Jul 07, 2020 MicroBilt News
During this time of pandemic and its financial disruptions, protecting yourself from a bad tenant has become even more urgent.
One way to protect yourself and your property is to know your tenants. This means conducting a thorough background check as part of the rental application. The background check helps you first to verify the identity of the person applying, and then to determine whether anything in their history indicates that they would be a problem tenant; for example, poor credit, evictions, or a criminal record. It also can verify employment history.
The Federal Trade Commission tracked about 651,000 instances of identity theft last year. Individuals with criminal records or undesirable rental history may steal the identities of others with a good rental history. ID verification can help you avoid being taken in by this scheme.
Poor Credit and Evictions
Past behavior is a good predictor of future behavior, especially habitual behavior. If a prospective tenant has a habit of paying rent and other bills on time, they are likely to continue to do. Examining a tenant's previous handling of credit can provide a picture of how they will handle future obligations. Credit-decisioning products can help you check their credit through the three traditional credit bureaus -- Equifax, Experian, and TransUnion, as well as through an alternative agency, PRBC. A public records search of judgments, evictions, and liens also can provide useful information to use in evaluating a prospective tenant.
The FBI has criminal files on more than 77 million individuals or about one in 3 Americans, according to the Wall Street Journal. The high number of individuals with criminal records demonstrates that you can no longer assume that person applying to rent your apartment is not a criminal. As a landlord, you are required to provide a safe environment for your tenants. You also want tenants who will respect your property. Conducting a criminal background check is one way to screen out those tenants that may threaten the safety of other tenants or damage your property. Microbilt has eight criminal background check products available; Rapsheets Criminal Database Search performs the most comprehensive search, examining court records, Department of Corrections records, and law enforcement records.
Collecting copies of potential tenants' paystubs may provide some income information, but they don't tell the whole story. For example, the applicant could have worked overtime or earned extra wages this year that aren't typical and won't be sustained in the long term. Talking directly to the employer can help verify employment as well as the likelihood of continuing income.
Microbilt offers MBx, a customized tool that allows you to combine many of our tools into one package.
By being vigilant in your tenant selection process, you can protect your property and your rental business in this financially chaotic time.