Checking a tenant’s background is very important for the landlord. Doing so will help identify potential trouble before a lease is signed. Protect your investment by conducting a background check of prospective tenants. Tenants with a history background of not paying their rent, that have been ejected in the past, or have a criminal record are more likely to cause a problems. The “Property Observer” shows us the five things to know about the tenant background checks.

By and large, tenants are going to be honest, straightforward and trustworthy individuals – however, it pays to be aware of the warning signs of a bad tenant and the areas that are not always as straightforward as you’d imagine.

Property Observer regularly discusses the significant importance of selecting a good tenant (afterall, they’re an important part of the investing process and a neat, tidy and careful tenant will add years onto the life of your home), as well as how bad it can get when damage and worse occurs (warning: wince worthy material within).

Here are five things that every self-managing investor, and property manager, should know about tenant background checks:


1) The previous, or current, landlord for the tenant might not always be honest

If a tenant is particularly bad, or a landlord is in a hurry, it’s likely they might not tell you the complete truth on the phone. This is particularly true for if the tenant is currently in situ and hasn’t been fantastic – they might want to move them on as quickly as possible.

You’ll also want to be aware that, just as with employment references, there is an increasing fear of being liable should the wrong thing be said. For this reason, landlords, investors and property managers have been known to sugar coat a previous tenants’ behaviour.

Avoid this by asking pointed questions and looking for areas of hesitation. Ask about whether the full bond is, or will be, returned, as well as the longest period of rental arrears from that specific tenant. These are factual details that would be outright lies to get wrong, rather than a case of personal judgement.

2) You need signed permission to undertake a credit check

Credit checks can be particularly useful in getting an understanding of a tenants likelihood to pay on time and to be good with their finances. While not all black marks of credit history results in the making of a nightmare tenant, it can be powerful information in conjunction with the rest of their application.

Remember, though, you need signed permission from.. Read More

Article Source: Property Observer                               


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