Identifying, approving, and placing tenants may start with a solid rental application, but it certainly doesn’t end there. While a tenant application provides basic information, a thorough background check uncovers the details that matter most for a successful landlord-tenant relationship.
At TCS Management, we use the background check to confirm all of the information that the tenant provided on that application. We also use this screening process to ensure that the prospective tenant can pay rent on time, be trusted not to damage your property, and demonstrate that they’re financially responsible and easy to work with.
Let’s talk about the screening process and how you should approach background checks if you’re looking for a good tenant. Remember, The Renters’ Access Act created uniform screening criteria for applicants’ rental and credit history. It’s another good reason to screen your tenants professionally.
Before Background Checking: Establish What Your Qualifying Criteria Will Be
Before you start digging into the backgrounds of any potential tenants, you have to establish what you’re looking for. This is fair to them and it’s a good way for you to remain consistent and objective while you’re screening.
Set standards ahead of time and communicate those to any potential applicants. If your income requirements are at least three times the monthly rent, let them know. Tell them that good credit is also important. A tenant’s FICO score is a great predictor of ability to pay on time. Establish the standards that will have to be met before an application is approved.
Verify Employment and Income
Income is perhaps the most important part of the background check because this is what tells you whether the tenant will actually have enough money to pay rent every month.
Check employment and verify income when you’re screening Philadelphia tenants. You can call the applicant’s employer and ask about the position that’s held, the length of employment, and salary. You can also ask for documentation from the applicant like pay stubs and tax returns. Typically, you’ll want to see an income that’s at least three times the monthly rent.
Checking Credit: Tenant Background Screening
A credit check helps you understand a tenant’s history of borrowing, spending, and bill paying. You’ll get an idea of whether they pay their bills on time and if they’re responsible with debt. You can also see whether they have the money available to live in your Philadelphia rental property. Someone who is in serious debt may have trouble paying the debt and the rent.
Before you can run a credit check on any of your applicants, you need to get permission. Include something on the application that allows you to check credit, and make sure each resident over the age of 18 submits a completed and signed rental application.
Follow all Fair Credit Reporting Act guidelines and fair housing laws. In order to effectively check credit, you’ll need to gather the following information on the application:
- Full legal name
- Social security number
- Date of birth
- Legal addresses for at least the past two years
Depending on the service you use, there may be a requirement that you prove you’re a landlord running a credit check for the purposes of renting a property. It’s often easier to have a Philadelphia property manager check credit and evaluate backgrounds for you.
Criminal Background Checks
A national criminal background check is an important part of your screening process. Make this as broad as you can. Simply checking in with the local police isn’t enough.
Look for a history of any felony convictions. A non-violent offense 20 years ago may not be a cause to disqualify a tenant, especially if that tenant has an exemplary record since then. But, recent crimes of a violent nature are cause for concern.
Eviction History and Rental References
Look for prior evictions, and always check the national eviction databases. Today’s tenants are less likely to live in a single city their whole lives, so a local check of evictions won’t be enough. You also want to check rental references. This can be an easy corner to cut, because you’re going to assume that the references won’t tell you anything. But, you might find out you have bad phone numbers, or the people you’re calling don’t know who you’re talking about. This will help you complete the full picture and maybe raise some red flags.
When you do get in touch with a former landlord or property manager, do some light digging to ensure you’re talking to the right person. Tenants with bad relationships might give you the phone number of a family member or friend. Some of the things you should ask a current or former landlord include:
- Was rent paid on time every month? How quickly was the rent paid in the event that it was late? Did you ever have to serve an eviction?
- Was there any property damage during the lease term? Did the security deposit cover that damage, or did the damage exceed the deposit?
- Was proper notice given before they moved?
- Did the tenant have pets?
- Did the tenant receive a full security deposit refund?
- Would you rent to this tenant again?
Don’t skip this part of your background check. A former landlord or property manager is uniquely positioned to tell you about what it’s like to rent to a particular person.
Background Checks for Landlords Must Comply with Fair Housing
When you screen a tenant, you check into their backgrounds and you also do some investigating to ensure that all of the information they provided on the application is true and accurate. This is how you decide whether you’ll approve them for tenancy or deny their application. You have to be consistent and treat every application the same, otherwise you can be accused of fair housing violations or of violating the uniform screening standards Philadelphia has in place, which can be expensive.
Need some help with background checks? We’re the team for you. Contact us at TCS Management, and we’ll find you a great tenant.
TCS Management is a full service property management company headquartered in Philadelphia, Pennsylvania, also serving Cherry Hill, NJ, Wilmington, Delaware, Nashville, Tennessee and the Atlanta, GA and Charleston, SC metro areas. We focus on single-family and multifamily residential property management of homes, condos, townhomes, and apartment buildings.
