Tenant Verification
Did you know, when we surveyed owners last summer to see what they most look for in a property manager, 78% cited finding great tenants as a top priority? That’s no surprise for most of us: tenant verification is one of the most important jobs property managers have. In fact, tenant verification is arguably the most critical part of the leasing process.
But how can you verify tenants to make sure you get the right folks into your properties? Here are five inquiries you should conduct.
1. Check Credit History
Credit history and background checks are the most commonly conducted components of tenant verification. Credit reports will generally cover 7-10 years and can quickly uncover a history of financial instability. What should you be looking for in a tenant credit check? Here are a few red flags to inquire about:
- Bankruptcies
- Late payments for rent or bills
- Default on bills or payments, including loans
- Are they financially established enough to have any credit history
- Low FICO score (under 650)
2. Check Criminal History
Credit history will only tell you so much about a tenant, so it is important to be thorough about criminal background checks, too. What you don’t check today could return to haunt you. Be sure your tenant screening software or tenant verification service will check:
- Most Wanted databases
- Multi- state criminal background checks for felonies and misdemeanors
- National Sex Offender public registry
3. Check Eviction History
Another important thing to know when you run a tenant verification is whether or not your applicant has ever been evicted from a rental. Evictions can cost an average of $3500 and take weeks. Be sure your tenant screening report includes:
- Tenant judgment for possession and money
- Unlawful detainers
- Tenant judgments regarding rent
- Failure to pay rent
- Writs or warrants of eviction
4. Check References
Once the tenant background check is complete, many property managers will skip an important step, checking references. Assume that any references given will be positive, but do push for numbers of all former landlords. Thoughtful questions can still turn up areas of concern. Here are a few pointers:
- Ask to speak with last three landlords/property managers.
- Ask landlord if rent was paid on time.
- Ask landlord if there were any disruptions.
- Ask landlord if tenant cared for home well.
- Ask landlord if they returned the security deposit.
- Ask landlord if they would rent again to this tenant.
5. Conduct an Interview
Nothing substitutes for a direct interview with your prospective tenants. If they’ve passed all your tenant verification checks, be sure you don’t skip a face-to-face interview. Do follow federal, state and local laws about what you can ask. But don’t forget to ask the applicant these questions (the answers may be revealing!):
- Do you have pets?
- Can you afford the rent?
- Will you be able to pass a background and credit check?
- Why are you leaving your current place to live?
- How many people will be living here. (Can I meet them, too?)
- When would you be moving in?
One final piece of advice: do consider using a tenant screening solution such as Buildium’s that includes a clear yes/no recommendation with each tenant verification. As a general rule, you should choose a tenant who has a steady work history, a decent credit score, a salary that’s two to three times more than what you charge for rent, and good references—and one you feel personally good about.