Finding the right tenant for your rental property is a critical step that requires thorough diligence. While it might be tempting to accept a seemingly ideal tenant with cash in hand, skipping essential checks can lead to financial and civic liabilities. Here’s why due diligence during tenant selection is non-negotiable:
- Financial Responsibility: Conducting credit and background checks helps verify if the prospective tenant has a history of timely rent payments and financial stability. This ensures they can afford the rent without defaulting.
- Community Welfare: Screening checks also assess if the tenant poses any risks to the neighborhood’s safety and well-being.
Before accepting applications, it’s crucial to:
- Choose a Screening Company: Research credit and background check providers that fit your needs, typically costing around $50 per applicant.
- Utilize Rental Applications: Provide applicants with a comprehensive rental application form. Verify their identity, income through pay stubs or bank statements, and details about all occupants and pets.
- Process Applications: Once filled out, submit the application to the screening agency and await results (usually within 24-72 hours). Concurrently, verify employment and contact past landlords for references.
When checking references, inquire about:
- Adherence to lease terms
- Rent payment history
- Past eviction or lease termination
- Likelihood of renting to them again
- Notify Applicants: If the applicant meets your criteria, inform them of their approval and set move-in details. If not, notify them promptly and in writing, stating the reason for rejection (e.g., credit history).
Common reasons for rejection include:
- Insufficient rental history
- Poor credit, evictions, or outstanding collections
- Criminal convictions related to drug manufacture or other serious offenses
Completing thorough due diligence ensures you select a responsible tenant who respects your property and maintains a positive landlord-tenant relationship. Investing time and resources upfront helps mitigate risks and fosters a successful rental experience for both parties.
We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.
