Rental properties can be a great first or second form of income. If you properly screen prospective tenants and keep up on the property maintenance the income just rolls in month after month. Whether you are a new landlord who is just renting your first property or you have multiple listings from coast to coast, proper renter screening makes the difference between a nightmare and a dream.
Quality screening of prospective tenants involves several things. The most common background check is a credit check. This can give a landlord the security of knowing the tenants payment history and how they manage their debts and finances. The red flags here are a high debt to income ratio that would show likely problems if there was a crisis such as a lost job or an accident. A credit check would also show non-payment issues that would tell you ahead of time that the candidate has had trouble in the past paying their commitments. More specifically, a bankruptcy search would list previous bankruptcy filings, a judgment search shows court filings by or against a candidate, and a foreclosure and eviction search would show previous problems that hint at possible troubles that might be best avoided.
Beyond these white elephant issues, a quality tenant screening would verify current and previous addresses, get feedback from previous landlords and provide employment verification that altogether would give you as a landlord the knowledge to make an informed decision on who to rent to. All this information would be rated by a formula that has been used thousands of times and presented to you in a concise, report that gives you very clear answers. The feeling of security from this knowledge and the potential savings and problem avoidance make quality screenings one of your best investments.
Contrast this with the do it yourself version: You create a document for your prospective tenant that includes address history, landlords, references and info such as social security number and credit info. Now you start with a list of phone numbers, tracking down specific people, getting information and deciding on the validity of each reference. Then you have to deal with previous landlords who may or may not be willing to help, verify previous addresses, and try to get a picture of your new tenant or will that be headache. You still must deal with 1-3 credit rating agencies that will give you either too much or too little information and charge you for the privilege. Now add that all up and make a decision whether or not you want to rent your facility to this candidate. Now repeat this with everyone who is interested. This can obviously take up days of your time and be of very limited utility.
If you are renting property, do yourself a favor and let the experts do the tenant ratings for you. The peace of mind, ease of use and quality of information are easily worth the cost and are a fraction of what it costs to do it yourself. Tenant Screening (Property Guard) is the leading provider of services to landlords and real estate investors.
