As many experienced landlords can tell you, an incredibly thorough background and reference check on any prospective tenant is the only way to determine whether or not they will treat you, your due dates, and your property with respect. Oftentimes it’s tempting to meet a charming tenant and take them at their word about their rental history and employment status. As much as there are people out there who you can trust off the bat, there are also many who you can’t.
In some instances, you may receive bits of a client’s rental and credit history that make them seem unsavoury. However, there can be circumstances that are beyond a tenant’s control. Perhaps you’ve spotted a blip in someone’s credit history from years prior during a difficult time that is no longer a problem, or one landlord didn’t get along well with the tenant and left an unfavourable reference. Sometimes you need to overlook certain things and let the past be the past, but the following are the parts of a tenant’s history you should really pay attention to.
Unsavoury Credit History or History of Debt
Minor errors in someone’s distant credit past, like one or two missed credit card payments, shouldn’t affect your opinion of them too much. It becomes problematic only if you’ve noticed that recently they’ve missed multiple payments or have incurred debt that seems to be increasing instead of decreasing. It could mean payments are becoming too much to handle and that they may not come up with rent on time.
Landlords will sometimes follow the “three-times rule” — ensuring your applicant earns three times the rent per month — just remember to include any debt payments that may be owed from month to month. If you’ve collected a credit report, subtract minimum debt payments from their monthly wage. Are they still able to comfortably pay rent? If the answer is no it may be time to review your other applicants.
This one may go without saying but someone with criminal history can be a risky bet to rent to. Though of course it’s up to a landlord’s discretion whether or not someone is trustworthy regardless of a criminal charge in their past, ensure if you’ve decided to move forward with the tenant the type of crime committed does not disqualify them from legally being able to rent your property.
Rental History That Doesn’t Match Up
One of the most vital units of prospective tenant applications is their rental history. If you’ve asked an applicant to list their own tenancy dates and past landlords, be sure to check the rental dates closely and make sure they match up from place to place. If there is any sign of overlap it may mean the tenant is not being honest with you. It’s always best to inquire and see if they are able to quickly and directly answer your questions. Also, it’s to your benefit to actually call the references given to you. If contact information is absent or you’ve been asked not to speak with past landlords that’s a huge red flag and should be a deal breaker, especially if the tenant has asked you not to contact more than one previous landlord.
Gaps in Rental History
Similarly, if you notice any large gaps in the tenant’s rental history, this could prove an issue with past landlords or even bankruptcy. If a tenant is being honest about issues they’ve encountered it’s a good sign they’re trustworthy. However, if you ask about the gaps and they can’t answer or choose to come up with excuses, it probably means they’re hiding something.
Tenant screening is tough to say the least. What if you’ve spent loads of time collecting all the information you require only to have to reject the applicant and start from square one? Certn offers an advanced and thorough screening solution to take the work off your shoulders. Our technology researches credit history, tenant history, debt repayment, behavioural patterns and even applicant online presence to ensure they are the perfect fit for the needs of you and your property. Contact us today for a consultation and demo of our screening technology!