You Can’t Afford to Skip Tenant Background Checks. Here’s Why

Owning real estate is well known for being one of the most efficient ways to significantly increase your net worth. This is particularly true if you choose to …

Apartment for rent sign

Owning real estate is well known for being one of the most efficient ways to significantly increase your net worth. This is particularly true if you choose to rent your properties out to tenants, as this can be a reliable source of passive income.

However, you can’t rent to just anyone — you’ll need to research each candidate to determine whether or not they are suitable. Let’s explore why you need to run a background check on tenants.

Establish Safety

One of the primary ways that running a background check on a tenant can benefit you is by establishing a safer environment within the neighborhood.

Unfortunately, renting to someone who has an extensive criminal history comes with a handful of risks. While there is no guarantee that these individuals will re-offend in the future, they will often be more likely to cause issues later on.

As you might expect, the same can be said about someone who appears on the national sex offender registry. As a landlord, it’s essential that you do all that you can to ensure that you only rent to people who will become a valuable part of the community.

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Protect Yourself From Liability

If you do not screen a tenant and then choose to deny them, you may encounter legal issues. The United States Fair Housing laws dictate that you cannot reject a potential applicant based on a number of different criteria. These include sex, religion, race, or disability.

If a background check conveys that they have a poor rental history, however, you have a concrete reason to deny the application. This will absolve you from any liability, as the tenant would never be able to say that they were rejected based on one of the above criteria.

Minimize Turnover

Vacancies are often highly costly for landlords. This is simply due to the fact that they will be responsible for paying all of the ongoing costs themselves, such as their mortgage payment and utilities. Finding a suitable renter requires comprehensive tenant screening, and you sometimes have to pay for a background check on tenant applicants.

However, you should consider this an investment into your long-term career as a property owner.

Minimize the Chances of Eviction

Eviction is a lengthy and costly process.

It shouldn’t come as a surprise that you will want to do all that you can to avoid this. Finding a suitable tenant who has a stellar renter’s history, high level of income, etc. will ensure that you do not encounter problems in the future. It’s also in your best interest to create a tenant screening checklist so that you can stay on track.

You Should Always Run Background Check on Tenants

Otherwise, you could encounter a significant number of complications in the future.

So, ensure that you run background check on tenants who apply to rent your home. This can easily save you tens of thousands of dollars and plenty of headaches.

Looking for more tips that can help you out later on? Check out the rest of our blog for plenty of more useful information.

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