10th July 2007

How I Do Tenant Background Checks

posted in Property Management |

As any seasoned landlord knows, Fingerprintit is important to perform tenant background checks before signing a lease. This will inevitably prevent you from having to deal with a hardened criminal, sex offender or, for lack of a better term, a problem child who is now an adult.

Typically I like to “size-up” potential tenants visually first. Now I know appearance isn’t everything but on the other hand, if it walks like a duck……
Usually I insist that before the lease is executed, I meet with everyone who will be living in the house, including pets to make sure that none of them are one of these.

In one instance, a couple was trying to rent one of our houses and a parent was the primary contact. This guy, the father of one of them, wasted two hours of my time yakking about this and that in an effort to establish a rapport with me.

Upon further investigation, one of the potential tenants had an impressively long prison record for his age and a wonderful array of white supremacist tattoos as described on the state department of corrections web site. Now, I have nothing against tattoos, I have some myself, but I’m not trying to scare the neighbors either.

So here’s my general research path:

  • Using information from the rental application, I check the driver’s license number against the local clerk of courts criminal and civil database on the web. If they’ve exclusively lived locally, you get to see everything from previous evictions to traffic violations to attempted murder charges.
  • I check the name and date of birth against the state’s department of corrections database on the web. This will tell me if the attempted murder charges stuck.
  • I check with The Almighty Google to see if they’ve pissed anyone else off.
  • I check with their previous landlord mostly to make sure that they pay on-time.
  • I check with their employers to verify income. If they list their employment as “cocktail waitress” at a known strip club, they’re more often than not “strippers” in which case, I tell them, “Thanks for playing, buh-bye.”
  • If I can’t verify their income, I ask to see check stubs or bank statements.
  • Then and only then do I run an electronic credit and background check (usually using E-Renter.com but I’m looking for a better service.)

Usually if they check-out on all of the above, the landlord-tenant relationship may work out well.

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There are currently 18 responses to “How I Do Tenant Background Checks”

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  1. 1 On July 12th, 2007, savvy said:

    I would be very careful about “sizing them up visually”… that can lead to discrimination and fair-housing complaints very quickly.

    I was told to never photocopy driver’s licenses for this very reason. Just to compare that the picture matches the person handing it to you, and then take down the info. You never want a picture attached to an application.

  2. 2 On July 12th, 2007, Bruce said:

    Savvy,
    I completely agree with the not photocopying the driver license thing. Documenting a tenant’s appearance is definitely a no-no.

    However, if someone pulls up in a total junker with half their possessions in the back seat not because they are moving that day but because that stuff “lives there.”

    Ya, thanks but no thanks.

  3. 3 On July 13th, 2007, Clifford said:

    I always look at the car as well. My theory is how tenants take care of their car is how they take care of their living space. Someone could have a new cadillac but if it’s full of McDonald’s and completely filthy, probably not. But someone in a 10-year old Honda, meticulous clean, would be my choice of renter.

    I’m thoroughly intrigued with mybackgroundcheck.com . . .

  4. 4 On July 13th, 2007, Louisville Real Estate said:

    Great information here – I found it incredibly helpful.

  5. 5 On July 19th, 2007, Dusty said:

    What does one do with abandoned cars in your driveway after the tennant runs away?

  6. 6 On July 19th, 2007, Bruce said:

    If they’re running because I have high standards and a low tolerance for dirtbags?? Wave at them as they run…..

    ….and about the car? It’s on private property so I have it towed.

  7. 7 On July 23rd, 2007, Kent Bailey said:

    Thanks for writing this post. I’m about to purchase my first apartment building and I’m trying to decide whether to pay a management company or do the management myself. The tenant screening always sounded too scary to do myself. But after reading this post it doesn’t seem too bad. I think I’m going to try to manage the property myself. I’ll keep checking back with you for more tips.

  8. 8 On July 23rd, 2007, Bruce said:

    Kent,

    I’m glad you find the information here useful. In my opinion, depending on the size of the building, you may NEED to hire a management company unless you want to be in the property management business.

    Thanks for your comment and welcome!

  9. 9 On July 27th, 2007, Kent said:

    Good point. This is a 12 unit building in a very desireable area and appears to have a fairly low turnover. Maybe I can handle it myself. I’m not sure yet. I figure I can always try it, and if it becomes too time consuming I can turn it over to a management company.

    Do you use management companies for any of your properties? Also, which part of managing your own properties do you find most time consuming? Tenant screening? Marketing? Repair? etc.

  10. 10 On July 27th, 2007, Bruce said:

    Kent,
    To answer your question: At this time we do not use a management company. In the past, we’ve found that management companies themselves need to be managed. They’re not a “deploy and forget” solution.

    Our experience is that they tend to spend money like it’s water because it’s not theirs. They also tend to make brain-dead maintenance decisions sometimes thereby spending too much money.

    The most time-consuming activity, I find, is maintenance because pretty much everything else can be done from my office desk with the exception of showing the properties.

    Also, all of our properties are single-family homes so there’s a lot of driving involved.

  11. 11 On December 14th, 2007, Milagro said:

    “In the past, we’ve found that management companies themselves need to be managed. They’re not a “deploy and forget” solution.” This rings very true. There are dozens of ways that a management company can suck money out of a large rental property by letting it deteriorate, while keeping it hidden from the owner. Maintenance is a big one, and renting to at risk tenants it also big.

    Background check is a must do. However there are laws, like the Fair Credit Reporting Act that limit how and what you can do for your background search on a prospective tenant. This is particularly true if you purchase your background check from a 3rd party like http://www.BackgroundSearch.com, or any of the online background check companies.

  12. 12 On December 31st, 2007, Bruce Berry said:

    Marie Simpson
    Beautiful, absolutely perfect solution. Thank-you
    I have been a landlord for 25 years.
    It puts the responsibility on the prospective tenant where it belongs.
    The renter can take it to the next apartment, he has not commited his money soley to your credit check.

  13. 13 On January 2nd, 2009, Wesley Fisher said:

    I would caution you to NOT make decisions based on appearances. That can get you in quite a bit of trouble. You need to get information from INDEPENDENT resources such as the Consumer Reporting Agency you’re using. I’ve used several different agencies in the past, but found E-Renter (www.e-renter.com) to be the best of the bunch so I’m surprised you want to switch. Good luck,

    W Fisher

  14. 14 On February 16th, 2010, Tami Bettendorf said:

    While it is important NOT to make decision based on appearances, it is even MORE important to be absolutely sure you have documentation of Date of Birth. Once of the best resources for this information is Drivers License. So long as you are taking and making a copy of every drivers license of every applicant who walks through your door, you should be fine from a fair housing standpoint.

    Why is Date of Birth so important?
    Public records (to include Criminal and Civil information) are stored on Name and Date of Birth match ONLY. At no point do the tools used for finding this information take Social Security Number into consideration.

    If the date of birth being used to find information or provided to your screening company is off, by even a day, or a number is reversed (12 vs. 21), the records may be missed. Could be the difference of a good tenant vs. a very bad one.

  15. 15 On February 19th, 2010, Marvia Thompson said:

    I do agree with most of what was said. I use to work for property mangement companies and I could no longer tolerate the way they treat the tenants and owners. Lies and deceiving… letting things get worse and worse. I love helping people find their home so I became a real estate agent. I am doing tenant placement for one of my listings, and was looking for recomendations of which screening company to use. I had narrowed it down to e-renter or citiCredit. Glad to see recommendations for e-renter, has anyone used citicredit? I do like the mybackgroundcheck recommended, but it looks to be expensive for what you get. I want to find a good tenant for my owner, but I also don’t want to charge them a ton of money… especially now a days just because people can’t afford 60 something dollars for a credit check does not mean they will be bad tenants. I do like the idea that I don’t have to collect money and deal with accounting for it. That part would make things a lot easier…

  16. 16 On March 21st, 2010, Rich said:

    Yes sir…due diligence. A good application and credit/background check will pretty much (not always) tell the story.

    I used a credit check company that has since been bought out by Equifax. So, not sure if it is easy to get hooked up with them. I pay $8 for credit and $5 for criminal background. Also, check prices at your local Apartment association.

  17. 17 On March 31st, 2010, Leslie Connor said:

    We use e-renter.com and have never had any issues. The service is really good and the customer support is wonderful. Definitely use a 3rd party like E-renter for the tenant screening. You’ll regret it otherwise.

    Thanks,
    LC

  18. 18 On April 1st, 2010, TheLandlord said:

    Leslie,
    We stopped using e-renter.com when they stopped offering a full credit history. The “scoring” system they use is too nebulous. Now I require that my tenants pull their own credit and submit that with the rental application.

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