Oct 05, 2021 MicroBilt News
It’s well known that owning real estate is one of the most efficient ways to increase your net worth. However, managing properties isn’t always a straightforward process.
Not only do you have to find tenants to rent to, but you also need to ensure that you only consider trustworthy individuals.
Background screening is a property management tool that simply can’t be overlooked. Let’s take a look at everything you need to know about it.
You Can Ensure Your Tenants Can Pay Their Rent
As you might guess, ensuring that your tenants are able to pay their rent on time is one of the most prominent attributes of running a background check. Otherwise, you can easily find yourself in a stressful financial situation.
This is especially true for those who use rental payments as their primary form of income.
In context, this aspect of the tenant screening process allows you to gain insight into various factors. For example, you are able to take a look at the potential tenant’s monthly income and determine whether or not they are able to make rental payments each month.
In general, it’s highly recommended that you only rent to tenants who have a monthly income that is at least triple that of the proposed rent. Under these circumstances, they should have enough money left over after handling other financial obligations.
You can also learn more about their credit score, something that gives you an idea of how responsible they are with their finances.
If a potential tenant is right on the cusp of the triple income threshold but they have a rock-bottom credit score, you may want to think twice before you rent to them. This is particularly true if you have other applicants who excel in both categories.
Prevent Potential Evictions
Evicting a tenant is a long and arduous process. Unfortunately, there may come a time where you need to do so.
For instance, let’s assume that there is no outstanding issue with your tenant’s income and you decide to rent to them. However, they also begin violating other terms of their lease.
They might own pets despite the fact that the lease prohibits their presence on the property. In extreme cases, they can also engage in illegal drug-related activity.
By screening tenants before you allow them to reside at your property, you will gain valuable information about their rental history. More specifically, you’ll be able to determine whether or not they have been evicted in the past.
In the event that they have previous infections on their record, chances are they won’t be the ideal candidate. There are, however, certain circumstances where you may wish to reconsider.
Renting to a friend or family member who was evicted under false terms, for example, could be a scenario in which you let these criteria slide. In general, however, it’s recommended that you look for other tenants instead.
Gain Insight Into Their Criminal History
It should come as no surprise that it’s in your best interest to avoid renting to someone who has an extensive criminal history. The type of crimes they have been convicted of also plays a significant role.
After all, there’s a strong difference between someone who was charged with misdemeanor possession of marijuana and someone who has been convicted on multiple occasions for violent offenses.
As a landlord, it’s your responsibility that you only rent to tenants who won’t cause issues within the community. In general, anyone who has been convicted of a felony charge is someone that you should avoid renting to.
This is true even for nonviolent or non-drug-related crimes. In most scenarios, you shouldn’t have any trouble choosing from a pool of worthwhile applicants.
Even if you have to wait a bit longer to find a suitable tenant, it's easily worth doing so to prevent potential complications from arising.
Microbilt offers a wide range of tools that landlords can take advantage of when screening tenants. You can check out this page to learn more about them.
Avoid Damage to Your Reputation
If you rent to tenants who cause trouble, it could damage your reputation as a landlord. This often comes into play for those who own properties where multiple residents live within the same building.
To clarify, you may actually have some of your current tenants move out and relocate if you convey that you are willing to rent to people who cause a strain within the community. A situation like this could easily spiral out of control and cause you to lose a significant amount of income.
Peace of Mind
Managing property can be a highly stressful process. This becomes exponentially more true the more properties that you own.
Screening each tenant before you choose to rent to them will give you much-needed peace of mind. This will allow you to focus on other obligations in your life, such as spending time with your family, handling another job, etc.
So, keep this in mind moving forward — this is a factor that you should never overlook.
Using This Property Management Tool Is Crucial
Otherwise, you may find yourself in a situation that is difficult to accommodate. By using background screening as a property management tool, you’ll ensure that all of the tenants you choose to rent to are as easy to work with as possible.
Want to learn more about what we have to offer? Feel free to get in touch with us today and see how we can help.