 of the FCRA requires landlords to ask permission to do a credit check.You must have a completed credit report authorization form in order to comply with the FCRA.You can deny a potential tenant the ability to rent the property if they refuse to sign a credit report authorization form.
Step 3: In person, interview the person.
If you interact with this person frequently, you want to make sure they are friendly and respectful, and that you are comfortable with them as a tenant.Potential tenants are asked why they are moving.Are they housebroken and have any pets?Do they smoke?Is it inside or outside?Who will be living with them in the future?Is there any friends or relatives who spend the night with them?What is their day like?Is it possible that they work nights?Is it possible to pay the first month's rent and security deposit before moving in?
Step 4: Credit reports can be obtained for the person.
Tenants who are financially stable and reliable can be identified with a credit report.You will see information on the credit report about foreclosures, bankruptcies and evictions.A credit score for the tenant will be provided by each credit company.Credit reports can be obtained online from the three major credit reporting bureaus by setting up an account online and following the instructions for making a request.The name and address of the agency that reported the negative information must be included in the adverse action letter if you deny an application because of it.
Step 5: You can get a background check from a verified tenant screening company.
The background check will show a number of things, including the name on the sex offenders database, whether he or she damaged any property, and whether they paid rent on time.This will help you identify honest rule-following tenants.To get a background check on a potential tenant, you must use an approved Consumer Reporting Agency.A list of approved CRAs for tenant screening has been compiled by the Consumer Finance Protection Bureau.Depending on the items selected to screen, a tenant background check can cost anywhere from $20 to $50.Tenants can be asked to pay an application fee to cover the background and credit checks.
Step 6: Contact the employer of the person who is applying.
You can determine if the potential tenant is able to pay the rent by checking the employment and income information supplied by the applicants.For example, ask if the person is employed by you.Does the person have a fixed income?Is this a full-time job?How much is the person's current wage?
Step 7: Contacts the previous landlords of the application.
This is your chance to understand the application.The person as a tenant can be told by previous landlords.How long did the person rent the property from you?Did they pay their rent on time?Did they break the lease agreement?Did they cause any damage?Did anyone have complaints from other tenants or neighbors?Why did the lease end?Would you rent this person again??
Step 8: Contact the applicants' personal references.
Friends and family who have known the person for a long time will be able to give you information about his or her character, demeanor and manner.How long have they known the person?Is the person reliable?Would they recommend this person to a landlord?