Background checks are one of the last steps before you decide to make it official with a tenant. Because of this, they’re also one of the biggest chances for a landlord to make a critical misstep. When you’re near the end of the process, you can get restless. When you get restless, you make mistakes that can cost you a lot of time and money later.
Bad tenants are like bad romantic relationships: it’s always easier to recognize the red flags and avoid getting involved with one in the first place. Here are some background check mistakes you should avoid when managing rental property.
Asking the wrong questions
A background check should be as fair and even-handed as possible. To accomplish that, you should let another company perform a balanced tenant background check. Professional background check companies will look at things like credit reports, eviction histories, and any applicable criminal records. They’ll then take that information back to you, the landlord, and let you decide what you want to do with it.
This is a better system than running the check on your own. If you do that, you’re more likely to get too close to the check. Getting too invested in a background check may not sound like an obvious problem on the surface. But if you start to care too much, you can cross some lines. And once you cross those lines, it’s hard to walk that boundary back and go on like everything is normal.
For example, let’s say you call a tenant and ask them questions about their background. If they don’t answer the questions to your exact liking, it’s easy to take that personally. And once you take it personally, you’re already messing up at least a little bit. You might start digging into parts of their life that you have no business digging in.
Asking “Where do you go to church?” can seem like a harmless question, especially if you live in a highly religious area like the American South. But by asking that, you’re opening yourself up to committing a Fair Housing Act violation. Religion should not be a factor in deciding who you’re going to rent to.
Even if you decide the person is a bad fit for other reasons, they might still be able to file a religious discrimination claim against you because you asked that question during the official check. Fighting those takes time that you should be spending on other aspects of the landlording business.
Assuming someone is safe
Word-of-mouth can be a powerful tool for finding good tenants. If your coworker tells you her brother needs a place to live, you should feel free to encourage the brother to apply. But you cannot take your coworker at her word if she says, “His other landlords have never had any issues,” or “He’s a great tenant.”
Of course she’s going to say that, because he’s her brother. It’s nice that she believes in a family member, but she’s too close to the situation to be truly objective. Her brother might be a quiet tenant who never pays his rent late. Or he might be the kind of tenant who invites the members of his punk band over to practice at midnight on a Tuesday.
There’s no way to know unless you do some checking first. You should perform a tenant background check to make sure he doesn’t need a home because he just got evicted from his fourth apartment in five years.
You should also ask for personal references that aren’t your coworker. If two or three other people say similar things to your coworker, then that’s a good sign that he really is someone whom you can trust. The tenant-landlord relationship is nothing without an earned sense of trust on both sides.