Why you should always check a tenants rental history
Tenant screening is one of the keys to success with owning rental properties because the quality of your screening is what will make the difference between renting to a quality tenant, or someone who will potentially cause trouble for you.
Thankfully, you can ensure that you’re going to rent to a quality tenant, especially when you take the time to review their rental history.
Why You Should Pay Close Attention To Their Rental History
Rental history is important because it’s what’s going to show you how long they lived at each of their previous addresses and why they potentially moved from those addresses over the years.
When you review rental history that shows an applicant has moved every 6 months, it’s important to ask why because, they may have moved due to their job, or their could be underlying reasons why they moved so frequently over the years.
How to check a tenant’s rental history report
A tenant’s rental history report is just as important as verifying their income or credit score. A thorough screening process can help you identify a great tenant who pays rent on time and looks after the rental unit.
Conversely, skimping on the screening process can cost you in the long run. After all, it’s more difficult to get rid of a bad tenant than to let one rent your property.
To get you started on the right path for checking a tenant’s rental history, here are four steps to follow:
1. Start the rental history report using pre-screening questions.
The rental verification process starts when you first speak to the prospective tenant by phone or email. Before you start, it’s a good idea to check with your current state laws and the Fair Housing Laws to be clear about the questions you can and cannot ask a prospective tenant.
In general, though, you should be ready to find out the following information:
- How long they have been living at their current address
- Why they are moving
- Whether they are willing to submit a rental application and authorize a background check
- Whether they are willing to provide references from previous landlords and employers
- Whether they have been evicted from a previous apartment
It is helpful to ask some of the questions on the rental application during the call and then note the answers. This information is important because you can check the verbal answers against the information included on their rental application—as well as the information former landlords provide.
2. Use the rental application process to build a rental history report.
The rental application form should gather information about the prospective tenant’s current and previous addresses. This should include the dates in which the tenant lived at the addresses as well as the landlord’s contact information. It is also essential to ask for consent to contact previous landlords.
Most of the time, the tenants who have nothing to hide will be OK with you calling former landlords and rental property owners.
3. Check the rent references.
If the tenant consents to a check of their rental history, you then have to take on the laborious task of making lots and lots of phone calls to verify the information. You may have the urge to skip this part, but don’t give in to the temptation. Doing so could mean the difference between renting to a great tenant or renting to a bad one.
The goal of calling previous landlords is to verify that the tenant’s information is accurate. It’s also an excellent time to ask how the tenant treated the property and if there were any lease violations that occurred during the tenancy. If possible, it would be best to ask open-ended questions to better understand the tenant better.
For example, you can ask how the tenant maintained the property, what the communication was like, and why they would rent to the tenant again.
Before calling the landlord, it’s also a good idea to do an internet search to confirm the contact information you were given for the landlord. It’s not unheard of for a tenant to give a friend’s contact number as their landlord’s number. The friend will then pose as the prior landlord.
Thoroughly checking a tenant’s rent references takes time, of course. However, it’s worth spending the time on vetting possible tenants to find a suitable tenant for your rental unit.
4. Verify information with the tenant.
Let’s suppose the rent references you check out differ from what the tenant has stated during the screening call or on their application. In that case, it’s worth the time to check with the tenant on the discrepancies. These could just be simple mistakes or purposeful inaccuracies on the part of the other party. For example, a prospective tenant is able to provide misleading information just as easily as a landlord is able to lie about a tenant.
Of course, it’s not easy to know who to believe in these situations. You will have to rely on your own judgment, but asking a few questions usually clears up any misunderstandings. And, if you call at least three former landlords, you might be able to get a better idea of who is telling the truth.
Rental history online services
Savvy landlords also use property management apps to run complete background checks—including rental history—on tenants. Not only can the apps build a profile of a tenant’s rental payment history, but they can also be used to run credit checks, look into criminal history and eviction history, and see employment history.
Why rental history matters
Rental history allows you to get an idea of your prospective tenant—which is why it’s so important. For example, previous landlords can tell you if the individual paid rent on time, if the tenant looked after the unit, and whether was a good tenant. This information is a good indicator of how the tenant will treat your property and your rental agreement—so you should never skip a check of a prospective tenant’s rent references.
However, rental history is just one aspect of the screening process. For example, employment history and bank statements can help you determine whether a prospective tenant can afford the rent on the unit. A credit check can provide insight into their attitude toward paying bills on time or getting into debt.
What if a tenant has no rental history?
There is always the possibility that a prospective tenant has no rental history to rely on. In that case, the typical rental background checks can help determine a first-time renter’s suitability as a renter instead.
You can check their pay stubs, employment history, and ask for additional references. Also, first impressions are important, so their behavior during the interview could help you determine if they are a good fit.
And, just because the prospective renter is a first-time tenant with no rent references doesn’t mean they will be a bad tenant. If you verify their proof of income and their credit reports check out, they are probably OK to rent to. If you are in doubt, you can always ask for a co-signer on the rental agreement.
Contact RPM Central Valley
At RPM Central Valley, we specialize in property management for the Central Valley area.
Our team can assist you with tenant screening, placement, rent collection, maintenance and more!
Learn more about our services today by calling (209) 572-2222, or click here to start a quote online.