Finding good tenants is essential for rental property owners. The majority of landlords want reliable tenants who will pay rent on time, keep the property in good condition, and will avoid causing problems with the neighbors as well. Though many renters are responsible, it only takes one bad apple to cause major issues. Read this guide as we will share how conducting tenant background checks is an important part of the rental application process.
What is a Tenant Background Check?
A tenant background check is a screening report that provides relevant information on an applicant’s past rental history, criminal history, credit standing, and identity verification. It is created by accessing public records and proprietary databases containing a person’s background information. To avoid rental property problems, you must know how to check your tenant’s rental history.
Comprehensive tenant background reports typically include the following:
- Rental history: This includes any records of evictions, property damage, lease violations, non-payment of rent, and landlord references. This data comes from court records and contacting previous landlords.
- Criminal history: This involves all arrests, convictions, and sex offender status. It is usually collected from national, state, and local courts or law enforcement agencies.
- Credit check: Provides credit scores and full credit reports detailing financial responsibility, including bankruptcies, income levels, number of accounts, late payments, and maxed-out cards.
- Identity verification: Confirms the applicant’s SSN, employment status, and aliases to uncover inconsistencies that could indicate higher risk.
Tenant background checks give landlords, leasing agents, and property managers a 360-degree view of who they are renting to. While they can’t definitively predict who will become a problematic tenant, they allow you to make informed decisions by validating information and surfacing past behavior patterns. Thorough vetting is essential for due diligence to avoid unnecessary risk and disruption at your property.
5 Common Tenants Problems
Even well-screened tenants can end up causing major headaches for rental property owners. Several common tenant problems can disrupt operations and cost landlords precious time and money when not handled properly. Here are five frequent issues, along with tips to mitigate risks:
Unpaid Rent
Tenants failing to pay monthly rent on time is one of the most common yet preventable tenant problems. Beyond requiring tenants to have verifiable income meeting a minimum threshold, watch for red flags in credit reports like a history of late payments, collections, and maxed-out cards. Consider using an online rent collection system that automatically charges late fees to reduce instances of chasing tenants for overdue rent.
Early Lease Termination
Tenants sometimes need to move before their lease ends due to job changes or other life events. To combat this, you could build flexibility into rental agreements by allowing subleasing, so you don’t lose income in case someone vacates early. You may also ask tenants to find an adequate referral or replacement renter if they need to terminate a lease. If you do decide to allow subleasing, be sure to spell the terms out clearly and screen all potential sublease applicants to mitigate risk.
Maintenance Issues
Tenants often delay reporting minor maintenance issues, which can spiral into more significant repair problems. To improve responsiveness, implement an online portal where renters can directly submit and track requests 24/7. Also, schedule quarterly inspections to catch issues before they require major fixes. Staying proactive with the maintenance needs of your property reduces out-of-pocket expenses to restore damaged units.
Property Damage
Irresponsible residents who don’t properly maintain units are any landlord’s nightmare. From cigarette burns to broken appliances, repairing damage cuts into profits. Require all tenants to carry a renter’s insurance policy to transfer liability. A renter’s policy protects a tenant’s belongings in case of damage, but can also help landlords recover funds if a tenant causes significant damage beyond normal wear and tear.
Noisy Tenants
When other renters or neighbors frequently complain about tenants playing loud music or having parties – that’s an issue. Clearly state all rules and quiet hours in the lease agreement. If they violate noise policies per your rental agreement, send a written warning with a copy of the lease policy before proceeding with an eviction for repeat offenses. Taking proactive prevention steps and responding promptly to issues as they arise will make your life easier while improving tenant satisfaction in the long-term.
How Tenant Background Checks Can Help Prevent Rental Property Problems
Conducting tenant background checks before leasing to new renters serves as your best defense against potentially problematic tenants. Comprehensive screening reports examine past behaviors that indicate the likelihood of causing issues down the road. If you encounter a problem during a tenant background check, call your property management team in Atlanta to help you along the process.
While certainly not guaranteed, identifying red flags during tenant vetting allows for creating risk mitigation strategies or rejecting high-risk applicants altogether. Specific components of background checks that could raise concern for landlords include:
- Past Evictions – Applicants with a history of eviction can present a higher risk for landlords. If an applicant has an eviction on record due to lease violations, unpaid rent, or property damage, proceed with caution. It’s a good idea to ask them for their side of the story, but watch for a pattern of evictions or any active judgments, as these could indicate ongoing issues.
- Major Crimes – When running a background check, focus on serious convictions within the past seven years that could impact your property or the safety of others. For instance, a history of violent offenses, sex crimes, or felony drug distribution charges may all pose a risk. However, remember that charges alone don’t indicate guilt—so only consider relevant criminal convictions when making your decision.
- Financial Issues – Bankruptcies, collections, unpaid debts, and judgments can signal a higher risk of missed rent payments. To protect your investment, establish clear and consistent financial criteria. Require applicants to provide proof of income at least three times the monthly rent and consent to a credit check. If their credit history reveals frequent late or missed payments, consider it a red flag.
- Reference Issues – Complaints from previous landlords can indicate recurring behavioral issues. Verifying rental history and checking references can provide valuable insight into an applicant’s track record, including how they handle maintenance concerns, care for the property, and make timely rent payments.
Before starting the screening process for your rental, establish a clear, written set of qualifications that align with your risk tolerance. To maintain a fair and consistent approach—and to comply with Fair Housing laws—provide the same criteria to all applicants to help prevent any claims of discrimination.
By analyzing full tenant backgrounds prior to signing leases, landlords have ample data revealing indicators of potential problems. Moreover, understand the vulnerabilities of residents approved despite minor flags so you can closely monitor and intervene with issues immediately if they arise. Following thorough tenant vetting procedures is essential due diligence, enabling better leasing decisions.
Final Words
Finding and retaining good tenants is critical to rental property success. Problem renters can quickly turn an otherwise sound investment into a headache-inducing liability. However, the tenant screening process presents an opportunity to reduce risks through background checks—one of the most valuable tools at a landlord’s disposal. Comprehensive background reports coupled with strictly enforced tenant criteria allow landlords to filter out likely problem applicants on the front end.
Adding proactive policies and prompt response plans for issues positions conscientious landlords well to take decisive action at the first sign of trouble. Follow strict tenant vetting through background checks to maximize rewards while minimizing rental property hazards.