Types of background checks landlords should use when renting

While it would be nice if every renter could be a model tenant, landlords have to be careful when renting homes or apartments out. It’s a fine line to walk; you want to have great tenants living in your rentals, but that requires conducting a few types of background checks. You should absolutely run the following types of background checks:

• Credit checks — You’ll want to make sure your potential tenant doesn’t have any glaring problems in his or her credit history, such as frequently missing payments, bills being sent to collections or bankruptcies. Problems such as these may indicate financial irresponsibility, which you may pay for later.
• Criminal background checks — Does the tenant have a criminal history? How long ago was the conviction, and is there evidence that the person has been rehabilitated? Use your best judgment, because you need to keep your other tenants safe. Be aware of sex offender laws as well; if your residence is located near a school or daycare, state and federal laws dictate how close a sex offender can live to the facility.
• Employment checks — It’s a good idea to contact the renter’s employers, present and past, as it will give you a good picture as to the person’s level of responsibility as well as whether his or her income will allow for the cost of rent each month. Follow up on these references to ensure the applicant has been honest.

• Inform the tenant about conducting checks — The Fair Credit Reporting Act requires landlords to disclose that credit checks will be conducted. It also gives potential tenants the option to see their report if to check for inaccuracies, if they are going to be overlooked because of something on the report.
• Watch out for discrimination — It is illegal to discriminate against a potential tenant due to race, religion, gender, ethnicity or disability under the federal Fair Housing Act. Be mindful of this when conducting background checks. It is a good idea to have an across-the-board screening policy in place that is mandatory for all potential tenants.
• Find out previous residences — Did your potential renter just move from out of town? Get a driver’s license number and previous addresses. If your renter is from a different state or county, you’ll want to conduct local checks in those locations in order to ensure they aren’t trying to outrun a criminal history. Plus, getting the addresses of previous residences allows you to get in contact with previous landlords, so you can get a better picture of your new tenants.