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Spokane Property Management Blog

The Process of a Tenant Background Check

Home River Group - Spokane - Tuesday, September 20, 2022
Property Management Blog

The statewide rental vacancy rate in Washington fell from 4.2% in Fall 2020 to 3.6% in Fall 2021. The state has one of the lowest vacancy rates in the country because of the hot rental market.

Landlords have a pool of great tenants to choose from when a unit in their property opens up. However, not every tenant that applies is going to be a good one.

To avoid bad tenants, run a tenant background check on each applicant. Keep reading to learn the process.

Tenant Application Review

The first step of a tenant background check is to go over the tenant application. Effective background checks begin with data collection, most of which you will find in their application.

For an effective screening process, request the following information from the tenant:

  • Full name
  • Date of birth
  • Employment information
  • References

It's also important that you get permission to run a tenant background check. This is a question you can include on the application.

Credit Check

If you run a credit check on your tenant, you might be able to charge them for it. Running a credit report is important to ensure the tenant is telling the truth about their income on their application.

You can use any credit reporting company to check the applicant's history. From there, you'll receive a detailed report of the financial health of the applicant.

A credit check allows you to identify whether or not you should be concerned about a tenant. If they have a history of bankruptcy, late payments, or substantial loans, you might want to deny their application.

Tenant Background Check

The next step in screening potential tenants is running a detailed background check. Tenant screening services can run a background check for you so that you receive as much past information as possible.

You can hire companies to find information pertaining to the prospective tenant's eviction history, criminal history, and credit history. This rental background check may also provide you with other public records.

Always hire an approved consumer reporting service. If you work with a rental property management company, they will likely complete tenant background checks for you.

Screening Tenants: Best Practices

To have the best chance of identifying bad tenants, go a step further in your background checking process by contacting the applicant's employer and previous landlords.

Employers will confirm the employment status of the tenant and their income amount.

When you contact previous landlords, consider asking these questions:

  • Did the tenant pay rent on time?
  • Does the tenant owe you money?
  • Did you receive complaints about the tenant?
  • Did the tenant intentionally damage the property?

The most important rule of thumb when screening tenants is to follow the same process and use the same requirements for every applicant. Doing this will help you stay compliant and avoid legal ramifications.

Can Property Management Help?

If you don't currently utilize tenant screening services, you are running the risk of renting to bad tenants and losing money. Rental property management companies can handle these tasks, and more, for you.

When you hire management services, they will review tenant applications, run credit reports, run background checks, and follow best practices.

Contact us today to learn more about our team.