Why You Should Do Tenant Screening

Why You Should Do Tenant Screening

Why You Should Do Tenant Screening

Whether you are a landlord or a lease agent, there should be no rush in entering into a lease contract when you are just starting to talk with a prospective tenant. Due diligence should be observed when trying to deal with a prospective tenant; otherwise, you may risk ending up with a lease agreement which is pre-terminated, and worse, having unsettled rental payments.

It would be wise and beneficial if you would be able to invest in tenant screening services to protect or secure your rented properties so that you will be able to gauge whether or not it will be favourable for you to enter such tenancy agreement with that certain prospective tenant or lessee. It is also critically important that you have tenants that you know will be able to pay monthly rent on time, preserve the property that you have rented him or her, as well as be admirable residents, too.

Though it might not appear necessary to take the time to screen those tenant applicants comprehensively, failure to do so would later on cost you significant time and expense. If you hastily decide to accept money from a prospective tenant that has cash on hand and ready to pay you right then and there, it might end up backfiring on you. It might also be a huge mistake if you just approve a tenant basing on his or her job just because you are very keen to lease out the property. It does not always mean that if the tenant applicant has a job then he or she has a good rental history. It does not also indicate that because the applicant has the deposit readily available, that he or she is a good payer and that he or she does not have any criminal record. As a landlord, a set of tenant screening considerations will help make sure that your tenant would not contribute to your neighbourhood’s crime rate. Having a tenant screened or doing a background check on the applicant will enable to fully verify and confirm that the person is representing himself or herself truthfully. This way, you would be assured that you are not turning a blind eye on potential dangers that might harm you, the neighbours and your property.

It is also really vital to carry out credit checks because most, if not all, landlords would never want to negotiate with someone who does not have good credit scores. Although nobody can stop you from contracting with those with bad credit, this could actually expose you from the chances of having late rental payments, or even worse, wasting time and effort in going after the lessee because he or she just suddenly disappears. In the long run, it might also mess up your credit score because you might not be able to fulfil your own credit obligations because your tenant or lessee did not pay on time. It would be best to know the financial capability of your tenant because it will provide you the certainty that said tenant is capable of paying his or her rent. With having this tenant screening, you are now discouraging those with bad credit scores from renting out your property which is actually beneficial for the business.

In addition, if you are the owner of the properties being rented out, naturally you would only want to enter in a contract with tenants that you are confident with that can take care of your rented property – as if it was their own. By screening out tenants, you will then have an insight on the way that certain lessee’s capability to carry out adequate care of your property. Doing background check will let you be aware of future problems such as history of substance abuse or the tenant being a part of a terrorist group. It is quite obvious that dealing with and being connected with these types of people will do no good, not only to your rented property, but also to you, as the landlord, and to your business. Doing tenant screening will aid you in revealing red flags about the tenant applicant before even entering to an agreement to lease your property.

In planning to avail tenant screening services, you should evaluate first which provider would be best to suit your needs. Since you are the primary owner and you know your business quite well, it would not be hard for you to come up with factors and standards which you think are acceptable or unacceptable when looking for tenants.

Although there are already several online tenant screening services providers, these providers just typically use only computerized databases to run background checks, making it more likely that only those readily available information such as credit histories and criminal records will be checked. This would then tend to leave out other investigative options that would necessitate talking with old landlords and other references. Moreover, online tenant screening services only check a number of databases for each person; therefore, they will simply tell you that the tenant is cleared for the background check if nothing turns up. On the other hand, a competent investigator will give you more detailed information about the tenant applicant if the standard background check does not turn up anything.

Although hiring an investigator is recommended to do a thorough background check, it is still not for everyone. It is an alternative choice which is more detailed and complete but, also, far more costly than doing online background checks. So it would be best to consider closely regarding all the possible risks you would take and your investment’s perceived value. Hiring an investigator is perhaps the preferred option for those long-term lease agreement, business and top-notch rental properties who would want a thorough and complete background check for potential tenants.

It is certainly not an easy feat to find the perfect tenant for your rental property, which is also one of the reasons why a lot of landlords would choose to hire property managers to manage their properties they want to rent out. It is of utmost importance to perform tenant screening to make sure you have the right tenants for you property, as this will not only ensure that you will find trustworthy and responsible tenants, but it will also give you peace of mind that your property is in good hands.

 

Why You Should Do Tenant Screening
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Why You Should Do Tenant Screening

Latest Issue

Why You Should Do Tenant Screening
BDC 282. July 2021

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Why You Should Do Tenant Screening