What to look for in a tenant background check

Paying a tenant screening service to provide you with thorough tenant screening reports doesn’t make a bit of difference if you don’t take the time to read through them, carefully discerning the most important information to help with your decision of whether or not to rent to that particular applicant.  

Here are a few landlord tips for what to look for when poring over the tenant background check and application:

• Take careful note of any collections flags. Applicants with collections actions against them are much more prone to skipping payments or requiring eviction proceedings sometime down the road – and you don’t want that to be your road.
• Calculate the income to rent ratio. Tenants who make less than two times the rent amount are more likely to pay late, skip rent or stop paying all together. Also, if possible factor in the average amount for utilities at your rental property (something you already should know) as well as any loan amounts or credit card balances listed on the tenant credit check. Adding up all those expenses against the applicant’s income will give you a pretty clear picture of whether or not they are likely to be able to meet their financial obligations to you. Conversely, tenants who make more than three times the rent amount are much less likely to have payment issues.
• Be very wary of tenants who don’t have a bank account and only want to deal in cash. This can often be a sign of a problem, either with the person’s credit history or with their criminal record.

Contact ATS Inc today to find out how we can help with your tenant screening services. 

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Landlord can’t evict tenants for being Bears fans

We’re not sure how legitimate this claim is, but it gave us a chuckle and brought up a decent point about discrimination in the business of property management, so we thought we’d pass it along:

A landlord recently posted on the Landlord Protection Agency forum asking about the legality of evicting tenants who supposedly lied on their tenant application about being fans of the Green Bay Packers. After the couple moved into the home – which is within walking distance to Lambeau Field – they placed lawn ornaments, flags and other paraphernalia outside the home proclaiming to be Chicago Bears fans. This drew the ire of the absentee landlord, a Packers fan who is renting out his home until he retires in a few years and heads back to his beloved Green Bay.

According to the landlord, the tenants’ Bears paraphernalia had angered the neighbors and he was wondering if lying on the tenant application was grounds for eviction. The short answer is no. Lying about one’s employment or criminal record could be grounds for an application to be rejected, but someone’s affiliation with or involvement in a particular club, sport, team, church or other organization is protected under privacy laws. It’s unlawful to deny housing based on something that does not threaten the life or well-being of anyone, and is none of the landlord’s business.

While we’re on the subject, let’s also review the Fair Housing Act (Title VIII of the Civil Rights Act of 1968), which outlawed:

• Refusal to sell or rent a dwelling to any person because of race, color, religion, sex, or national origin.
• Discrimination based on race, color, religion or national origin in the terms, conditions or privilege of the sale or rental of a dwelling.
• Advertising the sale or rental of a dwelling indicating preference of discrimination based on race, color, religion or national origin.
• Coercing, threatening, intimidating, or interfering with a person's enjoyment or exercise of housing rights based on discriminatory reasons or retaliating against a person or organization that aids or encourages the exercise or enjoyment of fair housing rights.

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Landlords, increase your luck by utilizing a professional tenant screening service

Every landlord seems to have a horror story of a problem tenant who passed the tenant screening process with flying colors but still managed to be habitually late with the monthly rental payment, or destroyed the rental property, or disrespected the neighbors. Does this mean tenant screening isn’t worth it? Is it a waste of time and money hire a tenant screening service, to conduct a background check and pull someone’s credit report? Is it a waste of time to check references?

Absolutely not. Let’s be honest: There are dishonest people out there. There are tenants who appear to be something they’re not. There are also decent tenants with a reliable history who become victims of circumstances beyond their control. The greatest way to shield yourself from this kind of bad luck is to employ the very best tenant screening service, to gather all the pertinent facts about a potential tenant before offering them the keys to your property.

It’s true, there is a little bit of luck involved with picking the right tenant. There’s a healthy dose of gut instinct, too. But that instinct should be backed by solid facts supporting your decision, whether it’s to say yes or no to a potential tenant. Selecting someone to sign a lease might seem like a giant leap of faith; while there is a bit of trust involved in the decision, that trust is made much stronger when you have all the knowledge necessary about someone’s criminal record, employment, credit and landlord history from which to draw. 

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Meth Lab Cleanup Is a Cost You Don’t Want to Incur

Methamphetamine is a problem that can destroy lives, bank accounts and families in a very short amount of time. But homemade meth labs are also highly damaging to residential properties. The ingredients used in the manufacturing of meth, when combined, create toxic contaminants that are absorbed into walls, flooring, and ventilation systems.

Once a meth lab is discovered and the residents are arrested, the problem of how to clean up the property falls to the property owner. Cleaning up the toxic contaminants left behind can be a lengthy and expensive process. After a typical meth lab bust, once the police have removed the chemicals and equipment, the local health department writes a condemnation order and orders the property owner to clean up the area. That can cost upwards of $30,000, an expense that is compounded by the owner’s inability to get rental payments out of the property for the month(s) it is uninhabitable due to the cleaning process.

Because the liability is so great when it comes to meth labs, every property owner should be diligent about conducting thorough background checks for all prospective tenants. Look for a history of issues related to substance abuse, check the tenant’s criminal record, and speak with former landlords about the tenant to get landlord references. Remember, screening residents is the first line of defense.

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Use Same Standards During Each Tenant Screening Process

Selecting a tenant isn’t rocket science, but it can be a complicated, confusing process if you don’t have a set plan in place. Every landlord should have a set list of standards that any prospective tenant must meet in order to be approved to sign the lease and move in. Those standards may differ from landlord to landlord, based on personal preferences, the type of rental unit, and past experiences with tenants. Here are some recommended standards for approving a tenant application:

• The application itself is properly completed.

• The prospective tenant is 18 or older.

• The prospective tenant must prove a monthly income that is three times the amount of the monthly rent.

• There can be no previous evictions on the tenant’s record.

• The tenant has a clean criminal record.

• The tenant’s credit score must be at least XXX.

• The tenant must be currently employed, and undergo a successful employment verification process.

• The tenant’s previous landlord must give a positive recommendation.

Whatever a landlord decides his standards for application approval are, those standards should be written down and checked (twice!) during each tenant screening process for every single applicant. That’s because in the rush to find a tenant — amid the sea of paperwork and reports and the business of collecting fees and applications — it’s easy to overlook a standard or two. It’s easy to forget that you were supposed to call their previous landlord or their current employer. So write down your list of standards and keep it on file to adhere to each and every time.

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Renting During a Recession Means Making Concessions

Every landlord hopes for a dream tenant to walk through the door, someone who’s friendly and clean with excellent credit, solid employment, good references and no criminal record. While these tenants do exist, it’s getting harder to find renters with spotless credit reports and an unblemished employment history. These last few years of layoffs and pay cuts have wreaked havoc on families across the country, and plenty of upstanding citizens, many who’ve owned their own home before, are facing hard times.

Landlords can’t become bleeding hearts, opening their doors to every victim of the recession. It’s still important to do a thorough tenant screening on applicants and think long and hard about the risks associated with allowing someone to sign a lease. But if the potential tenants you’ve been screening have lower credit scores than what you’re used to accepting, consider a few things:

1. Don’t make a foreclosure a deal breaker. The number of people who have a mortgage in foreclosure or mortgage payments significantly past due is rising. While those people couldn’t hang onto their homes, they more than likely are good prospects for renting because they’re used to caring for and maintaining a home, and they’re determined to improve their financial situation, which means they’ll pay their rent on time.
2. Reduce the security deposit but make it nonrefundable. Reducing the security deposit gives a break to those who will probably be good tenants but don’t have a lot of cash lying around to drop all at once. And making the security deposit non-refundable helps alleviate some of your risk in renting to someone with a lower credit rating.

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Know Fair Housing Laws

When landlords are new to the business, there are two things they need to learn right away. One is the value of using a professional tenant screening service to screen their applicants and give them crucial information on an applicant’s credit, employment, criminal record and rental history. The other is the importance of familiarizing themselves with the Fair Housing laws in their area and their state.

Fair Housing laws are in place to protect both tenant and landlord, but in order to be protected by the law, you have to know what that law is. Landlords can’t plead ignorance when it comes to Fair Housing issues, because it is their duty to learn and uphold the law when doing business.

In essence, fair housing laws are put in place to ensure there will be equal access to housing for all people. There can’t be any discrimination on the basis of race, color, religion, gender, national origin, ancestry, sexual orientation, age, familial status, children, marital status, veteran status or membership in the armed services, the receiving of public assistance, or physical or mental disability.

To learn more about the law, landlords should visit the U.S. Department of Housing and Urban Development (HUD) website. Also check your state’s Housing Department for state regulations and possible training classes on the law. You can also check with your county’s government seat for any local laws regarding Fair Housing issues. Remember that ignorance on this subject will not get you off the hook if you’re ever faced with a complaint or lawsuit accusing you of violating Fair Housing law.

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Rental Applications Can Have Pre-screening Warning Signs

Tenant screening is hands down the best way to tell whether a prospective tenant is qualified to rent your property or not. That way you will get detailed information on the person’s criminal record and employment history, obtain a credit report on the person, see if they have any previous evictions on their record, check their name against sex offender registries … the list goes on.

While the screening itself is invaluable and necessary in today’s world, there are some red flags on an actual rental application that could signal a problem tenant before the formal screening process begins.

First of all, check for incomplete information. If the tenant can’t think of three people they know who aren’t related to them and would give them a positive recommendation, chances are you might not find them to be recommendable either. Also look for mistakes on the application – phone numbers that don’t work when you try them, address numbers missing or inaccurate. Mistakes like that could be an intentional attempt to hide their past, could be a sign of identity theft or a troubled rental history.

Be wary of a tenant who doesn’t have a bank account. Nobody these days deals only with cash and money orders. Just about any responsible adult will have a checking account. Similarly, if they can’t verify a current address with a utility bill or phone bill, they might be hiding something. They might have a bad rental history and don’t want to disclose the name of their current landlord.

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