Are you thinking about renting your first house out? If so then you should only rent to tenants with a good credit rating, make no exceptions for tenants with a better personality or a positive credit rating.
If you’re only just starting then there are many tenant screening mistakes that you can make. Luckily this guide can help you avoid many of the pitfalls you are likely to encounter in the tenant screening process.
Here’s everything you need to know.
1. Getting the Wrong Tenant Documents
To ensure that applicants meet your screening requirements, you should conduct a tenant law report, criminal record check, and eviction check before taking a lease decision. If you come across an applicant who wants to give you his credit report directly, you can skip the formal review of tenants altogether.
Ask for work experience references, past addresses, monthly pay packet statements, and references.
However, steer clear of specific questions on things like spouses by allowing room for a list of adults and other categories protected by the Fair Housing Act.
You want to inform your applicant that it is against your policy to conduct your own background check and receive a copy of the report from a consumer reporting authority.
2. Not Checking Credit Reports
Think twice before accepting an applicant’s credit report if it is outdated or inaccurate.
The best way to get a great tenant background check is cross-referenced to information from pre-qualification interviews, rental applications, supplementary documents, and tenant credit checks.
3. Not Using Tenant Screening Services
Considering hiring a service that helps landlords reduce the risk of rental fraud by using prevention tools including tenant screening and tenant background checks in the United States and Canada, criminal background checks, and eviction reports in the U.S.
Tenant screening services are consumer reporting centers (CRAs) that provide background data on tenant applicants.
These include bankruptcy judgments, liens, credit reports, the status of sex offenders, criminal records, evictions, and employment records.
Reports that tenant screening services are helping landlords get a clear picture of who they are and who tenant applicants are before they decide to rent.
You also ask for info from Reedy and Company to establish what information you need to include in your rental agreements. They’ll also be able to assist you in coming up with great tenant interview questions.
4. Not Doing Background Checks
A background check can tell you whether a tenant has been convicted or not of a crime. An eviction check can tell you whether a tenant should be evicted from a rental apartment.
Background checks provide important information about a tenant because a landlord may be held responsible if a renter carries out a criminal act whilst at the property.
A landlord may ask his tenant to submit a rental application and consent to a background check, including a credit report and a reference conversation with a previous landlord.
When applying for a lease, applicants must take an oath. This states that anything they say is correct and complete. Remember background checks for tenants do take time.
5. Not Ensuring Honest Submissions
This ensures most people will be honest in their submissions. Rental applications that accept a background check include a credit report and speak to the landlord’s previous references.
This ensures renters don’t lie about their tenants’ past behavior toward the previous landlord by forcing them to complete the information under oath.
Screening reports give landlords an insight into how well an applicant performs as A tenant depending on their previous renting experience.
One example is if a landlord sees a history of late rent payments, they can be evicted for no reason in many cases. Landlords check whether the applicant earns enough money to pay their rent each month.
There are so many options for tenants that even if they are not eligible for your property, there will be a suitable option for them.
6. Charging the Wrong Fees
If a landlord charges a fee for the screening, he should inform you in writing what the screening involves and what information will lead to the application being rejected. Some landlords charge prospective tenants the actual cost of the review, which may be a fee.
Another crucial step is to use a reputable inspection service. Credit, criminal and eviction reports can help you find a potential tenant.
Landlords, estate agents, and property managers can benefit all from the efficiency of tenant screening services. TransUnion SmartMove is an online tenant verification solution that provides solid reports, amazing convenience, and great tenants.
7. Being Unaware of Exceptions
Some tenant screening companies do not disclose information about a tenant’s past if they have been through violence, sexual assault or you have had to file a restraining order on a stalker.
This includes information on whether the tenant had a protection order or had breached a tenancy agreement because of domestic violence.
Explain as soon as possible that applicants should find out how to get their documents in time, which is not always the case. By law, an eviction eight years ago cannot be cited as a reason to reject a tenant.
However, eviction logs can be kept in the background report for up to seven years if federal law is incomplete or ignores relevant facts such as the fact that the tenant has avoided eviction by repaying the rent.
Some tenant screening companies do not include eviction data in the report, which is not in the interests of landlords. Use FCRA-certified screenings to include reportable data in tenants “background reports. It is important data should be included at the most basic level of the report.
8. Not Checking Recent Legislation
The rental industry has used its political power to remove a portion of the bill which would have prohibited the inclusion of information about domestic violence in tenant vetting reports.
One is an addition to the Fair Credit Reporting Act which was introduced in Congress in August 2020. According to the amendment, the so-called Tenant Protection Act, only eviction protocols that are older than three years and lead to a judgment that cannot be challenged are permitted.
Don’t Make Tenant Screening Mistakes
There are many tenant screening mistakes you can make when you are first starting as a landlord.
You don’t want to end up with the wrong tenants. This is sometimes easier said than done. However, you can protect yourself by ensuring that you follow the law and you ask your tenants to complete the correct background checks.
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