If you’re a property owner or landlord, then you know that background checks are an important part of the rental process.
You need to make sure that you’re renting to responsible and qualified tenants.
Paying attention to history helps attain tenants who will pay their rent on time and take care of your property.
In this article, we’ll discuss what goes into a background check for renting, why it’s important, and how to conduct one yourself.
We’ll also go over what to look for in a tenant report.
Understanding this information will help you make the best decisions possible about who to rent to.
What Is a Rental Background Check?
A rental background check is a process by which you screen a tenant’s background for red flags.
Landlords use background checks for the following reasons.
- Determine if a potential tenant has a criminal history
- Check if a tenant owes money to previous landlords
- Screen for any past illegal activity
The goal of the background check is to paint a full picture of the potential tenant.
It helps landlords make an informed decision about which tenants to rent to.
What Does a Rental Background Check Consist Of?
You will find many different items in a rental background check.
The most common components are a criminal background check, a credit check, and a rental history check.
Some landlords may also request information about the potential tenant’s employment history, education, or social media profiles.
How Long Does a Tenant Background Check Take?
The length of a tenant background check varies depending on the provider.
You’ll see results for most background checks within 72 hours.
How Much Does a Tenant Background Check Cost?
If you’re wondering how much a tenant background check costs, it typically ranges from $30 to $70.
Why Is Tenant Screening Important?
There are three main reasons why tenant screening is important.
Let’s explore those three factors in detail.
3 Reasons to Do a Rental Background Check
Here is why you want to conduct background checks on your tenants.
1. To Gauge Tenant Interest
When you’re advertising a rental property, you need to gauge interest from potential tenants.
A background check can help you determine if the potential tenant is serious about renting from you.
If a potential tenant refuses to undergo a background check, then that’s a sign they have something to hide.
It’s best to avoid renting to tenants in this category.
2. To Protect Yourself
Screening tenants is one way to protect yourself from bad renters.
It helps weed out people who may not pay the rent or who may cause damage to your property.
It’s also a way to protect yourself from potential lawsuits.
If you rent to someone without doing a background check, you open yourself up to unnecessary risk.
For example, you could get into legal trouble if they cause damage and injure someone.
Screening tenants is one way to help protect yourself from these types of situations.
Tenant screening is also important for protecting other tenants.
By screening all of your tenants, you can help ensure that you’re not renting to someone with a criminal background.
Focusing on this will keep your other tenants safe and secure.
If you have a good tenant background check process in place, it’s easier to evict someone when they’re not paying rent or when they cause damage to your property.
3. For Peace of Mind
Knowing that you’ve done your due diligence brings peace of mind.
Screening all tenants can alleviate some of the stress that comes with being a landlord.
You’ll manage the property more effectively when you’re confident in the people living there.
How to Do a Background Check on a Tenant
There are certain things to pay attention to as you go about conducting tenant background checks.
Get Signed Consent
Before you can run a background check on someone, you need their written consent.
The potential tenant must sign a release form authorizing you to conduct the background check.
You can usually get this form from the background check provider.
Make sure that you keep a copy of the signed release form on file.
Choose an Approved Background Check Service
Some background check providers provide better services than others do.
Make sure to use a background check service approved by the Federal Trade Commission (FTC).
The FTC has a list of approved background check providers.
You can also check with your state’s Attorney General’s office to see if they recommend any specific background check providers before you apply.
Make a Plan Ahead of Time on How You’ll Use the Information
Before you run a background check on a tenant, you need to know what you’ll do with the information.
Will you deny tenancy to anyone with a criminal record?
What about someone who has a bad credit score?
Make these decisions ahead of time so you’re not making any snap judgments after getting the background check results.
What to Look for on a Background Check Report
Once you have the background check report in hand, what should you look for?
There are a few key things to pay attention to.
Tenant Credit Report
A tenant credit report will show you the potential tenant’s credit score.
It reveals how long they’ve used credit accounts.
You’re looking for red flags such as a low credit score.
Look at the total amount of debt that the potential tenant has.
If the potential tenant has a lot of debt, they may be unable to afford rent.
You should also look at the potential tenant’s credit history.
Have they always paid their bills on time?
Or, is the credit history full of late payments or defaults?
If the potential tenant has a low credit score, has a lot of debt, or has a bad credit history, that’s usually a sign that they’re not good at managing money.
Tenant Criminal Report
A criminal background check will show you any arrests or convictions that the potential tenant has.
See if the applicant brings a history of violent crimes or drug offenses to your property.
If the potential tenant has a criminal record, that doesn’t mean they’re automatically a bad tenant.
It’s something you’ll want to take into consideration when making your decision.
Tenant Eviction Report
You never want to see that your potential tenant’s history includes past evictions.
It’s not a good sign.
It could mean that they’re not good at following rules and regulations.
Or, maybe they’re difficult to work with.
Scan the eviction report.
Look for evictions that occurred in the past two or three years.
If the potential tenant has a history of eviction, you may want to go with someone else.
Income Insights Report
An income insights report will show you the potential tenant’s income and employment history.
You’re looking for clues that the potential tenant may not be able to afford rent.
For example, if the potential tenant hasn’t worked in a long time or has a low income, you may encounter months where they don’t pay rent.
You should also look at how long the potential tenant has worked for their current employer.
When comparing two tenants, you should probably select the one that’s worked longer at their job.
It doesn’t guarantee anything in these uncertain times.
It does help you select tenants with stability tendencies.
Best Tenant Screening Services
Your job as a landlord is to select the best possible screening service to help you obtain tenant background checks.
Here are four of the best screening companies to consider for your property.
RentSpree provides services that range from tenant payments to tenant screening.
One of the benefits of using RentSpree is that you can get background checks on potential tenants for free.
You simply need to create a free account and input the applicant’s information.
The free account lets you obtain online signatures, handle renters insurance, and take rental payments.
If you go with the PRO plan at $9.99 per month, it adds in the ability to upload renter documents to a portal.
You can also use the automated reference checks feature on the PRO plan.
American Apartment Owners Association Tenant Screening
The American Apartment Owners Association (AAOA) offers tenant screening as part of its benefits package.
When you become a member of AAOA, you have access to criminal background checks, credit reports, and eviction reports.
You can also use their services to find qualified tenants.
If you’re not a member of AAOA, you can still access their tenant screening services for a fee.
The association gives you a choice between five tenant screening options.
- Basic – $19.95
- Red – $29.95
- White – $35.95
- Blue – $39.95
- Gold – $49.95
The Basic service will give you a state-specific criminal and eviction report.
You’ll also see a printout of the potential tenant’s address history.
Using the Red plan adds in a credit report and score.
When choosing the White option, the AAOA adds Terrorist, Sex Offender, and Federal searches.
The Blue option gives you the option to charge tenants for the screening process.
Corelogic MyRental Tenant Screening
Corelogic’s MyRental tenant screening service is one of the most comprehensive background check services available.
It offers criminal, credit, and eviction reports.
You can also access employment and rental history information with the service.
The CoreLogic service is unique in that it offers a “smart search” feature.
The option allows you to search for potential tenants by name, social security number, or address.
You can also choose to have email alerts sent to you when new information is available on a tenant.
The cost of the Corelogic service ranges from $24.95 to $34.95, depending on the features you choose.
Cozy.Co Tenant Screening
Cozy.Co offers a tenant screening service that is free to use.
The company offers credit reports, criminal background checks, and eviction reports.
You can access data on the potential tenant’s current and past landlords.
The company also offers a $50,000 damage protection policy for landlords who use its services.
Frequently Asked Questions
You may still have a few questions about what to do when screening your tenants.
Here are four of the most frequently asked questions about the issue.
How Long Does a Background Check Take for an Apartment?
The background check for an apartment can take anywhere from a few days to two weeks.
The time it takes to complete the check depends on the service you use and the amount of information you need.
Typically, you’ll get the report back within 48 to 72 hours.
How Long Does an Eviction Stay on a Tenant Screening Report?
Evictions stay on a tenant screening report for seven years.
The eviction will remain on the credit report for the same amount of time.
What Are the Best Questions to Ask Potential Tenants?
Some of the best questions to ask potential tenants include the following:
- How long have you lived at your current residence?
- Do you have evictions or bankruptcies in your past?
- Do you have any pets?
- What is your occupation?
- How many people will live with you?
- What is your monthly income?
- Do you have secondary sources of income?
- Can you provide proof of rental history or employment?
How Extensive Are Background Checks for Apartments?
Most background checks for apartments are fairly extensive.
They will include a criminal background check, a credit check, and an eviction report.
Some services offer employment and rental history reports.
You may also want to consider a service that offers tenant screening through Social Security numbers or addresses.
Rental background checks are an important part of the tenant screening process.
By using a background check service, you can rest assured that you’re getting the most accurate information about your potential tenants.
Services like Corelogic MyRental, RentSpree PRO, the American Apartment Owners Association, and Cozy.Co offer comprehensive background checks that include criminal, credit, and eviction reports.
You can also access data on the potential tenant’s current and past landlords with these services.
Take action today by choosing one of the four screening services we gave you.